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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1840 Introduced in Senate (IS)]

114th CONGRESS
  1st Session
                                S. 1840

To amend title 11, United States Code, to provide for the liquidation, 
reorganization, or recapitalization of a covered financial corporation, 
                        and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 22, 2015

Mr. Cornyn (for himself, Mr. Toomey, Mr. Crapo, and Mr. Lee) introduced 
the following bill; which was read twice and referred to the Committee 
                 on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
To amend title 11, United States Code, to provide for the liquidation, 
reorganization, or recapitalization of a covered financial corporation, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Taxpayer Protection and Responsible 
Resolution Act''.

SEC. 2. GENERAL PROVISIONS RELATING TO COVERED FINANCIAL CORPORATIONS.

    (a) Definition.--Section 101 of title 11, United States Code, is 
amended by inserting the following after paragraph (9):
            ``(9A) The term `covered financial corporation' means any 
        corporation incorporated or organized under any Federal or 
        State law, other than a stockbroker, a commodity broker, or an 
        entity of the kind specified in paragraph (2) or (3) of section 
        109(b), that is--
                    ``(A) a bank holding company, as defined in section 
                2(a) of the Bank Holding Company Act of 1956 (12 U.S.C. 
                1841(a)); or
                    ``(B) a corporation that exists for the primary 
                purpose of owning, controlling, and financing 
                subsidiaries that are predominantly engaged in 
                activities that the Board of Governors of the Federal 
                Reserve System has determined are financial in nature 
                or incidental to such financial activity for purposes 
                of section 4(k) of the Bank Holding Company Act of 1956 
                (12 U.S.C. 1843(k)).''.
    (b) Applicability of Chapters.--Section 103 of title 11, United 
States Code, is amended--
            (1) in subsection (a)--
                    (A) by striking ``section 1161'' and inserting 
                ``sections 1161 and 1401''; and
                    (B) by striking ``or 13'' and inserting ``13, or 
                14'';
            (2) in subsection (g), by inserting ``subsection (m) and'' 
        before ``section''; and
            (3) by adding at the end the following:
    ``(l) Chapter 14 of this title applies only in a case under such 
chapter.
    ``(m) Except as otherwise provided in chapter 14 of this title, 
chapter 11 of this title applies in a case under chapter 14 of this 
title.''.
    (c) Who May Be a Debtor.--Section 109 of title 11, United States 
Code, is amended--
            (1) in subsection (d)--
                    (A) by striking ``and'';
                    (B) by striking ``or a'' and inserting ``or''; and
                    (C) by inserting ``, or a covered financial 
                corporation'' after ``Federal Deposit Insurance 
                Corporation Improvement Act of 1991''; and
            (2) by adding at the end the following:
    ``(i) Only a covered financial corporation may be a debtor in a 
case under chapter 14.''.
    (d) Distribution of Property of the Estate.--Section 726(a)(1) of 
title 11, United States Code, is amended by inserting ``in payment of 
any unpaid fees, costs, and expenses of a special trustee appointed 
under section 1406, and then'' after ``first,''.
    (e) Confirmation of Plan.--Section 1129(a) of title 11, United 
States Code, is amended by adding at the end the following:
            ``(17) In a case under chapter 14, all payable fees, costs, 
        and expenses of the special trustee have been paid or the plan 
        provides for the payment of all such fees, costs, and expenses, 
        as of the effective date of the plan.
            ``(18) In a case under chapter 14, confirmation of the plan 
        is not likely to cause serious adverse effects on financial 
        stability in the United States.''.
    (f) Qualification of Trustee.--Section 322(b)(2) of title 11, 
United States Code, is amended by striking ``The'' and inserting ``In 
cases under chapter 14, the United States trustee shall recommend to 
the court, and in all other cases, the''.

SEC. 3. LIQUIDATION, REORGANIZATION, OR RECAPITALIZATION OF A COVERED 
              FINANCIAL CORPORATION.

    (a) In General.--Title 11, United States Code, is amended by 
inserting before chapter 15 the following:

  ``CHAPTER 14--LIQUIDATION, REORGANIZATION, OR RECAPITALIZATION OF A 
                     COVERED FINANCIAL CORPORATION

``Sec.
``1401. Inapplicability of other sections.
``1402. Definitions for this chapter.
``1403. Commencement of a case concerning a covered financial 
                            corporation.
``1404. Regulators.
``1405. Special transfer of property of the estate.
``1406. Special trustee.
``1407. Automatic stay; assumed debt.
``1408. Treatment of qualified financial contracts and affiliate 
                            contracts.
``1409. Licenses, permits, and registrations.
``1410. Conversion to chapter 7.
``1411. Exemption from securities laws.
``1412. Inapplicability of certain avoiding powers.
``1413. Consideration of financial stability.
``Sec. 1401. Inapplicability of other sections
    ``Sections 303 and 321(c) do not apply in a case under this 
chapter.
``Sec. 1402. Definitions for this chapter
    ``In this chapter, the following definitions shall apply:
            ``(1) The term `Board' means the Board of Governors of the 
        Federal Reserve System.
            ``(2) The term `bridge company' means a newly formed 
        corporation to which property of the estate may be transferred 
        under section 1405(a) and the equity securities of which may be 
        transferred to a special trustee under section 1406(a).
            ``(3) The term `capital structure debt' means all unsecured 
        debt of the debtor for borrowed money for which the debtor is 
        the primary obligor, other than a qualified financial contract 
        and other than debt secured by a lien on property of the estate 
        that is to be transferred to a bridge company pursuant to an 
        order of the court under section 1405(a).
            ``(4) The term `contractual right' means a contractual 
        right of a kind described in section 555, 556, 559, 560, or 
        561.
            ``(5) The term `qualified financial contract' means any 
        contract of a kind defined in paragraph (25), (38A), (47), or 
        (53B) of section 101, section 741(7), or paragraph (4), (5), 
        (11), or (13) of section 761.
            ``(6) The term `special trustee' means a trustee appointed 
        under section 1406(a)(2)(A).
            ``(7) The term `trustee' means a person who is--
                    ``(A) appointed or elected under section 1104; and
                    ``(B) qualified under section 322 to serve as 
                trustee in the case or, in the absence of such person, 
                the debtor in possession.
``Sec. 1403. Commencement of a case concerning a covered financial 
              corporation
    ``(a) In General.--A case under this chapter may be commenced by 
the filing of a petition with the court by an entity that may be a 
debtor under section 301 if the entity states to the best of its 
knowledge, under penalty of perjury, in the petition that the entity is 
a covered financial corporation.
    ``(b) Order for Relief.--The commencement of a case under 
subsection (a) constitutes an order for relief under this chapter.
    ``(c) Liability.--The members of the board of directors (or body 
performing similar functions) of a covered financial corporation shall 
not be liable to shareholders, creditors or other parties in interest 
for--
            ``(1) a good faith filing of a case under this chapter; or
            ``(2) for any reasonable action taken, before or after the 
        date on which a case is commenced under this chapter, in good 
        faith in contemplation of or in connection with such a filing 
        or a transfer under section 1405 or section 1406.
    ``(d) Notice to Court.--Counsel to the entity that may be a debtor 
shall provide, to the greatest extent practicable, sufficient 
confidential notice to the Director of the Administrative Office of the 
United States Courts and the chief judge of the court of appeals 
embracing the district in which the case is pending regarding the 
potential commencement of a case under this chapter without disclosing 
the identity of the potential debtor to allow the Director and chief 
judge to designate and ensure the ready availability of 1 of the 
bankruptcy judges designated under section 298(b)(1) of title 28 to be 
available to preside over the case.
``Sec. 1404. Regulators
    ``The Board, the Securities and Exchange Commission, the 
Comptroller of the Currency, and the Federal Deposit Insurance 
Corporation may raise and may appear and be heard on any issue in any 
case or proceeding under this chapter.
``Sec. 1405. Special transfer of property of the estate
    ``(a) In General.--
            ``(1) Transfer.--On request of the trustee, and after 
        notice and hearing not less than 24 hours after the order for 
        relief, the court may order a transfer under this section of 
        property of the estate, and the assignment of debt, executory 
        contracts, unexpired leases, qualified financial contracts, and 
        agreements of the debtor, to a bridge company. Except as 
        provided under this section, the provisions of sections 363 and 
        365 shall apply to a transfer and assignment under this 
        section.
            ``(2) Property of estate.--Upon the entry of an order 
        approving a transfer under this section, any property 
        transferred, and any debt, executory contract, unexpired 
        leases, qualified financial contract, or agreement assigned 
        under such order shall no longer be property of the estate.
    ``(b) Notice.--Unless the court orders otherwise, notice of a 
request for an order under subsection (a) shall consist of electronic 
or telephonic notice of not less than 24 hours to--
            ``(1) the holders of the 20 largest secured claims against 
        the debtor;
            ``(2) the holders of the 20 largest unsecured claims 
        against the debtor;
            ``(3) counterparties to any debt, executory contract, 
        unexpired lease, qualified financial contract, or agreement 
        requested to be transferred under this section;
            ``(4) the Board;
            ``(5) the Federal Deposit Insurance Corporation;
            ``(6) the Secretary of the Treasury;
            ``(7) the Comptroller of the Currency;
            ``(8) the Securities and Exchange Commission;
            ``(9) the United States trustee or bankruptcy 
        administrator; and
            ``(10) each primary financial regulatory agency (as defined 
        in section 2(12) of the Dodd-Frank Wall Street Reform and 
        Consumer Protection Act (12 U.S.C. 5301(12))) with respect to 
        any affiliate the equity securities of which are proposed to be 
        transferred under this section.
    ``(c) Determination.--The court may not order a transfer under this 
section unless the court determines, based upon a preponderance of the 
evidence, that--
            ``(1) the transfer under this section is necessary to 
        prevent serious adverse effects on financial stability in the 
        United States;
            ``(2) the transfer does not provide for the assumption of 
        any capital structure debt by the bridge company;
            ``(3) the transfer does not provide for the transfer to the 
        bridge company of any property of the estate that is subject to 
        a lien securing a debt, executory contract, unexpired lease, or 
        agreement of the debtor unless--
                    ``(A)(i) the bridge company assumes such debt, 
                executory contract, unexpired lease, or agreement, 
                including any claims arising in respect thereof that 
                would not be allowed secured claims under section 
                506(a)(1), and after giving effect to such transfer, 
                such property remains subject to the lien securing such 
                debt, executory contract, unexpired lease, or 
                agreement; and
                    ``(ii) the court has determined that assumption of 
                such debt, executory contract, unexpired lease, or 
                agreement by the bridge company is in the best interest 
                of the estate; or
                    ``(B) such property is being transferred to the 
                bridge company in accordance with the provisions of 
                section 363;
            ``(4) the transfer does not provide for the assumption by 
        the bridge company of any debt, executory contract, unexpired 
        lease, or agreement of the debtor secured by a lien on property 
        in which the estate has an interest unless the transfer 
        provides for such property to be transferred to the bridge 
        company in accordance with paragraph (3)(A) of this subsection;
            ``(5) the transfer does not provide for the transfer of the 
        equity of the debtor;
            ``(6) the debtor has demonstrated that the bridge company 
        is not likely to fail to meet the obligations of any debt, 
        executory contract, qualified financial contract, unexpired 
        lease, or other agreement assumed and assigned to the bridge 
        company;
            ``(7) the transfer provides for the transfer to a special 
        trustee all of the equity securities in the bridge company and 
        appointment of a special trustee in accordance with section 
        1406;
            ``(8) after giving effect to the transfer, adequate 
        provision has been made for the payment of the fees, costs, and 
        expenses of the estate and special trustee; and
            ``(9) the bridge company will have governing documents, and 
        initial directors and senior officers, that are in the best 
        interest of creditors and the estate.
    ``(d) Requirements Before Transfer.--Immediately before a transfer 
under this section, the bridge company that is the recipient of the 
transfer shall--
            ``(1) not have any property, debts, executory contracts, 
        unexpired leases, qualified financial contracts, or agreements, 
        other than any property acquired or debts, executory contracts, 
        unexpired leases, qualified financial contracts, or agreements 
        assumed when acting as a transferee of a transfer under this 
        section; and
            ``(2) have equity securities that are property of the 
        estate, which may be sold or distributed in accordance with 
        this title.
``Sec. 1406. Special trustee
    ``(a) In General.--
            ``(1) Transfer to special trustee.--An order approving a 
        transfer under section 1405 shall require the trustee to 
        transfer to a special trustee all of the equity securities in 
        the bridge company that is the recipient of a transfer under 
        section 1405 to hold in trust for the sole benefit of the 
        estate subject to satisfaction of the special trustee's fees, 
        costs, and expenses. The trust of which the special trustee is 
        the trustee shall be a newly formed trust governed by a trust 
        agreement approved by the court as in the best interests of the 
        estate, and shall exist for the sole purpose of holding and 
        administering, and shall be permitted to dispose of, the equity 
        securities of the bridge company in accordance with the trust 
        agreement.
            ``(2) Appointment of special trustee.--
                    ``(A) In general.--A special trustee shall be 
                qualified and independent and shall be appointed by the 
                court.
                    ``(B) Proposal by trustee.--In connection with the 
                hearing to approve a transfer under section 1405, the 
                trustee may propose to the court a person to serve as 
                special trustee, if the trustee confirms to the court 
                that the Board has been consulted regarding the 
                identity of the proposed special trustee and advises 
                the court of the results of such consultation.
    ``(b) Trust Agreement.--The trust agreement governing a trust 
formed under subsection (a)(1) shall provide--
            ``(1) for the payment of the fees, costs, expenses, and 
        indemnities of the special trustee from the assets of the 
        debtor's estate;
            ``(2) that the special trustee provide--
                    ``(A) quarterly reporting to the estate, which 
                shall be filed with the court; and
                    ``(B) information about the bridge company 
                reasonably requested by a party in interest to prepare 
                a disclosure statement for a plan providing for 
                distribution of any securities of the bridge company if 
                such information is necessary to prepare such 
                disclosure statement;
            ``(3) that for as long as the equity securities of the 
        bridge company are held by the trust, the special trustee shall 
        file a notice with the court in connection with--
                    ``(A) any change in a director or senior officer of 
                the bridge company;
                    ``(B) any modification to the governing documents 
                of the bridge company; or
                    ``(C) any material corporate action of the bridge 
                company, including--
                            ``(i) recapitalization;
                            ``(ii) a material borrowing;
                            ``(iii) termination of an intercompany debt 
                        or guarantee;
                            ``(iv) a transfer of a substantial portion 
                        of the assets of the bridge company; or
                            ``(v) the issuance or sale of any 
                        securities of the bridge company;
            ``(4) that any sale of any equity securities of the bridge 
        company shall not be consummated until the special trustee 
        consults with the Federal Deposit Insurance Corporation and the 
        Board regarding such sale and discloses the results of such 
        consultation with the court;
            ``(5) that, subject to reserves for payments permitted 
        under paragraph (1) provided for in the trust agreement, the 
        proceeds of the sale of any equity securities of the bridge 
        company by the special trustee be held in trust for the benefit 
        of or transferred to the estate;
            ``(6) the process and guidelines for the replacement of the 
        special trustee; and
            ``(7) that the property held in trust by the special 
        trustee is subject to distribution in accordance with 
        subsection (c).
    ``(c) Distribution of Assets Held in Trust.--
            ``(1) In general.--The special trustee shall distribute the 
        assets held in trust--
                    ``(A) if the court confirms a plan in the case, in 
                accordance with the plan on the effective date of the 
                plan; or
                    ``(B) if the case is converted to a case under 
                chapter 7 under section 1410.
            ``(2) Termination.--As soon as practicable after a final 
        distribution under paragraph (1), the office of the special 
        trustee shall terminate, except as may be necessary to wind up 
        and conclude the business and financial affairs of the trust.
    ``(d) Applicability.--After a transfer to the special trustee under 
this section, the special trustee shall be subject only to applicable 
nonbankruptcy law, and the actions and conduct of the special trustee 
shall no longer be subject to approval by the court in the case under 
this chapter.
``Sec. 1407. Automatic stay; assumption
    ``(a) Automatic Stay.--
            ``(1) In general.--A petition filed under section 1403 
        operates as a stay, applicable to all entities, of the 
        acceleration, termination, or modification of any debt, 
        contract, lease, or agreement of the kind described in 
        paragraph (2), or of any right or obligation under any such 
        debt, contract, lease, or agreement, solely because of--
                    ``(A) a default by the debtor under any such debt, 
                contract, lease, or agreement; or
                    ``(B) a provision in such debt, contract, lease, or 
                agreement, or in applicable nonbankruptcy law, that is 
                conditioned on--
                            ``(i) the insolvency or financial condition 
                        of the debtor at any time before the closing of 
                        the case;
                            ``(ii) the commencement of a case under 
                        this title concerning the debtor;
                            ``(iii) the appointment of or taking 
                        possession by a trustee in a case under this 
                        title concerning the debtor or by a custodian 
                        before the commencement of the case; or
                            ``(iv) a credit rating agency rating, or 
                        absence or withdrawal of a credit rating agency 
                        rating of--
                                    ``(I) the debtor at any time after 
                                the commencement of the case;
                                    ``(II) an affiliate during the 48 
                                hours after the commencement of the 
                                case;
                                    ``(III) the bridge company while 
                                the trustee or the special trustee is a 
                                direct or indirect beneficial holder of 
                                more than 50 percent of the equity 
                                securities of--
                                            ``(aa) the bridge company; 
                                        or
                                            ``(bb) an affiliate, if all 
                                        of the direct or indirect 
                                        interests in the affiliate that 
                                        are property of the estate are 
                                        transferred under section 1406; 
                                        or
                                    ``(IV) an affiliate while the 
                                trustee or the special trustee is a 
                                direct or indirect beneficial holder of 
                                more than 50 percent of the equity 
                                securities of--
                                            ``(aa) the bridge company; 
                                        or
                                            ``(bb) the affiliate, if 
                                        all of the direct or indirect 
                                        interests in the affiliate that 
                                        are property of the estate are 
                                        transferred under section 1405.
            ``(2) Debt, contract, lease, or agreement.--A debt, 
        contract, lease, or agreement described in this paragraph--
                    ``(A) is--
                            ``(i) any debt, executory contract, or 
                        unexpired lease of the debtor;
                            ``(ii) any agreement under which the debtor 
                        issued or is obligated for debt;
                            ``(iii) any debt, executory contract, or 
                        unexpired lease of an affiliate; and
                            ``(iv) any agreement under which an 
                        affiliate issued or is obligated for debt; and
                    ``(B) does not include capital structure debt or 
                qualified financial contracts.
            ``(3) Termination of stay.--A stay under this subsection 
        terminates--
                    ``(A) as to the debtor, upon the earliest of--
                            ``(i) 48 hours after the commencement of 
                        the case;
                            ``(ii) assumption of the debt, contract, 
                        lease, or agreement by the bridge company under 
                        an order authorizing a transfer under section 
                        1405;
                            ``(iii) a final order of the court denying 
                        the request for a transfer of the debt, 
                        contract, lease, or agreement under section 
                        1405; or
                            ``(iv) the time the case is dismissed; and
                    ``(B) as to an affiliate, upon the earliest of--
                            ``(i) 48 hours after the commencement of 
                        the case, if the court has not ordered a 
                        transfer under section 1405;
                            ``(ii) the entry of an order authorizing a 
                        transfer under section 1405 in which the direct 
                        or indirect interests in the affiliate that are 
                        property of the estate are not transferred 
                        under section 1405;
                            ``(iii) a final order of the court denying 
                        the request for a transfer under section 1405; 
                        or
                            ``(iv) the time the case is dismissed.
            ``(4) Applicability.--Sections (d), (e), (f), and (g) of 
        section 362 apply to a stay under this subsection.
    ``(b) Assumption by Bridge Company.--A debt, executory contract, 
unexpired lease of the debtor, or any other agreement described in 
subsection (a)(2), may be assumed by a bridge company in a transfer 
under section 1405 notwithstanding any provision in an agreement or in 
applicable nonbankruptcy law that--
            ``(1) prohibits, restricts, or conditions the assignment of 
        the debt, contract, lease, or agreement; or
            ``(2) accelerates, terminates, or modifies, or permits a 
        party other than the debtor to accelerate, terminate, or 
        modify, the debt, contract, lease, or agreement on account of--
                    ``(A) the assignment of the debt, contract, lease, 
                or agreement; or
                    ``(B) a change in control of any party to the debt, 
                contract, lease, or agreement.
    ``(c) No Acceleration, Termination, or Modification of Agreements 
of Debtor.--
            ``(1) In general.--A debt, contract, lease, or agreement of 
        the kind described in subsection (a)(2) may not be accelerated, 
        terminated, or modified, and any right or obligation under such 
        debt, contract, lease, or agreement may not be accelerated, 
        terminated, or modified, as to the bridge company solely 
        because of a provision in the debt, contract, lease, or 
        agreement or in applicable nonbankruptcy law--
                    ``(A) of the kind described in subsection (a)(1)(B) 
                as applied to the debtor;
                    ``(B) that prohibits, restricts, or conditions the 
                assignment of the debt, contract, lease, or agreement; 
                or
                    ``(C) that accelerates, terminates, or modifies, or 
                permits a party other than the debtor to accelerate, 
                terminate, or modify, the debt, contract, lease or 
                agreement, on account of--
                            ``(i) the assignment of the debt, contract, 
                        lease, or agreement; or
                            ``(ii) a change in control of any party to 
                        the debt, contract, lease, or agreement.
            ``(2) Default.--If there has been a default by the debtor 
        under a provision other than the kind described in paragraph 
        (1) in a debt, contract, lease, or agreement of the kind 
        described in subsection (a)(2), the bridge company may assume 
        such debt, contract, lease, or agreement only if the bridge 
        company--
                    ``(A) cures, or provides adequate assurance in 
                connection with a transfer under section 1405 that the 
                bridge company will promptly cure, the default;
                    ``(B) compensates, or provides adequate assurance 
                in connection with a transfer under section 1405 that 
                the bridge company will promptly compensate, a party 
                other than the debtor to the debt, contract, lease, or 
                agreement, for any actual pecuniary loss to the party 
                resulting from the default; and
                    ``(C) provides adequate assurance in connection 
                with a transfer under section 1405 of future 
                performance under the debt, contract, lease, or 
                agreement, as determined by the court under section 
                1405(c)(4).
``Sec. 1408. Treatment of qualified financial contracts and affiliate 
              contracts
    ``(a) In General.--Notwithstanding sections 362(b)(6), 362(b)(7), 
362(b)(17), 362(b)(27), 362(o), 555, 556, 559, 560, and 561, a petition 
filed under section 1403 operates as a stay, during the period 
specified in section 1407(a)(3)(A), applicable to all entities, of the 
exercise of a contractual right--
            ``(1) to cause the acceleration, termination, modification, 
        or liquidation of a qualified financial contract of the debtor 
        or an affiliate;
            ``(2) to offset or net out any termination value, payment 
        amount, or other transfer obligation arising under or in 
        connection with a qualified financial contract of the debtor or 
        an affiliate; or
            ``(3) under any security agreement or arrangement or other 
        credit enhancement forming a part of or related to a qualified 
        financial contract of the debtor or an affiliate.
    ``(b) Payment and Delivery Obligations.--
            ``(1) In general.--During the period specified in section 
        1407(a)(3)(A), the trustee or the affiliate shall perform all 
        payment and delivery obligations under a qualified financial 
        contract of the debtor or the affiliate, as the case may be, 
        that become due after the commencement of the case. The stay 
        provided under subsection (a) terminates as to a qualified 
        financial contract of the debtor or an affiliate immediately 
        upon the failure of the trustee or the affiliate, as the case 
        may be, to perform any such obligation during such period.
            ``(2) Failure to perform.--Any failure by a counterparty to 
        any qualified financial contract of the debtor or any affiliate 
        to perform any payment or delivery obligation under such 
        qualified financial contract, including during the pendency of 
        the stay provided under subsection (a), shall constitute a 
        breach of such qualified financial contract by the 
        counterparty.
    ``(c) Assignment or Assumption.--Notwithstanding any provision of 
subsection 1407(b) or applicable nonbankruptcy law, subject to the 
court's approval, a qualified financial contract between an entity and 
the debtor may be assigned to or assumed by the bridge company in a 
transfer under section 1405 only if--
            ``(1) all qualified financial contracts between the entity 
        and the debtor are assigned to and assumed by the bridge 
        company in the transfer under section 1405;
            ``(2) all claims of the entity against the debtor under any 
        qualified financial contract between the entity and the debtor 
        (other than any claim that, under the terms of the qualified 
        financial contract, is subordinated to the claims of general 
        unsecured creditors) are assigned to and assumed by the bridge 
        company;
            ``(3) all claims of the debtor against the entity under any 
        qualified financial contract between the entity and the debtor 
        are assigned to and assumed by the bridge company; and
            ``(4) all property securing or any other credit enhancement 
        furnished by the debtor for any qualified financial contract 
        described in paragraph (1) or any claim described in paragraph 
        (2) or (3) under any qualified financial contract between the 
        entity and the debtor is assigned to and assumed by the bridge 
        company.
    ``(d) No Acceleration, Termination, or Modification of Qualified 
Financial Contracts.--Notwithstanding any provision of a qualified 
financial contract or of applicable nonbankruptcy law, a qualified 
financial contract of the debtor that is assumed by or assigned to the 
bridge company in a transfer under section 1405 may not be accelerated, 
terminated, modified, or liquidated after the entry of the order 
approving a transfer under section 1405, and any right or obligation 
under the qualified financial contract may not be accelerated, 
terminated, or modified, after the entry of the order approving a 
transfer under section 1405 solely because of a provision of the kind 
described in section 1407(c)(1), other than a provision of the kind 
described in section 1407(b) that occurs after property of the estate 
no longer includes a direct beneficial interest or an indirect 
beneficial interest through the special trustee, in more than 50 
percent of the equity securities of the bridge company.
    ``(e) No Acceleration, Termination, Modification, or Liquidation of 
Agreements of Affiliates.--Notwithstanding any provision in any 
agreement or in applicable nonbankruptcy law, an agreement (including 
an executory contract, unexpired lease, qualified financial contract, 
or an agreement under which the affiliate issued or is obligated for 
debt) of an affiliate that is assumed by or assigned to the bridge 
company in a transfer under section 1405, and any right or obligation 
under such agreement, may not be accelerated, terminated, modified, or 
liquidated after the entry of the order approving a transfer under 
section 1405 solely because of a provision of the kind described in 
section 1407(c)(1), other than a provision of the kind described in 
section 1407(b) that occurs after the bridge company is no longer a 
direct or indirect beneficial holder of more than 50 percent of the 
equity securities of the affiliate at any time after the commencement 
of the case if--
            ``(1) all direct or indirect interests in the affiliate 
        that are property of the estate are transferred under section 
        1405 to the bridge company within the period specified in 
        subsection (a);
            ``(2) the bridge company assumes--
                    ``(A) any guarantee or other credit enhancement 
                issued by the debtor relating to the agreement of the 
                affiliate; and
                    ``(B) any right of setoff, netting arrangement, or 
                debt of the debtor that directly arises out of or 
                directly relates to the guarantee or credit 
                enhancement; and
            ``(3) any property of the estate that directly serves as 
        collateral for the guarantee or credit enhancement is 
        transferred to the bridge company.
``Sec. 1409. Licenses, permits, and registrations
    ``(a) In General.--Notwithstanding any otherwise applicable 
nonbankruptcy law, if a request is made under section 1405 for a 
transfer of property of the estate, any Federal, State, or local 
license, permit, or registration that the debtor or an affiliate had 
immediately before the commencement of the case and that is proposed to 
be transferred under section 1405 may not be accelerated, terminated, 
or modified at any time after the request solely on account of--
            ``(1) the insolvency or financial condition of the debtor 
        at any time before the closing of the case;
            ``(2) the commencement of a case under this title 
        concerning the debtor;
            ``(3) the appointment of or taking possession by a trustee 
        in a case under this title concerning the debtor or by a 
        custodian before the commencement of the case; or
            ``(4) a transfer under section 1405.
    ``(b) Validity of Certain Licenses, Permits, and Registrations.--
Notwithstanding any otherwise applicable nonbankruptcy law, any 
Federal, State, or local license, permit, or registration that the 
debtor had immediately before the commencement of the case that is 
included in a transfer under section 1405 shall be valid and all rights 
and obligations thereunder shall vest in the bridge company.
``Sec. 1410. Conversion to chapter 7
    ``Notwithstanding section 109(b), a court may convert a case under 
this chapter to a case under chapter 7 if--
            ``(1) a transfer described in section 1405 has taken place;
            ``(2) the court has ordered the appointment of a special 
        trustee under section 1406; and
            ``(3) the court finds, after providing notice and 
        conducting a hearing, that the conversion of the case is in the 
        best interests of the creditors and the estate.
``Sec. 1411. Exemption from securities laws
    ``For purposes of section 1145, a security of the bridge company 
shall be deemed to be a security of a successor to the debtor under a 
plan if the court approves the disclosure statement for the plan as 
providing adequate information (as defined in section 1125(a)) about 
the bridge company and the security.
``Sec. 1412. Inapplicability of certain avoiding powers
    ``A transfer made or an obligation incurred by the debtor to an 
affiliate prior to or after the commencement of the case, including any 
obligation released by the debtor or the estate to or for the benefit 
of an affiliate, in contemplation of or in connection with a transfer 
under section 1405, is not avoidable under section 544, 547, 
548(a)(1)(B), or 549, or under any similar nonbankruptcy law.
``Sec. 1413. Consideration of financial stability
    ``The court may consider the effect that any decision in connection 
with this chapter may have on financial stability in the United 
States.''.
    (b) Technical and Conforming Amendment.--The table of chapters for 
title 11, United States Code, is amended by inserting after the item 
relating to chapter 13 the following:

``14.  Liquidation, reorganization, or recapitalization of a    1401''.
                            covered financial corporation.

SEC. 4. AMENDMENTS TO TITLE 28, UNITED STATES CODE.

    (a) Amendment to Chapter 13.--Chapter 13 of title 28, United States 
Code, is amended by adding at the end the following:
``Sec. 298. Judge for a case under chapter 14 of title 11
    ``(a) Notwithstanding section 295, the Chief Justice of the United 
States shall designate not fewer than 10 bankruptcy judges to be 
available to hear a case under chapter 14 of title 11. Bankruptcy 
judges may request to be considered by the Chief Justice of the United 
States for such designation.
    ``(b)(1) Notwithstanding section 155, a case under chapter 14 of 
title 11 shall be heard under section 157 by a bankruptcy judge 
designated under subsection (a), who shall be assigned to hear such 
case by the chief judge of the court of appeals for the circuit 
embracing the district in which the case is pending.
    ``(2) If the bankruptcy judge assigned to hear a case under 
paragraph (1) is not assigned to the district in which the case is 
pending, the bankruptcy judge shall be temporarily assigned to the 
district. To the greatest extent practicable, the approvals required 
under section 155(a) shall be obtained.
    ``(c) A case under chapter 14 of title 11, and all proceedings in 
the case, shall take place in the district in which the case is 
pending.''.
    (b) Amendment to Section 1334.--Section 1334 of title 28, United 
States Code, is amended by adding at the end the following:
    ``(f) This section does not grant jurisdiction to the district 
court after a transfer pursuant to an order under section 1405 of title 
11 of any proceeding related to a special trustee appointed, or to a 
bridge company formed to accomplish a transfer, under section 1405 of 
title 11.''.
    (c) Technical and Conforming Amendment.--The table of sections for 
chapter 13 of title 28, United States Code, is amended by adding at the 
end the following:

``298. Judge for a case under chapter 14 of title 11.''.

SEC. 5. REPEAL OF TITLE II OF DODD-FRANK WALL STREET REFORM AND 
              CONSUMER PROTECTION ACT.

    (a) In General.--Title II of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act (Public Law 111-203) is repealed and any 
Federal law amended by such title shall, on and after the date of 
enactment of this Act, be effective as if title II of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act had not been enacted.
    (b) Conforming Amendments.--
            (1) Dodd-frank wall street reform and consumer protection 
        act.--The Dodd-Frank Wall Street Reform and Consumer Protection 
        Act is amended--
                    (A) in the table of contents, by striking all items 
                relating to title II;
                    (B) in section 165(d)(6), by striking ``, a 
                receiver appointed under title II,'';
                    (C) in section 716(g), by striking ``or a covered 
                financial company under title II'';
                    (D) in section 1105(e)(5), by striking ``amount of 
                any securities issued under that chapter 31 for such 
                purpose shall be treated in the same manner as 
                securities issued under section 208(n)(5)(E)'' and 
                inserting ``issuances of such securities under that 
                chapter 31 for such purpose shall be treated as public 
                debt transactions of the United States, and the 
                proceeds from the sale of any obligations acquired by 
                the Secretary under this paragraph shall be deposited 
                into the Treasury of the United States as miscellaneous 
                receipts''; and
                    (E) in section 1106(c)(2)(A)--
                            (i) in clause (i), by inserting ``, other 
                        than a covered financial corporation (as 
                        defined in section 101(9A) of title 11, United 
                        States Code),'' after ``company''; and
                            (ii) in clause (ii), by inserting ``, other 
                        than a covered financial corporation (as 
                        defined in section 101(9A) of title 11, United 
                        States Code),'' after ``company''.
            (2) Federal deposit insurance act.--Section 10(b)(3)(A) of 
        the Federal Deposit Insurance Act (12 U.S.C. 1820(b)(3)(A)) is 
        amended by striking ``, or of such nonbank financial company 
        supervised by the Board of Governors or bank holding company 
        described in section 165(a) of the Financial Stability Act of 
        2010, for the purpose of implementing its authority to provide 
        for orderly liquidation of any such company under title II of 
        that Act''.
            (3) Federal reserve act.--Section 13(3) of the Federal 
        Reserve Act (12 U.S.C. 343(3)) is amended--
                    (A) in subparagraph (B)--
                            (i) in clause (ii), by striking ``, 
                        resolution under title II of the Dodd-Frank 
                        Wall Street Reform and Consumer Protection Act, 
                        or'' and inserting ``or is subject to 
                        resolution under''; and
                            (ii) in clause (iii), by striking ``, 
                        resolution under title II of the Dodd-Frank 
                        Wall Street Reform and Consumer Protection Act, 
                        or'' and inserting ``or resolution under''; and
                    (B) by striking subparagraph (E).

SEC. 6. LIMITATION ON ADVANCES FROM A FEDERAL RESERVE BANK.

    Section 10B(b) of the Federal Reserve Act (12 U.S.C. 347b(b)) is 
amended--
            (1) by redesignating paragraph (5) as paragraph (6);
            (2) by inserting after paragraph (4) the following:
            ``(5) Limitation on advances to covered financial 
        corporations and bridge companies.--Notwithstanding paragraph 
        (2), a Federal Reserve bank may not make advances to any 
        covered financial corporation that is a debtor in a pending 
        case under chapter 14 of title 11, United States Code, or to a 
        bridge company, for the purpose of providing debtor-in-
        possession financing pursuant to section 364 of such title.''; 
        and
            (3) in paragraph (6), as redesignated--
                    (A) by redesignating subparagraphs (B) through (E) 
                as subparagraphs (D) through (G), respectively; and
                    (B) by inserting after subparagraph (A) the 
                following:
                    ``(B) Bridge company.--The term `bridge company' 
                has the same meaning as in section 1402(2) of title 11, 
                United States Code.
                    ``(C) Covered financial corporation.--The term 
                `covered financial corporation' has the same meaning as 
                in section 101(9A) of title 11, United States Code.''.

SEC. 7. LIMITATION ON USE OF FEDERAL FUNDS.

    Notwithstanding any other provision of law, no funds appropriated 
to the Federal Government may be paid to a covered financial 
corporation (as defined in section 101(9A) of title 11, United States 
Code, as amended by section 2(a) of this Act), or to a creditor of any 
covered financial corporation, to satisfy a claim in a case under 
chapter 14 of title 11, United States Code.
                                 <all>
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