244
‘‘(C) the aggregate amount of debt dis-
charged in cases filed during the reporting pe-
riod, determined as the difference between the 
total amount of debt and obligations of a debtor 
reported on the schedules and the amount of 
such debt reported in categories which are pre-
dominantly nondischargeable; 
‘‘(D) the average period of time between 
the filing of the petition and the closing of the 
case for cases closed during the reporting pe-
riod; 
‘‘(E) for cases closed during the reporting 
period—
‘‘(i) the number of cases in which a 
reaffirmation was filed; and 
‘‘(ii)(I) the total number of reaffirma-
tions filed; 
‘‘(II) of those cases in which a reaffir-
mation was filed, the number of cases in 
which the debtor was not represented by 
an attorney; and 
‘‘(III) of those cases in which a reaf-
firmation was filed, the number of cases in 
which the reaffirmation was approved by 
the court;
245
‘‘(F) with respect to cases filed under 
chapter 13 of title 11, for the reporting pe-
riod—
‘‘(i)(I) the number of cases in which a 
final order was entered determining the 
value of property securing a claim in an 
amount less than the amount of the claim; 
and 
‘‘(II) the number of final orders en-
tered determining the value of property se-
curing a claim; 
‘‘(ii) the number of cases dismissed, 
the number of cases dismissed for failure 
to make payments under the plan, the 
number of cases refiled after dismissal, 
and the number of cases in which the plan 
was completed, separately itemized with re-
spect to the number of modifications made 
before completion of the plan, if any; and 
‘‘(iii) the number of cases in which 
the debtor filed another case during the 6-
year period preceding the filing; 
‘‘(G) the number of cases in which credi-
tors were fined for misconduct and any amount
246
of punitive damages awarded by the court for 
creditor misconduct; and 
‘‘(H) the number of cases in which sanc-
tions under rule 9011 of the Federal Rules of 
Bankruptcy Procedure were imposed against 
debtor’s attorney or damages awarded under 
such Rule.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 6 of title 28, United States Code, is amended 
by adding at the end the following:
‘‘159. Bankruptcy statistics.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect 18 months after the date of 
enactment of this Act. 
SEC. 602. UNIFORM RULES FOR THE COLLECTION OF BANK-
RUPTCY DATA. 
(a) AMENDMENT.—Chapter 39 of title 28, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘§ 589b. Bankruptcy data 
‘‘(a) RULES.—The Attorney General shall, within a 
reasonable time after the effective date of this section, 
issue rules requiring uniform forms for (and from time 
to time thereafter to appropriately modify and approve)—
‘‘(1) final reports by trustees in cases under 
chapters 7, 12, and 13 of title 11; and
247
‘‘(2) periodic reports by debtors in possession or 
trustees in cases under chapter 11 of title 11. 
‘‘(b) REPORTS.—Each report referred to in sub-
section (a) shall be designed (and the requirements as to 
place and manner of filing shall be established) so as to 
facilitate compilation of data and maximum possible ac-
cess of the public, both by physical inspection at one or 
more central filing locations, and by electronic access 
through the Internet or other appropriate media. 
‘‘(c) REQUIRED INFORMATION.—The information re-
quired to be filed in the reports referred to in subsection 
(b) shall be that which is in the best interests of debtors 
and creditors, and in the public interest in reasonable and 
adequate information to evaluate the efficiency and practi-
cality of the Federal bankruptcy system. In issuing rules 
proposing the forms referred to in subsection (a), the At-
torney General shall strike the best achievable practical 
balance between—
‘‘(1) the reasonable needs of the public for in-
formation about the operational results of the Fed-
eral bankruptcy system; 
‘‘(2) economy, simplicity, and lack of undue 
burden on persons with a duty to file reports; and 
‘‘(3) appropriate privacy concerns and safe-
guards.
248
‘‘(d) FINAL REPORTS.—The uniform forms for final 
reports required under subsection (a) for use by trustees 
under chapters 7, 12, and 13 of title 11 shall, in addition 
to such other matters as are required by law or as the 
Attorney General in the discretion of the Attorney General 
shall propose, include with respect to a case under such 
title—
‘‘(1) information about the length of time the 
case was pending; 
‘‘(2) assets abandoned; 
‘‘(3) assets exempted; 
‘‘(4) receipts and disbursements of the estate; 
‘‘(5) expenses of administration, including for 
use under section 707(b), actual costs of admin-
istering cases under chapter 13 of title 11; 
‘‘(6) claims asserted; 
‘‘(7) claims allowed; and 
‘‘(8) distributions to claimants and claims dis-
charged without payment, 
in each case by appropriate category and, in cases under 
chapters 12 and 13 of title 11, date of confirmation of 
the plan, each modification thereto, and defaults by the 
debtor in performance under the plan. 
‘‘(e) PERIODIC REPORTS.—The uniform forms for 
periodic reports required under subsection (a) for use by
249
trustees or debtors in possession under chapter 11 of title 
11 shall, in addition to such other matters as are required 
by law or as the Attorney General in the discretion of the 
Attorney General shall propose, include—
‘‘(1) information about the standard industry 
classification, published by the Department of Com-
merce, for the businesses conducted by the debtor; 
‘‘(2) length of time the case has been pending; 
‘‘(3) number of full-time employees as of the 
date of the order for relief and at the end of each 
reporting period since the case was filed; 
‘‘(4) cash receipts, cash disbursements and 
profitability of the debtor for the most recent period 
and cumulatively since the date of the order for re-
lief; 
‘‘(5) compliance with title 11, whether or not 
tax returns and tax payments since the date of the 
order for relief have been timely filed and made; 
‘‘(6) all professional fees approved by the court 
in the case for the most recent period and cumula-
tively since the date of the order for relief (sepa-
rately reported, for the professional fees incurred by 
or on behalf of the debtor, between those that would 
have been incurred absent a bankruptcy case and 
those not); and
250
‘‘(7) plans of reorganization filed and confirmed 
and, with respect thereto, by class, the recoveries of 
the holders, expressed in aggregate dollar values 
and, in the case of claims, as a percentage of total 
claims of the class allowed.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 39 of title 28, United States Code, is amended 
by adding at the end the following:
‘‘589b. Bankruptcy data.’’.
SEC. 603. AUDIT PROCEDURES. 
(a) IN GENERAL.—
(1) ESTABLISHMENT
OF
PROCEDURES.—The 
Attorney General (in judicial districts served by 
United States trustees) and the Judicial Conference 
of the United States (in judicial districts served by 
bankruptcy administrators) shall establish proce-
dures to determine the accuracy, veracity, and com-
pleteness of petitions, schedules, and other informa-
tion which the debtor is required to provide under 
sections 521 and 1322 of title 11, United States 
Code, and, if applicable, section 111 of such title, in 
cases filed under chapter 7 or 13 of such title in 
which the debtor is an individual. Such audits shall 
be in accordance with generally accepted auditing 
standards and performed by independent certified 
public accountants or independent licensed public ac-
251
countants, provided that the Attorney General and 
the Judicial Conference, as appropriate, may develop 
alternative auditing standards not later than 2 years 
after the date of enactment of this Act. 
(2) PROCEDURES.—Those procedures required 
by paragraph (1) shall—
(A) establish a method of selecting appro-
priate qualified persons to contract to perform 
those audits; 
(B) establish a method of randomly select-
ing cases to be audited, except that not less 
than 1 out of every 250 cases in each Federal 
judicial district shall be selected for audit; 
(C) require audits for schedules of income 
and expenses which reflect greater than average 
variances from the statistical norm of the dis-
trict in which the schedules were filed if those 
variances occur by reason of higher income or 
higher expenses than the statistical norm of the 
district in which the schedules were filed; and 
(D) establish procedures for providing, not 
less frequently than annually, public informa-
tion concerning the aggregate results of such 
audits including the percentage of cases, by dis-
252
trict, in which a material misstatement of in-
come or expenditures is reported. 
(b) AMENDMENTS.—Section 586 of title 28, United 
States Code, is amended—
(1) in subsection (a), by striking paragraph (6) 
and inserting the following: 
‘‘(6) make such reports as the Attorney General 
directs, including the results of audits performed 
under section 603(a) of the Bankruptcy Abuse Pre-
vention and Consumer Protection Act of 2003;’’; and 
(2) by adding at the end the following: 
‘‘(f)(1) The United States trustee for each district is 
authorized to contract with auditors to perform audits in 
cases designated by the United States trustee, in accord-
ance with the procedures established under section 603(a) 
of the Bankruptcy Abuse Prevention and Consumer Pro-
tection Act of 2003. 
‘‘(2)(A) The report of each audit referred to in para-
graph (1) shall be filed with the court and transmitted 
to the United States trustee. Each report shall clearly and 
conspicuously specify any material misstatement of income 
or expenditures or of assets identified by the person per-
forming the audit. In any case in which a material 
misstatement of income or expenditures or of assets has 
been reported, the clerk of the district court (or the clerk
253
of the bankruptcy court if one is certified under section 
156(b) of this title) shall give notice of the misstatement 
to the creditors in the case. 
‘‘(B) If a material misstatement of income or expend-
itures or of assets is reported, the United States trustee 
shall—
‘‘(i) report the material misstatement, if appro-
priate, to the United States Attorney pursuant to 
section 3057 of title 18; and 
‘‘(ii) if advisable, take appropriate action, in-
cluding but not limited to commencing an adversary 
proceeding to revoke the debtor’s discharge pursuant 
to section 727(d) of title 11.’’. 
(c) AMENDMENTS TO SECTION 521 OF TITLE 11, 
U.S.C.—Section 521(a) of title 11, United States Code, 
as so designated by section 106, is amended in each of 
paragraphs (3) and (4) by inserting ‘‘or an auditor ap-
pointed under section 586(f) of title 28’’ after ‘‘serving 
in the case’’. 
(d) AMENDMENTS TO SECTION 727 OF TITLE 11, 
U.S.C.—Section 727(d) of title 11, United States Code, 
is amended—
(1) in paragraph (2), by striking ‘‘or’’ at the 
end;
254
(2) in paragraph (3), by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(4) the debtor has failed to explain satisfac-
torily—
‘‘(A) a material misstatement in an audit 
referred to in section 586(f) of title 28; or 
‘‘(B) a failure to make available for inspec-
tion all necessary accounts, papers, documents, 
financial records, files, and all other papers, 
things, or property belonging to the debtor that 
are requested for an audit referred to in section 
586(f) of title 28.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall take effect 18 months after the date of 
enactment of this Act. 
SEC. 604. SENSE OF CONGRESS REGARDING AVAILABILITY 
OF BANKRUPTCY DATA. 
It is the sense of Congress that—
(1) the national policy of the United States 
should be that all data held by bankruptcy clerks in 
electronic form, to the extent such data reflects only 
public records (as defined in section 107 of title 11, 
United States Code), should be released in a usable 
electronic form in bulk to the public, subject to such
255
appropriate privacy concerns and safeguards as Con-
gress and the Judicial Conference of the United 
States may determine; and 
(2) there should be established a bankruptcy 
data system in which—
(A) a single set of data definitions and 
forms are used to collect data nationwide; and 
(B) data for any particular bankruptcy 
case are aggregated in the same electronic 
record. 
TITLE VII—BANKRUPTCY TAX 
PROVISIONS 
SEC. 701. TREATMENT OF CERTAIN LIENS. 
(a) TREATMENT OF CERTAIN LIENS.—Section 724 
of title 11, United States Code, is amended—
(1) in subsection (b), in the matter preceding 
paragraph (1), by inserting ‘‘(other than to the ex-
tent that there is a properly perfected unavoidable 
tax lien arising in connection with an ad valorem tax 
on real or personal property of the estate)’’ after 
‘‘under this title’’; 
(2) in subsection (b)(2), by inserting ‘‘(except 
that such expenses, other than claims for wages, sal-
aries, or commissions which arise after the filing of 
a petition, shall be limited to expenses incurred
256
under chapter 7 of this title and shall not include ex-
penses incurred under chapter 11 of this title)’’ after 
‘‘507(a)(1)’’; and 
(3) by adding at the end the following: 
‘‘(e) Before subordinating a tax lien on real or per-
sonal property of the estate, the trustee shall—
‘‘(1) exhaust the unencumbered assets of the 
estate; and 
‘‘(2) in a manner consistent with section 
506(c), recover from property securing an allowed 
secured claim the reasonable, necessary costs and 
expenses of preserving or disposing of that property. 
‘‘(f) Notwithstanding the exclusion of ad valorem tax 
liens under this section and subject to the requirements 
of subsection (e), the following may be paid from property 
of the estate which secures a tax lien, or the proceeds of 
such property: 
‘‘(1) Claims for wages, salaries, and commis-
sions that are entitled to priority under section 
507(a)(4). 
‘‘(2) Claims for contributions to an employee 
benefit plan entitled to priority under section 
507(a)(5).’’. 
(b) DETERMINATION OF TAX LIABILITY.—Section 
505(a)(2) of title 11, United States Code, is amended—
257
(1) in subparagraph (A), by striking ‘‘or’’ at 
the end; 
(2) in subparagraph (B), by striking the period 
at the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(C) the amount or legality of any amount aris-
ing in connection with an ad valorem tax on real or 
personal property of the estate, if the applicable pe-
riod for contesting or redetermining that amount 
under any law (other than a bankruptcy law) has ex-
pired.’’. 
SEC. 702. TREATMENT OF FUEL TAX CLAIMS. 
Section 501 of title 11, United States Code, is 
amended by adding at the end the following: 
‘‘(e) A claim arising from the liability of a debtor for 
fuel use tax assessed consistent with the requirements of 
section 31705 of title 49 may be filed by the base jurisdic-
tion designated pursuant to the International Fuel Tax 
Agreement (as defined in section 31701 of title 49) and, 
if so filed, shall be allowed as a single claim.’’. 
SEC. 703. NOTICE OF REQUEST FOR A DETERMINATION OF 
TAXES. 
Section 505(b) of title 11, United States Code, is 
amended—
258
(1) in the first sentence, by inserting ‘‘at the 
address and in the manner designated in paragraph 
(1)’’ after ‘‘determination of such tax’’; 
(2) by striking ‘‘(1) upon payment’’ and insert-
ing ‘‘(A) upon payment’’; 
(3) by striking ‘‘(A) such governmental unit’’ 
and inserting ‘‘(i) such governmental unit’’; 
(4) by striking ‘‘(B) such governmental unit’’ 
and inserting ‘‘(ii) such governmental unit’’; 
(5) by striking ‘‘(2) upon payment’’ and insert-
ing ‘‘(B) upon payment’’; 
(6) by striking ‘‘(3) upon payment’’ and insert-
ing ‘‘(C) upon payment’’; 
(7) by striking ‘‘(b)’’ and inserting ‘‘(2)’’; and 
(8) by inserting before paragraph (2), as so 
designated, the following: 
‘‘(b)(1)(A) The clerk shall maintain a listing under 
which a Federal, State, or local governmental unit respon-
sible for the collection of taxes within the district may—
‘‘(i) designate an address for service of requests 
under this subsection; and 
‘‘(ii) describe where further information con-
cerning additional requirements for filing such re-
quests may be found.
259
‘‘(B) If a governmental unit referred to in subpara-
graph (A) does not designate an address and provide that 
address to the clerk under that subparagraph, any request 
made under this subsection may be served at the address 
for the filing of a tax return or protest with the appro-
priate taxing authority of that governmental unit.’’. 
SEC. 704. RATE OF INTEREST ON TAX CLAIMS. 
(a) IN GENERAL.—Subchapter I of chapter 5 of title 
11, United States Code, is amended by adding at the end 
the following: 
‘‘§ 511. Rate of interest on tax claims 
‘‘(a) If any provision of this title requires the pay-
ment of interest on a tax claim or on an administrative 
expense tax, or the payment of interest to enable a creditor 
to receive the present value of the allowed amount of a 
tax claim, the rate of interest shall be the rate determined 
under applicable nonbankruptcy law. 
‘‘(b) In the case of taxes paid under a confirmed plan 
under this title, the rate of interest shall be determined 
as of the calendar month in which the plan is confirmed.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subchapter 1 of chapter 5 of title 11, United States 
Code, is amended by adding at the end the following:
‘‘511. Rate of interest on tax claims.’’.
260
SEC. 705. PRIORITY OF TAX CLAIMS. 
Section 507(a)(8) of title 11, United States Code, is 
amended—
(1) in subparagraph (A)—
(A) in the matter preceding clause (i), by 
inserting ‘‘for a taxable year ending on or be-
fore the date of the filing of the petition’’ after 
‘‘gross receipts’’; 
(B) in clause (i), by striking ‘‘for a taxable 
year ending on or before the date of the filing 
of the petition’’; and 
(C) by striking clause (ii) and inserting the 
following: 
‘‘(ii) assessed within 240 days before 
the date of the filing of the petition, exclu-
sive of—
‘‘(I) any time during which an 
offer in compromise with respect to 
that tax was pending or in effect dur-
ing that 240-day period, plus 30 days; 
and 
‘‘(II) any time during which a 
stay of proceedings against collections 
was in effect in a prior case under 
this title during that 240-day period, 
plus 90 days.’’; and
261
(2) by adding at the end the following: 
‘‘An otherwise applicable time period specified in 
this paragraph shall be suspended for any period 
during which a governmental unit is prohibited 
under applicable nonbankruptcy law from collecting 
a tax as a result of a request by the debtor for a 
hearing and an appeal of any collection action taken 
or proposed against the debtor, plus 90 days; plus 
any time during which the stay of proceedings was 
in effect in a prior case under this title or during 
which collection was precluded by the existence of 1 
or more confirmed plans under this title, plus 90 
days.’’. 
SEC. 706. PRIORITY PROPERTY TAXES INCURRED. 
Section 507(a)(8)(B) of title 11, United States Code, 
is amended by striking ‘‘assessed’’ and inserting ‘‘in-
curred’’. 
SEC. 707. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP-
TER 13. 
Section 1328(a)(2) of title 11, United States Code, 
as amended by section 314, is amended by striking ‘‘para-
graph’’ and inserting ‘‘section 507(a)(8)(C) or in para-
graph (1)(B), (1)(C),’’.
262
SEC. 708. NO DISCHARGE OF FRAUDULENT TAXES IN CHAP-
TER 11. 
Section 1141(d) of title 11, United States Code, as 
amended by section 321, is amended by adding at the end 
the following: 
‘‘(6) Notwithstanding paragraph (1), the confirma-
tion of a plan does not discharge a debtor that is a cor-
poration from any debt—
‘‘(A) of a kind specified in paragraph (2)(A) or 
(2)(B) of section 523(a) that is owed to a domestic 
governmental unit, or owed to a person as the result 
of an action filed under subchapter III of chapter 37 
of title 31 or any similar State statute; or 
‘‘(B) for a tax or customs duty with respect to 
which the debtor—
‘‘(i) made a fraudulent return; or 
‘‘(ii) willfully attempted in any manner to 
evade or to defeat such tax or such customs 
duty.’’. 
SEC. 
709. 
STAY 
OF 
TAX 
PROCEEDINGS 
LIMITED 
TO 
PREPETITION TAXES. 
Section 362(a)(8) of title 11, United States Code, is 
amended by striking ‘‘the debtor’’ and inserting ‘‘a cor-
porate debtor’s tax liability for a taxable period the bank-
ruptcy court may determine or concerning the tax liability
263
of a debtor who is an individual for a taxable period end-
ing before the order for relief under this title’’. 
SEC. 710. PERIODIC PAYMENT OF TAXES IN CHAPTER 11 
CASES. 
Section 1129(a)(9) of title 11, United States Code, 
is amended—
(1) in subparagraph (B), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (C), by striking ‘‘deferred 
cash payments,’’ and all that follows through the 
end of the subparagraph, and inserting ‘‘regular in-
stallment payments in cash—
‘‘(i) of a total value, as of the effective 
date of the plan, equal to the allowed 
amount of such claim; 
‘‘(ii) over a period ending not later 
than 5 years after the date of the entry of 
the order for relief under section 301, 302, 
or 303; and 
‘‘(iii) in a manner not less favorable 
than the most favored nonpriority unse-
cured claim provided for by the plan (other 
than cash payments made to a class of 
creditors under section 1122(b)); and’’; 
and
264
(3) by adding at the end the following: 
‘‘(D) with respect to a secured claim which 
would otherwise meet the description of an un-
secured claim of a governmental unit under sec-
tion 507(a)(8), but for the secured status of 
that claim, the holder of that claim will receive 
on account of that claim, cash payments, in the 
same manner and over the same period, as pre-
scribed in subparagraph (C).’’. 
SEC. 711. AVOIDANCE OF STATUTORY TAX LIENS PROHIB-
ITED. 
Section 545(2) of title 11, United States Code, is 
amended by inserting before the semicolon at the end the 
following: ‘‘, except in any case in which a purchaser is 
a purchaser described in section 6323 of the Internal Rev-
enue Code of 1986, or in any other similar provision of 
State or local law’’. 
SEC. 712. PAYMENT OF TAXES IN THE CONDUCT OF BUSI-
NESS. 
(a) PAYMENT OF TAXES REQUIRED.—Section 960 of 
title 28, United States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘Any’’; and 
(2) by adding at the end the following:
265
‘‘(b) A tax under subsection (a) shall be paid on or 
before the due date of the tax under applicable nonbank-
ruptcy law, unless—
‘‘(1) the tax is a property tax secured by a lien 
against property that is abandoned within a reason-
able period of time after the lien attaches by the 
trustee of a bankruptcy estate under section 554 of 
title 11; or 
‘‘(2) payment of the tax is excused under a spe-
cific provision of title 11. 
‘‘(c) In a case pending under chapter 7 of title 11, 
payment of a tax may be deferred until final distribution 
is made under section 726 of title 11, if—
‘‘(1) the tax was not incurred by a trustee duly 
appointed under chapter 7 of title 11; or 
‘‘(2) before the due date of the tax, an order of 
the court makes a finding of probable insufficiency 
of funds of the estate to pay in full the administra-
tive expenses allowed under section 503(b) of title 
11 that have the same priority in distribution under 
section 726(b) of title 11 as the priority of that 
tax.’’. 
(b) PAYMENT OF AD VALOREM TAXES REQUIRED.—
Section 503(b)(1)(B)(i) of title 11, United States Code, 
is amended by inserting ‘‘whether secured or unsecured,
266
including property taxes for which liability is in rem, in 
personam, or both,’’ before ‘‘except’’. 
(c) REQUEST FOR PAYMENT OF ADMINISTRATIVE 
EXPENSE TAXES ELIMINATED.—Section 503(b)(1) of 
title 11, United States Code, is amended— 
(1) in subparagraph (B), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (C), by adding ‘‘and’’ at 
the end; and 
(3) by adding at the end the following: 
‘‘(D) notwithstanding the requirements of sub-
section (a), a governmental unit shall not be re-
quired to file a request for the payment of an ex-
pense described in subparagraph (B) or (C), as a 
condition of its being an allowed administrative ex-
pense;’’. 
(d) PAYMENT OF TAXES AND FEES AS SECURED 
CLAIMS.—Section 506 of title 11, United States Code, is 
amended—
(1) in subsection (b), by inserting ‘‘or State 
statute’’ after ‘‘agreement’’; and 
(2) in subsection (c), by inserting ‘‘, including 
the payment of all ad valorem property taxes with 
respect to the property’’ before the period at the 
end.
267
SEC. 713. TARDILY FILED PRIORITY TAX CLAIMS. 
Section 726(a)(1) of title 11, United States Code, is 
amended by striking ‘‘before the date on which the trustee 
commences distribution under this section;’’ and inserting 
the following: ‘‘on or before the earlier of—
‘‘(A) the date that is 10 days after the 
mailing to creditors of the summary of the 
trustee’s final report; or 
‘‘(B) the date on which the trustee com-
mences final distribution under this section;’’. 
SEC. 714. INCOME TAX RETURNS PREPARED BY TAX AU-
THORITIES. 
Section 523(a) of title 11, United States Code, as 
amended by sections 215 and 224, is amended—
(1) in paragraph (1)(B)—
(A) in the matter preceding clause (i), by 
inserting ‘‘or equivalent report or notice,’’ after 
‘‘a return,’’; 
(B) in clause (i), by inserting ‘‘or given’’ 
after ‘‘filed’’; and 
(C) in clause (ii)—
(i) by inserting ‘‘or given’’ after 
‘‘filed’’; and 
(ii) by inserting ‘‘, report, or notice’’ 
after ‘‘return’’; and 
(2) by adding at the end the following:
268
‘‘For purposes of this subsection, the term ‘return’ means 
a return that satisfies the requirements of applicable non-
bankruptcy law (including applicable filing requirements). 
Such term includes a return prepared pursuant to section 
6020(a) of the Internal Revenue Code of 1986, or similar 
State or local law, or a written stipulation to a judgment 
or a final order entered by a nonbankruptcy tribunal, but 
does not include a return made pursuant to section 
6020(b) of the Internal Revenue Code of 1986, or a simi-
lar State or local law.’’. 
SEC. 715. DISCHARGE OF THE ESTATE’S LIABILITY FOR UN-
PAID TAXES. 
Section 505(b)(2) of title 11, United States Code, as 
amended by section 703, is amended by inserting ‘‘the es-
tate,’’ after ‘‘misrepresentation,’’. 
SEC. 716. REQUIREMENT TO FILE TAX RETURNS TO CON-
FIRM CHAPTER 13 PLANS. 
(a) FILING
OF PREPETITION TAX RETURNS RE-
QUIRED FOR PLAN CONFIRMATION.—Section 1325(a) of 
title 11, United States Code, as amended by sections 102, 
213, and 306, is amended by inserting after paragraph 
(8) the following: 
‘‘(9) the debtor has filed all applicable Federal, 
State, and local tax returns as required by section 
1308.’’.
269
(b) ADDITIONAL TIME PERMITTED FOR FILING TAX 
RETURNS.—
(1) IN GENERAL.—Subchapter I of chapter 13 
of title 11, United States Code, is amended by add-
ing at the end the following: 
‘‘§ 1308. Filing of prepetition tax returns 
‘‘(a) Not later than the day before the date on which 
the meeting of the creditors is first scheduled to be held 
under section 341(a), if the debtor was required to file 
a tax return under applicable nonbankruptcy law, the 
debtor shall file with appropriate tax authorities all tax 
returns for all taxable periods ending during the 4-year 
period ending on the date of the filing of the petition. 
‘‘(b)(1) Subject to paragraph (2), if the tax returns 
required by subsection (a) have not been filed by the date 
on which the meeting of creditors is first scheduled to be 
held under section 341(a), the trustee may hold open that 
meeting for a reasonable period of time to allow the debtor 
an additional period of time to file any unfiled returns, 
but such additional period of time shall not extend be-
yond—
‘‘(A) for any return that is past due as of the 
date of the filing of the petition, the date that is 120 
days after the date of that meeting; or
270
‘‘(B) for any return that is not past due as of 
the date of the filing of the petition, the later of—
‘‘(i) the date that is 120 days after the 
date of that meeting; or 
‘‘(ii) the date on which the return is due 
under the last automatic extension of time for 
filing that return to which the debtor is enti-
tled, and for which request is timely made, in 
accordance with applicable nonbankruptcy law. 
‘‘(2) After notice and a hearing, and order entered 
before the tolling of any applicable filing period deter-
mined under this subsection, if the debtor demonstrates 
by a preponderance of the evidence that the failure to file 
a return as required under this subsection is attributable 
to circumstances beyond the control of the debtor, the 
court may extend the filing period established by the trust-
ee under this subsection for—
‘‘(A) a period of not more than 30 days for re-
turns described in paragraph (1); and 
‘‘(B) a period not to extend after the applicable 
extended due date for a return described in para-
graph (2). 
‘‘(c) For purposes of this section, the term ‘return’ 
includes a return prepared pursuant to subsection (a) or 
(b) of section 6020 of the Internal Revenue Code of 1986,
271
or a similar State or local law, or a written stipulation 
to a judgment or a final order entered by a nonbankruptcy 
tribunal.’’. 
(2) CONFORMING AMENDMENT.—The table of 
sections for subchapter I of chapter 13 of title 11, 
United States Code, is amended by adding at the 
end the following:
‘‘1308. Filing of prepetition tax returns.’’.
(c) DISMISSAL
OR CONVERSION
ON FAILURE TO 
COMPLY.—Section 1307 of title 11, United States Code, 
is amended—
(1) by redesignating subsections (e) and (f) as 
subsections (f) and (g), respectively; and 
(2) by inserting after subsection (d) the fol-
lowing: 
‘‘(e) Upon the failure of the debtor to file a tax return 
under section 1308, on request of a party in interest or 
the United States trustee and after notice and a hearing, 
the court shall dismiss a case or convert a case under this 
chapter to a case under chapter 7 of this title, whichever 
is in the best interest of the creditors and the estate.’’. 
(d) TIMELY FILED CLAIMS.—Section 502(b)(9) of 
title 11, United States Code, is amended by inserting be-
fore the period at the end the following: ‘‘, and except that 
in a case under chapter 13, a claim of a governmental 
unit for a tax with respect to a return filed under section
272
1308 shall be timely if the claim is filed on or before the 
date that is 60 days after the date on which such return 
was filed as required’’. 
(e) RULES FOR OBJECTIONS TO CLAIMS AND TO 
CONFIRMATION.—It is the sense of Congress that the Ad-
visory Committee on Bankruptcy Rules of the Judicial 
Conference of the United States should, as soon as prac-
ticable after the date of enactment of this Act, propose 
for adoption amended Federal Rules of Bankruptcy Proce-
dure which provide that—
(1) notwithstanding the provisions of Rule 
3015(f), in cases under chapter 13 of title 11, 
United States Code, an objection to the confirmation 
of a plan filed by a governmental unit on or before 
the date that is 60 days after the date on which the 
debtor files all tax returns required under sections 
1308 and 1325(a)(7) of title 11, United States 
Code, shall be treated for all purposes as if such ob-
jection had been timely filed before such confirma-
tion; and 
(2) in addition to the provisions of Rule 3007, 
in a case under chapter 13 of title 11, United States 
Code, no objection to a claim for a tax with respect 
to which a return is required to be filed under sec-
274
ruptcy law because of a pending action to determine 
the amount or legality of a tax liability, the govern-
mental unit may hold the refund pending the resolu-
tion of the action, unless the court, on the motion 
of the trustee and after notice and a hearing, grants 
the taxing authority adequate protection (within the 
meaning of section 361) for the secured claim of 
that authority in the setoff under section 506(a);’’. 
SEC. 719. SPECIAL PROVISIONS RELATED TO THE TREAT-
MENT OF STATE AND LOCAL TAXES. 
(a) IN GENERAL.—
(1) SPECIAL PROVISIONS.—Section 346 of title 
11, United States Code, is amended to read as fol-
lows: 
‘‘§ 346. Special provisions related to the treatment of 
State and local taxes 
‘‘(a) Whenever the Internal Revenue Code of 1986 
provides that a separate taxable estate or entity is created 
in a case concerning a debtor under this title, and the in-
come, gain, loss, deductions, and credits of such estate 
shall be taxed to or claimed by the estate, a separate tax-
able estate is also created for purposes of any State and 
local law imposing a tax on or measured by income and 
such income, gain, loss, deductions, and credits shall be 
taxed to or claimed by the estate and may not be taxed
275
to or claimed by the debtor. The preceding sentence shall 
not apply if the case is dismissed. The trustee shall make 
tax returns of income required under any such State or 
local law. 
‘‘(b) Whenever the Internal Revenue Code of 1986 
provides that no separate taxable estate shall be created 
in a case concerning a debtor under this title, and the in-
come, gain, loss, deductions, and credits of an estate shall 
be taxed to or claimed by the debtor, such income, gain, 
loss, deductions, and credits shall be taxed to or claimed 
by the debtor under a State or local law imposing a tax 
on or measured by income and may not be taxed to or 
claimed by the estate. The trustee shall make such tax 
returns of income of corporations and of partnerships as 
are required under any State or local law, but with respect 
to partnerships, shall make said returns only to the extent 
such returns are also required to be made under such 
Code. The estate shall be liable for any tax imposed on 
such corporation or partnership, but not for any tax im-
posed on partners or members. 
‘‘(c) With respect to a partnership or any entity treat-
ed as a partnership under a State or local law imposing 
a tax on or measured by income that is a debtor in a case 
under this title, any gain or loss resulting from a distribu-
tion of property from such partnership, or any distributive
276
share of any income, gain, loss, deduction, or credit of a 
partner or member that is distributed, or considered dis-
tributed, from such partnership, after the commencement 
of the case, is gain, loss, income, deduction, or credit, as 
the case may be, of the partner or member, and if such 
partner or member is a debtor in a case under this title, 
shall be subject to tax in accordance with subsection (a) 
or (b). 
‘‘(d) For purposes of any State or local law imposing 
a tax on or measured by income, the taxable period of 
a debtor in a case under this title shall terminate only 
if and to the extent that the taxable period of such debtor 
terminates under the Internal Revenue Code of 1986. 
‘‘(e) The estate in any case described in subsection 
(a) shall use the same accounting method as the debtor 
used immediately before the commencement of the case, 
if such method of accounting complies with applicable non-
bankruptcy tax law. 
‘‘(f) For purposes of any State or local law imposing 
a tax on or measured by income, a transfer of property 
from the debtor to the estate or from the estate to the 
debtor shall not be treated as a disposition for purposes 
of any provision assigning tax consequences to a disposi-
tion, except to the extent that such transfer is treated as 
a disposition under the Internal Revenue Code of 1986.
277
‘‘(g) Whenever a tax is imposed pursuant to a State 
or local law imposing a tax on or measured by income pur-
suant to subsection (a) or (b), such tax shall be imposed 
at rates generally applicable to the same types of entities 
under such State or local law. 
‘‘(h) The trustee shall withhold from any payment of 
claims for wages, salaries, commissions, dividends, inter-
est, or other payments, or collect, any amount required 
to be withheld or collected under applicable State or local 
tax law, and shall pay such withheld or collected amount 
to the appropriate governmental unit at the time and in 
the manner required by such tax law, and with the same 
priority as the claim from which such amount was with-
held or collected was paid. 
‘‘(i)(1) To the extent that any State or local law im-
posing a tax on or measured by income provides for the 
carryover of any tax attribute from one taxable period to 
a subsequent taxable period, the estate shall succeed to 
such tax attribute in any case in which such estate is sub-
ject to tax under subsection (a). 
‘‘(2) After such a case is closed or dismissed, the 
debtor shall succeed to any tax attribute to which the es-
tate succeeded under paragraph (1) to the extent con-
sistent with the Internal Revenue Code of 1986.
278
‘‘(3) The estate may carry back any loss or tax at-
tribute to a taxable period of the debtor that ended before 
the order for relief under this title to the extent that— 
‘‘(A) applicable State or local tax law provides 
for a carryback in the case of the debtor; and 
‘‘(B) the same or a similar tax attribute may be 
carried back by the estate to such a taxable period 
of the debtor under the Internal Revenue Code of 
1986. 
‘‘(j)(1) For purposes of any State or local law impos-
ing a tax on or measured by income, income is not realized 
by the estate, the debtor, or a successor to the debtor by 
reason of discharge of indebtedness in a case under this 
title, except to the extent, if any, that such income is sub-
ject to tax under the Internal Revenue Code of 1986. 
‘‘(2) Whenever the Internal Revenue Code of 1986 
provides that the amount excluded from gross income in 
respect of the discharge of indebtedness in a case under 
this title shall be applied to reduce the tax attributes of 
the debtor or the estate, a similar reduction shall be made 
under any State or local law imposing a tax on or meas-
ured by income to the extent such State or local law recog-
nizes such attributes. Such State or local law may also 
provide for the reduction of other attributes to the extent
279
that the full amount of income from the discharge of in-
debtedness has not been applied. 
‘‘(k)(1) Except as provided in this section and section 
505, the time and manner of filing tax returns and the 
items of income, gain, loss, deduction, and credit of any 
taxpayer shall be determined under applicable nonbank-
ruptcy law. 
‘‘(2) For Federal tax purposes, the provisions of this 
section are subject to the Internal Revenue Code of 1986 
and other applicable Federal nonbankruptcy law.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for chapter 3 of title 11, United States Code, 
is amended by striking the item relating to section 
346 and inserting the following:
‘‘346. Special provisions related to the treatment of State and local taxes.’’.
(b) CONFORMING AMENDMENTS.—Title 11 of the 
United States Code is amended—
(1) by striking section 728; 
(2) in the table of sections for chapter 7 by 
striking the item relating to section 728; 
(3) in section 1146—
(A) by striking subsections (a) and (b); 
and 
(B) by redesignating subsections (c) and 
(d) as subsections (a) and (b), respectively; and 
(4) in section 1231—
280
(A) by striking subsections (a) and (b); 
and 
(B) by redesignating subsections (c) and 
(d) as subsections (a) and (b), respectively. 
SEC. 720. DISMISSAL FOR FAILURE TO TIMELY FILE TAX 
RETURNS. 
Section 521 of title 11, United States Code, as 
amended by sections 106, 225, 305, 315, and 316, is 
amended by adding at the end the following: 
‘‘(k)(1) Notwithstanding any other provision of this 
title, if the debtor fails to file a tax return that becomes 
due after the commencement of the case or to properly 
obtain an extension of the due date for filing such return, 
the taxing authority may request that the court enter an 
order converting or dismissing the case. 
‘‘(2) If the debtor does not file the required return 
or obtain the extension referred to in paragraph (1) within 
90 days after a request is filed by the taxing authority 
under that paragraph, the court shall convert or dismiss 
the case, whichever is in the best interests of creditors and 
the estate.’’.
281
TITLE VIII—ANCILLARY AND 
OTHER CROSS-BORDER CASES 
SEC. 801. AMENDMENT TO ADD CHAPTER 15 TO TITLE 11, 
UNITED STATES CODE. 
(a) IN GENERAL.—Title 11, United States Code, is 
amended by inserting after chapter 13 the following: 
‘‘CHAPTER 15—ANCILLARY AND OTHER 
CROSS-BORDER CASES
‘‘Sec. 
‘‘1501. Purpose and scope of application. 
‘‘SUBCHAPTER I—GENERAL PROVISIONS 
‘‘1502. Definitions. 
‘‘1503. International obligations of the United States. 
‘‘1504. Commencement of ancillary case. 
‘‘1505. Authorization to act in a foreign country. 
‘‘1506. Public policy exception. 
‘‘1507. Additional assistance. 
‘‘1508. Interpretation. 
‘‘SUBCHAPTER II—ACCESS OF FOREIGN REPRESENTATIVES AND 
CREDITORS TO THE COURT 
‘‘1509. Right of direct access. 
‘‘1510. Limited jurisdiction. 
‘‘1511. Commencement of case under section 301 or 303. 
‘‘1512. Participation of a foreign representative in a case under this title. 
‘‘1513. Access of foreign creditors to a case under this title. 
‘‘1514. Notification to foreign creditors concerning a case under this title. 
‘‘SUBCHAPTER III—RECOGNITION OF A FOREIGN PROCEEDING 
AND RELIEF 
‘‘1515. Application for recognition. 
‘‘1516. Presumptions concerning recognition. 
‘‘1517. Order granting recognition. 
‘‘1518. Subsequent information. 
‘‘1519. Relief that may be granted upon filing petition for recognition. 
‘‘1520. Effects of recognition of a foreign main proceeding. 
‘‘1521. Relief that may be granted upon recognition. 
‘‘1522. Protection of creditors and other interested persons. 
‘‘1523. Actions to avoid acts detrimental to creditors. 
‘‘1524. Intervention by a foreign representative. 
‘‘SUBCHAPTER IV—COOPERATION WITH FOREIGN COURTS AND 
FOREIGN REPRESENTATIVES
282
‘‘1525. Cooperation and direct communication between the court and foreign 
courts or foreign representatives. 
‘‘1526. Cooperation and direct communication between the trustee and foreign 
courts or foreign representatives. 
‘‘1527. Forms of cooperation. 
‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS 
‘‘1528. Commencement of a case under this title after recognition of a foreign 
main proceeding. 
‘‘1529. Coordination of a case under this title and a foreign proceeding. 
‘‘1530. Coordination of more than 1 foreign proceeding. 
‘‘1531. Presumption of insolvency based on recognition of a foreign main pro-
ceeding. 
‘‘1532. Rule of payment in concurrent proceedings.
‘‘§ 1501. Purpose and scope of application 
‘‘(a) The purpose of this chapter is to incorporate the 
Model Law on Cross-Border Insolvency so as to provide 
effective mechanisms for dealing with cases of cross-bor-
der insolvency with the objectives of—
‘‘(1) cooperation between—
‘‘(A) courts of the United States, United 
States trustees, trustees, examiners, debtors, 
and debtors in possession; and 
‘‘(B) the courts and other competent au-
thorities of foreign countries involved in cross-
border insolvency cases; 
‘‘(2) greater legal certainty for trade and in-
vestment; 
‘‘(3) fair and efficient administration of cross-
border insolvencies that protects the interests of all 
creditors, and other interested entities, including the 
debtor;
283
‘‘(4) protection and maximization of the value 
of the debtor’s assets; and 
‘‘(5) facilitation of the rescue of financially 
troubled businesses, thereby protecting investment 
and preserving employment. 
‘‘(b) This chapter applies where—
‘‘(1) assistance is sought in the United States 
by a foreign court or a foreign representative in con-
nection with a foreign proceeding; 
‘‘(2) assistance is sought in a foreign country in 
connection with a case under this title; 
‘‘(3) a foreign proceeding and a case under this 
title with respect to the same debtor are taking place 
concurrently; or 
‘‘(4) creditors or other interested persons in a 
foreign country have an interest in requesting the 
commencement of, or participating in, a case or pro-
ceeding under this title. 
‘‘(c) This chapter does not apply to—
‘‘(1) a proceeding concerning an entity, other 
than a foreign insurance company, identified by ex-
clusion in section 109(b); 
‘‘(2) an individual, or to an individual and such 
individual’s spouse, who have debts within the limits 
specified in section 109(e) and who are citizens of
284
the United States or aliens lawfully admitted for 
permanent residence in the United States; or 
‘‘(3) an entity subject to a proceeding under the 
Securities Investor Protection Act of 1970, a stock-
broker subject to subchapter III of chapter 7 of this 
title, or a commodity broker subject to subchapter 
IV of chapter 7 of this title. 
‘‘(d) The court may not grant relief under this chap-
ter with respect to any deposit, escrow, trust fund, or 
other security required or permitted under any applicable 
State insurance law or regulation for the benefit of claim 
holders in the United States. 
‘‘SUBCHAPTER I—GENERAL PROVISIONS 
‘‘§ 1502. Definitions 
‘‘For the purposes of this chapter, the term—
‘‘(1) ‘debtor’ means an entity that is the subject 
of a foreign proceeding; 
‘‘(2) ‘establishment’ means any place of oper-
ations where the debtor carries out a nontransitory 
economic activity; 
‘‘(3) ‘foreign court’ means a judicial or other 
authority competent to control or supervise a foreign 
proceeding;
285
‘‘(4) ‘foreign main proceeding’ means a foreign 
proceeding taking place in the country where the 
debtor has the center of its main interests; 
‘‘(5) ‘foreign nonmain proceeding’ means a for-
eign proceeding, other than a foreign main pro-
ceeding, taking place in a country where the debtor 
has an establishment; 
‘‘(6) ‘trustee’ includes a trustee, a debtor in 
possession in a case under any chapter of this title, 
or a debtor under chapter 9 of this title; 
‘‘(7) ‘recognition’ means the entry of an order 
granting recognition of a foreign main proceeding or 
foreign nonmain proceeding under this chapter; and 
‘‘(8) ‘within the territorial jurisdiction of the 
United States’, when used with reference to property 
of a debtor, refers to tangible property located with-
in the territory of the United States and intangible 
property deemed under applicable nonbankruptcy 
law to be located within that territory, including any 
property subject to attachment or garnishment that 
may properly be seized or garnished by an action in 
a Federal or State court in the United States. 
‘‘§ 1503. International obligations of the United States 
‘‘To the extent that this chapter conflicts with an ob-
ligation of the United States arising out of any treaty or
286
other form of agreement to which it is a party with one 
or more other countries, the requirements of the treaty 
or agreement prevail. 
‘‘§ 1504. Commencement of ancillary case 
‘‘A case under this chapter is commenced by the filing 
of a petition for recognition of a foreign proceeding under 
section 1515. 
‘‘§ 1505. Authorization to act in a foreign country 
‘‘A trustee or another entity (including an examiner) 
may be authorized by the court to act in a foreign country 
on behalf of an estate created under section 541. An entity 
authorized to act under this section may act in any way 
permitted by the applicable foreign law. 
‘‘§ 1506. Public policy exception 
‘‘Nothing in this chapter prevents the court from re-
fusing to take an action governed by this chapter if the 
action would be manifestly contrary to the public policy 
of the United States. 
‘‘§ 1507. Additional assistance 
‘‘(a) Subject to the specific limitations stated else-
where in this chapter the court, if recognition is granted, 
may provide additional assistance to a foreign representa-
tive under this title or under other laws of the United 
States.
287
‘‘(b) In determining whether to provide additional as-
sistance under this title or under other laws of the United 
States, the court shall consider whether such additional 
assistance, consistent with the principles of comity, will 
reasonably assure—
‘‘(1) just treatment of all holders of claims 
against or interests in the debtor’s property; 
‘‘(2) protection of claim holders in the United 
States against prejudice and inconvenience in the 
processing of claims in such foreign proceeding; 
‘‘(3) prevention of preferential or fraudulent 
dispositions of property of the debtor; 
‘‘(4) distribution of proceeds of the debtor’s 
property substantially in accordance with the order 
prescribed by this title; and 
‘‘(5) if appropriate, the provision of an oppor-
tunity for a fresh start for the individual that such 
foreign proceeding concerns. 
‘‘§ 1508. Interpretation 
‘‘In interpreting this chapter, the court shall consider 
its international origin, and the need to promote an appli-
cation of this chapter that is consistent with the applica-
tion of similar statutes adopted by foreign jurisdictions.
288
‘‘SUBCHAPTER II—ACCESS OF FOREIGN REP-
RESENTATIVES AND CREDITORS TO THE 
COURT 
‘‘§ 1509. Right of direct access 
‘‘(a) A foreign representative may commence a case 
under section 1504 by filing directly with the court a peti-
tion for recognition of a foreign proceeding under section 
1515. 
‘‘(b) If the court grants recognition under section 
1515, and subject to any limitations that the court may 
impose consistent with the policy of this chapter—
‘‘(1) the foreign representative has the capacity 
to sue and be sued in a court in the United States; 
‘‘(2) the foreign representative may apply di-
rectly to a court in the United States for appropriate 
relief in that court; and 
‘‘(3) a court in the United States shall grant 
comity or cooperation to the foreign representative. 
‘‘(c) A request for comity or cooperation by a foreign 
representative in a court in the United States other than 
the court which granted recognition shall be accompanied 
by a certified copy of an order granting recognition under 
section 1517. 
‘‘(d) If the court denies recognition under this chap-
ter, the court may issue any appropriate order necessary
289
to prevent the foreign representative from obtaining com-
ity or cooperation from courts in the United States. 
‘‘(e) Whether or not the court grants recognition, and 
subject to sections 306 and 1510, a foreign representative 
is subject to applicable nonbankruptcy law. 
‘‘(f) Notwithstanding any other provision of this sec-
tion, the failure of a foreign representative to commence 
a case or to obtain recognition under this chapter does 
not affect any right the foreign representative may have 
to sue in a court in the United States to collect or recover 
a claim which is the property of the debtor. 
‘‘§ 1510. Limited jurisdiction 
‘‘The sole fact that a foreign representative files a 
petition under section 1515 does not subject the foreign 
representative to the jurisdiction of any court in the 
United States for any other purpose. 
‘‘§ 1511. Commencement of case under section 301 or 
303
‘‘(a) Upon recognition, a foreign representative may 
commence—
‘‘(1) an involuntary case under section 303; or 
‘‘(2) a voluntary case under section 301 or 302, 
if the foreign proceeding is a foreign main pro-
ceeding.
290
‘‘(b) The petition commencing a case under sub-
section (a) must be accompanied by a certified copy of 
an order granting recognition. The court where the peti-
tion for recognition has been filed must be advised of the 
foreign representative’s intent to commence a case under 
subsection (a) prior to such commencement. 
‘‘§ 1512. Participation of a foreign representative in a 
case under this title 
‘‘Upon recognition of a foreign proceeding, the for-
eign representative in the recognized proceeding is entitled 
to participate as a party in interest in a case regarding 
the debtor under this title. 
‘‘§ 1513. Access of foreign creditors to a case under 
this title 
‘‘(a) Foreign creditors have the same rights regarding 
the commencement of, and participation in, a case under 
this title as domestic creditors. 
‘‘(b)(1) Subsection (a) does not change or codify 
present law as to the priority of claims under section 507 
or 726 of this title, except that the claim of a foreign cred-
itor under those sections shall not be given a lower priority 
than that of general unsecured claims without priority 
solely because the holder of such claim is a foreign cred-
itor.
291
‘‘(2)(A) Subsection (a) and paragraph (1) do not 
change or codify present law as to the allowability of for-
eign revenue claims or other foreign public law claims in 
a proceeding under this title. 
‘‘(B) Allowance and priority as to a foreign tax claim 
or other foreign public law claim shall be governed by any 
applicable tax treaty of the United States, under the con-
ditions and circumstances specified therein. 
‘‘§ 1514. Notification to foreign creditors concerning a 
case under this title 
‘‘(a) Whenever in a case under this title notice is to 
be given to creditors generally or to any class or category 
of creditors, such notice shall also be given to the known 
creditors generally, or to creditors in the notified class or 
category, that do not have addresses in the United States. 
The court may order that appropriate steps be taken with 
a view to notifying any creditor whose address is not yet 
known. 
‘‘(b) Such notification to creditors with foreign ad-
dresses described in subsection (a) shall be given individ-
ually, unless the court considers that, under the cir-
cumstances, some other form of notification would be 
more appropriate. No letter or other formality is required. 
‘‘(c) When a notification of commencement of a case 
is to be given to foreign creditors, the notification shall—
292
‘‘(1) indicate the time period for filing proofs of 
claim and specify the place for their filing; 
‘‘(2) indicate whether secured creditors need to 
file their proofs of claim; and 
‘‘(3) contain any other information required to 
be included in such a notification to creditors under 
this title and the orders of the court. 
‘‘(d) Any rule of procedure or order of the court as 
to notice or the filing of a claim shall provide such addi-
tional time to creditors with foreign addresses as is rea-
sonable under the circumstances. 
‘‘SUBCHAPTER III—RECOGNITION OF A 
FOREIGN PROCEEDING AND RELIEF 
‘‘§ 1515. Application for recognition 
‘‘(a) A foreign representative applies to the court for 
recognition of the foreign proceeding in which the foreign 
representative has been appointed by filing a petition for 
recognition. 
‘‘(b) A petition for recognition shall be accompanied 
by—
‘‘(1) a certified copy of the decision com-
mencing the foreign proceeding and appointing the 
foreign representative;
293
‘‘(2) a certificate from the foreign court affirm-
ing the existence of the foreign proceeding and of 
the appointment of the foreign representative; or 
‘‘(3) in the absence of evidence referred to in 
paragraphs (1) and (2), any other evidence accept-
able to the court of the existence of the foreign pro-
ceeding and of the appointment of the foreign rep-
resentative. 
‘‘(c) A petition for recognition shall also be accom-
panied by a statement identifying all foreign proceedings 
with respect to the debtor that are known to the foreign 
representative. 
‘‘(d) The documents referred to in paragraphs (1) 
and (2) of subsection (b) shall be translated into English. 
The court may require a translation into English of addi-
tional documents. 
‘‘§ 1516. Presumptions concerning recognition 
‘‘(a) If the decision or certificate referred to in section 
1515(b) indicates that the foreign proceeding is a foreign 
proceeding and that the person or body is a foreign rep-
resentative, the court is entitled to so presume. 
‘‘(b) The court is entitled to presume that documents 
submitted in support of the petition for recognition are 
authentic, whether or not they have been legalized.
294
‘‘(c) In the absence of evidence to the contrary, the 
debtor’s registered office, or habitual residence in the case 
of an individual, is presumed to be the center of the debt-
or’s main interests. 
‘‘§ 1517. Order granting recognition 
‘‘(a) Subject to section 1506, after notice and a hear-
ing, an order recognizing a foreign proceeding shall be en-
tered if—
‘‘(1) the foreign proceeding for which recogni-
tion is sought is a foreign main proceeding or for-
eign nonmain proceeding within the meaning of sec-
tion 1502; 
‘‘(2) the foreign representative applying for rec-
ognition is a person or body; and 
‘‘(3) the petition meets the requirements of sec-
tion 1515. 
‘‘(b) The foreign proceeding shall be recognized—
‘‘(1) as a foreign main proceeding if it is taking 
place in the country where the debtor has the center 
of its main interests; or 
‘‘(2) as a foreign nonmain proceeding if the 
debtor has an establishment within the meaning of 
section 1502 in the foreign country where the pro-
ceeding is pending.
295
‘‘(c) A petition for recognition of a foreign proceeding 
shall be decided upon at the earliest possible time. Entry 
of an order recognizing a foreign proceeding constitutes 
recognition under this chapter. 
‘‘(d) The provisions of this subchapter do not prevent 
modification or termination of recognition if it is shown 
that the grounds for granting it were fully or partially 
lacking or have ceased to exist, but in considering such 
action the court shall give due weight to possible prejudice 
to parties that have relied upon the order granting rec-
ognition. The case under this chapter may be closed in 
the manner prescribed under section 350. 
‘‘§ 1518. Subsequent information 
‘‘From the time of filing the petition for recognition 
of the foreign proceeding, the foreign representative shall 
file with the court promptly a notice of change of status 
concerning—
‘‘(1) any substantial change in the status of the 
foreign proceeding or the status of the foreign rep-
resentative’s appointment; and 
‘‘(2) any other foreign proceeding regarding the 
debtor that becomes known to the foreign represent-
ative.
296
‘‘§ 1519. Relief that may be granted upon filing peti-
tion for recognition 
‘‘(a) From the time of filing a petition for recognition 
until the court rules on the petition, the court may, at 
the request of the foreign representative, where relief is 
urgently needed to protect the assets of the debtor or the 
interests of the creditors, grant relief of a provisional na-
ture, including—
‘‘(1) staying execution against the debtor’s as-
sets; 
‘‘(2) entrusting the administration or realiza-
tion of all or part of the debtor’s assets located in 
the United States to the foreign representative or 
another person authorized by the court, including an 
examiner, in order to protect and preserve the value 
of assets that, by their nature or because of other 
circumstances, are perishable, susceptible to devalu-
ation or otherwise in jeopardy; and 
‘‘(3) any relief referred to in paragraph (3), 
(4), or (7) of section 1521(a). 
‘‘(b) Unless extended under section 1521(a)(6), the 
relief granted under this section terminates when the peti-
tion for recognition is granted. 
‘‘(c) It is a ground for denial of relief under this sec-
tion that such relief would interfere with the administra-
tion of a foreign main proceeding.
297
‘‘(d) The court may not enjoin a police or regulatory 
act of a governmental unit, including a criminal action or 
proceeding, under this section. 
‘‘(e) The standards, procedures, and limitations ap-
plicable to an injunction shall apply to relief under this 
section. 
‘‘(f) The exercise of rights not subject to the stay 
arising under section 362(a) pursuant to paragraph (6), 
(7), (17), or (27) of section 362(b) or pursuant to section 
362(n) shall not be stayed by any order of a court or ad-
ministrative agency in any proceeding under this chapter. 
‘‘§ 1520. Effects of recognition of a foreign main pro-
ceeding 
‘‘(a) Upon recognition of a foreign proceeding that 
is a foreign main proceeding—
‘‘(1) sections 361 and 362 apply with respect to 
the debtor and that property of the debtor that is 
within the territorial jurisdiction of the United 
States; 
‘‘(2) sections 363, 549, and 552 of this title 
apply to a transfer of an interest of the debtor in 
property that is within the territorial jurisdiction of 
the United States to the same extent that the sec-
tions would apply to property of an estate;
298
‘‘(3) unless the court orders otherwise, the for-
eign representative may operate the debtor’s busi-
ness and may exercise the rights and powers of a 
trustee under and to the extent provided by sections 
363 and 552; and 
‘‘(4) section 552 applies to property of the debt-
or that is within the territorial jurisdiction of the 
United States. 
‘‘(b) Subsection (a) does not affect the right to com-
mence an individual action or proceeding in a foreign 
country to the extent necessary to preserve a claim against 
the debtor. 
‘‘(c) Subsection (a) does not affect the right of a for-
eign representative or an entity to file a petition com-
mencing a case under this title or the right of any party 
to file claims or take other proper actions in such a case. 
‘‘§ 1521. Relief that may be granted upon recognition 
‘‘(a) Upon recognition of a foreign proceeding, wheth-
er main or nonmain, where necessary to effectuate the 
purpose of this chapter and to protect the assets of the 
debtor or the interests of the creditors, the court may, at 
the request of the foreign representative, grant any appro-
priate relief, including—
‘‘(1) staying the commencement or continuation 
of an individual action or proceeding concerning the
299
debtor’s assets, rights, obligations or liabilities to the 
extent they have not been stayed under section 
1520(a); 
‘‘(2) staying execution against the debtor’s as-
sets to the extent it has not been stayed under sec-
tion 1520(a); 
‘‘(3) suspending the right to transfer, encumber 
or otherwise dispose of any assets of the debtor to 
the extent this right has not been suspended under 
section 1520(a); 
‘‘(4) providing for the examination of witnesses, 
the taking of evidence or the delivery of information 
concerning the debtor’s assets, affairs, rights, obliga-
tions or liabilities; 
‘‘(5) entrusting the administration or realiza-
tion of all or part of the debtor’s assets within the 
territorial jurisdiction of the United States to the 
foreign representative or another person, including 
an examiner, authorized by the court; 
‘‘(6) extending relief granted under section 
1519(a); and 
‘‘(7) granting any additional relief that may be 
available to a trustee, except for relief available 
under sections 522, 544, 545, 547, 548, 550, and 
724(a).
300
‘‘(b) Upon recognition of a foreign proceeding, wheth-
er main or nonmain, the court may, at the request of the 
foreign representative, entrust the distribution of all or 
part of the debtor’s assets located in the United States 
to the foreign representative or another person, including 
an examiner, authorized by the court, provided that the 
court is satisfied that the interests of creditors in the 
United States are sufficiently protected. 
‘‘(c) In granting relief under this section to a rep-
resentative of a foreign nonmain proceeding, the court 
must be satisfied that the relief relates to assets that, 
under the law of the United States, should be adminis-
tered in the foreign nonmain proceeding or concerns infor-
mation required in that proceeding. 
‘‘(d) The court may not enjoin a police or regulatory 
act of a governmental unit, including a criminal action or 
proceeding, under this section. 
‘‘(e) The standards, procedures, and limitations ap-
plicable to an injunction shall apply to relief under para-
graphs (1), (2), (3), and (6) of subsection (a). 
‘‘(f) The exercise of rights not subject to the stay 
arising under section 362(a) pursuant to paragraph (6), 
(7), (17), or (27) of section 362(b) or pursuant to section 
362(n) shall not be stayed by any order of a court or ad-
ministrative agency in any proceeding under this chapter.
301
‘‘§ 1522. Protection of creditors and other interested 
persons 
‘‘(a) The court may grant relief under section 1519 
or 1521, or may modify or terminate relief under sub-
section (c), only if the interests of the creditors and other 
interested entities, including the debtor, are sufficiently 
protected. 
‘‘(b) The court may subject relief granted under sec-
tion 1519 or 1521, or the operation of the debtor’s busi-
ness under section 1520(a)(3) of this title, to conditions 
it considers appropriate, including the giving of security 
or the filing of a bond. 
‘‘(c) The court may, at the request of the foreign rep-
resentative or an entity affected by relief granted under 
section 1519 or 1521, or at its own motion, modify or 
terminate such relief. 
‘‘(d) Section 1104(d) shall apply to the appointment 
of an examiner under this chapter. Any examiner shall 
comply with the qualification requirements imposed on a 
trustee by section 322. 
‘‘§ 1523. Actions to avoid acts detrimental to creditors 
‘‘(a) Upon recognition of a foreign proceeding, the 
foreign representative has standing in a case concerning 
the debtor pending under another chapter of this title to 
initiate actions under sections 522, 544, 545, 547, 548, 
550, 553, and 724(a).
302
‘‘(b) When the foreign proceeding is a foreign 
nonmain proceeding, the court must be satisfied that an 
action under subsection (a) relates to assets that, under 
United States law, should be administered in the foreign 
nonmain proceeding. 
‘‘§ 1524. Intervention by a foreign representative 
‘‘Upon recognition of a foreign proceeding, the for-
eign representative may intervene in any proceedings in 
a State or Federal court in the United States in which 
the debtor is a party. 
‘‘SUBCHAPTER IV—COOPERATION WITH FOR-
EIGN COURTS AND FOREIGN REPRESENTA-
TIVES 
‘‘§ 1525. Cooperation and direct communication be-
tween the court and foreign courts or for-
eign representatives 
‘‘(a) Consistent with section 1501, the court shall co-
operate to the maximum extent possible with foreign 
courts or foreign representatives, either directly or 
through the trustee. 
‘‘(b) The court is entitled to communicate directly 
with, or to request information or assistance directly from, 
foreign courts or foreign representatives, subject to the 
rights of parties in interest to notice and participation.
303
‘‘§ 1526. Cooperation and direct communication be-
tween the trustee and foreign courts or 
foreign representatives 
‘‘(a) Consistent with section 1501, the trustee or 
other person, including an examiner, authorized by the 
court, shall, subject to the supervision of the court, cooper-
ate to the maximum extent possible with foreign courts 
or foreign representatives. 
‘‘(b) The trustee or other person, including an exam-
iner, authorized by the court is entitled, subject to the su-
pervision of the court, to communicate directly with for-
eign courts or foreign representatives. 
‘‘§ 1527. Forms of cooperation 
‘‘Cooperation referred to in sections 1525 and 1526 
may be implemented by any appropriate means, includ-
ing—
‘‘(1) appointment of a person or body, including 
an examiner, to act at the direction of the court; 
‘‘(2) communication of information by any 
means considered appropriate by the court; 
‘‘(3) coordination of the administration and su-
pervision of the debtor’s assets and affairs; 
‘‘(4) approval or implementation of agreements 
concerning the coordination of proceedings; and 
‘‘(5) coordination of concurrent proceedings re-
garding the same debtor.
304
‘‘SUBCHAPTER V—CONCURRENT PROCEEDINGS 
‘‘§ 1528. Commencement of a case under this title 
after recognition of a foreign main pro-
ceeding 
‘‘After recognition of a foreign main proceeding, a 
case under another chapter of this title may be commenced 
only if the debtor has assets in the United States. The 
effects of such case shall be restricted to the assets of the 
debtor that are within the territorial jurisdiction of the 
United States and, to the extent necessary to implement 
cooperation and coordination under sections 1525, 1526, 
and 1527, to other assets of the debtor that are within 
the jurisdiction of the court under sections 541(a) of this 
title, and 1334(e) of title 28, to the extent that such other 
assets are not subject to the jurisdiction and control of 
a foreign proceeding that has been recognized under this 
chapter. 
‘‘§ 1529. Coordination of a case under this title and a 
foreign proceeding 
‘‘If a foreign proceeding and a case under another 
chapter of this title are taking place concurrently regard-
ing the same debtor, the court shall seek cooperation and 
coordination under sections 1525, 1526, and 1527, and 
the following shall apply:
305
‘‘(1) If the case in the United States is taking 
place at the time the petition for recognition of the 
foreign proceeding is filed—
‘‘(A) any relief granted under section 1519 
or 1521 must be consistent with the relief 
granted in the case in the United States; and 
‘‘(B) even if the foreign proceeding is rec-
ognized as a foreign main proceeding, section 
1520 does not apply. 
‘‘(2) If a case in the United States under this 
title commences after recognition, or after the filing 
of the petition for recognition, of the foreign pro-
ceeding—
‘‘(A) any relief in effect under section 
1519 or 1521 shall be reviewed by the court 
and shall be modified or terminated if incon-
sistent with the case in the United States; and 
‘‘(B) if the foreign proceeding is a foreign 
main proceeding, the stay and suspension re-
ferred to in section 1520(a) shall be modified or 
terminated if inconsistent with the relief grant-
ed in the case in the United States. 
‘‘(3) In granting, extending, or modifying relief 
granted to a representative of a foreign nonmain 
proceeding, the court must be satisfied that the re-
306
lief relates to assets that, under the laws of the 
United States, should be administered in the foreign 
nonmain proceeding or concerns information re-
quired in that proceeding. 
‘‘(4) In achieving cooperation and coordination 
under sections 1528 and 1529, the court may grant 
any of the relief authorized under section 305. 
‘‘§ 1530. Coordination of more than 1 foreign pro-
ceeding 
‘‘In matters referred to in section 1501, with respect 
to more than 1 foreign proceeding regarding the debtor, 
the court shall seek cooperation and coordination under 
sections 1525, 1526, and 1527, and the following shall 
apply: 
‘‘(1) Any relief granted under section 1519 or 
1521 to a representative of a foreign nonmain pro-
ceeding after recognition of a foreign main pro-
ceeding must be consistent with the foreign main 
proceeding. 
‘‘(2) If a foreign main proceeding is recognized 
after recognition, or after the filing of a petition for 
recognition, of a foreign nonmain proceeding, any 
relief in effect under section 1519 or 1521 shall be 
reviewed by the court and shall be modified or termi-
307
nated if inconsistent with the foreign main pro-
ceeding. 
‘‘(3) If, after recognition of a foreign nonmain 
proceeding, another foreign nonmain proceeding is 
recognized, the court shall grant, modify, or termi-
nate relief for the purpose of facilitating coordina-
tion of the proceedings. 
‘‘§ 1531. Presumption of insolvency based on recogni-
tion of a foreign main proceeding 
‘‘In the absence of evidence to the contrary, recogni-
tion of a foreign main proceeding is, for the purpose of 
commencing a proceeding under section 303, proof that 
the debtor is generally not paying its debts as such debts 
become due. 
‘‘§ 1532. Rule of payment in concurrent proceedings 
‘‘Without prejudice to secured claims or rights in 
rem, a creditor who has received payment with respect to 
its claim in a foreign proceeding pursuant to a law relating 
to insolvency may not receive a payment for the same 
claim in a case under any other chapter of this title re-
garding the debtor, so long as the payment to other credi-
tors of the same class is proportionately less than the pay-
ment the creditor has already received.’’.
308
(b) CLERICAL AMENDMENT.—The table of chapters 
for title 11, United States Code, is amended by inserting 
after the item relating to chapter 13 the following:
‘‘15. Ancillary and Other Cross-Border Cases ........................ 1501’’.
SEC. 802. OTHER AMENDMENTS TO TITLES 11 AND 28, 
UNITED STATES CODE. 
(a) APPLICABILITY OF CHAPTERS.—Section 103 of 
title 11, United States Code, is amended—
(1) in subsection (a), by inserting before the pe-
riod the following: ‘‘, and this chapter, sections 307, 
362(n), 555 through 557, and 559 through 562 
apply in a case under chapter 15’’; and 
(2) by adding at the end the following: 
‘‘(k) Chapter 15 applies only in a case under such 
chapter, except that—
‘‘(1) sections 1505, 1513, and 1514 apply in all 
cases under this title; and 
‘‘(2) section 1509 applies whether or not a case 
under this title is pending.’’. 
(b) DEFINITIONS.—Section 101 of title 11, United 
States Code, is amended by striking paragraphs (23) and 
(24) and inserting the following: 
‘‘(23) ‘foreign proceeding’ means a collective ju-
dicial or administrative proceeding in a foreign coun-
try, including an interim proceeding, under a law re-
lating to insolvency or adjustment of debt in which
309
proceeding the assets and affairs of the debtor are 
subject to control or supervision by a foreign court, 
for the purpose of reorganization or liquidation; 
‘‘(24) ‘foreign representative’ means a person 
or body, including a person or body appointed on an 
interim basis, authorized in a foreign proceeding to 
administer the reorganization or the liquidation of 
the debtor’s assets or affairs or to act as a rep-
resentative of the foreign proceeding;’’. 
(c) AMENDMENTS TO TITLE 28, UNITED STATES 
CODE.—
(1) PROCEDURES.—Section 157(b)(2) of title 
28, United States Code, is amended—
(A) in subparagraph (N), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (O), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(P) recognition of foreign proceedings and 
other matters under chapter 15 of title 11.’’. 
(2) BANKRUPTCY CASES AND PROCEEDINGS.—
Section 1334(c) of title 28, United States Code, is 
amended by striking ‘‘Nothing in’’ and inserting 
‘‘Except with respect to a case under chapter 15 of 
title 11, nothing in’’.
310
(3) DUTIES OF TRUSTEES.—Section 586(a)(3) 
of title 28, United States Code, is amended by strik-
ing ‘‘or 13’’ and inserting ‘‘13, or 15’’. 
(4) VENUE OF CASES ANCILLARY TO FOREIGN 
PROCEEDINGS.—Section 1410 of title 28, United 
States Code, is amended to read as follows: 
‘‘§ 1410. Venue of cases ancillary to foreign pro-
ceedings 
‘‘A case under chapter 15 of title 11 may be com-
menced in the district court of the United States for the 
district—
‘‘(1) in which the debtor has its principal place 
of business or principal assets in the United States; 
‘‘(2) if the debtor does not have a place of busi-
ness or assets in the United States, in which there 
is pending against the debtor an action or pro-
ceeding in a Federal or State court; or 
‘‘(3) in a case other than those specified in 
paragraph (1) or (2), in which venue will be con-
sistent with the interests of justice and the conven-
ience of the parties, having regard to the relief 
sought by the foreign representative.’’. 
(d) OTHER SECTIONS OF TITLE 11.—Title 11 of the 
United States Code is amended—
311
(1) in section 109(b), by striking paragraph (3) 
and inserting the following: 
‘‘(3)(A) a foreign insurance company, engaged 
in such business in the United States; or 
‘‘(B) a foreign bank, savings bank, cooperative 
bank, savings and loan association, building and 
loan association, or credit union, that has a branch 
or agency (as defined in section 1(b) of the Inter-
national Banking Act of 1978 in the United 
States.’’; 
(2) in section 303, by striking subsection (k); 
(3) by striking section 304; 
(4) in the table of sections for chapter 3 by 
striking the item relating to section 304; 
(5) in section 306 by striking ‘‘, 304,’’ each 
place it appears; 
(6) in section 305(a) by striking paragraph (2) 
and inserting the following: 
‘‘(2)(A) a petition under section 1515 of this 
title for recognition of a foreign proceeding has been 
granted; and 
‘‘(B) the purposes of chapter 15 of this title 
would be best served by such dismissal or suspen-
sion.’’; and 
(7) in section 508—
312
(A) by striking subsection (a); and 
(B) in subsection (b), by striking ‘‘(b)’’.
TITLE IX—FINANCIAL 
CONTRACT PROVISIONS 
SEC. 901. TREATMENT OF CERTAIN AGREEMENTS BY CON-
SERVATORS OR RECEIVERS OF INSURED DE-
POSITORY INSTITUTIONS. 
(a) DEFINITION
OF QUALIFIED FINANCIAL CON-
TRACT.—Section 11(e)(8)(D) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(e)(8)(D)) is amended— 
(1) by striking ‘‘subsection—’’ and inserting 
‘‘subsection, the following definitions shall apply:’’; 
and 
(2) in clause (i), by inserting ‘‘, resolution, or 
order’’ after ‘‘any similar agreement that the Cor-
poration determines by regulation’’. 
(b) DEFINITION OF SECURITIES CONTRACT.—Sec-
tion 11(e)(8)(D)(ii) of the Federal Deposit Insurance Act 
(12 U.S.C. 1821(e)(8)(D)(ii)) is amended to read as fol-
lows: 
‘‘(ii) SECURITIES
CONTRACT.—The 
term ‘securities contract’—
‘‘(I) means a contract for the 
purchase, sale, or loan of a security, a 
certificate of deposit, a mortgage loan,
313
or any interest in a mortgage loan, a 
group or index of securities, certifi-
cates of deposit, or mortgage loans or 
interests therein (including any inter-
est therein or based on the value 
thereof) or any option on any of the 
foregoing, including any option to 
purchase or sell any such security, 
certificate of deposit, mortgage loan, 
interest, group or index, or option, 
and including any repurchase or re-
verse repurchase transaction on any 
such security, certificate of deposit, 
mortgage loan, interest, group or 
index, or option; 
‘‘(II) does not include any pur-
chase, sale, or repurchase obligation 
under a participation in a commercial 
mortgage loan unless the Corporation 
determines by regulation, resolution, 
or order to include any such agree-
ment within the meaning of such 
term;
314
‘‘(III) means any option entered 
into on a national securities exchange 
relating to foreign currencies; 
‘‘(IV) means the guarantee by or 
to any securities clearing agency of 
any settlement of cash, securities, cer-
tificates of deposit, mortgage loans or 
interests therein, group or index of se-
curities, certificates of deposit, or 
mortgage loans or interests therein 
(including any interest therein or 
based on the value thereof) or option 
on any of the foregoing, including any 
option to purchase or sell any such se-
curity, certificate of deposit, mortgage 
loan, interest, group or index, or op-
tion; 
‘‘(V) means any margin loan; 
‘‘(VI) means any other agree-
ment or transaction that is similar to 
any agreement or transaction referred 
to in this clause; 
‘‘(VII) means any combination of 
the agreements or transactions re-
ferred to in this clause;
315
‘‘(VIII) means any option to 
enter into any agreement or trans-
action referred to in this clause; 
‘‘(IX) means a master agreement 
that provides for an agreement or 
transaction referred to in subclause 
(I), (III), (IV), (V), (VI), (VII), or 
(VIII), together with all supplements 
to any such master agreement, with-
out regard to whether the master 
agreement provides for an agreement 
or transaction that is not a securities 
contract under this clause, except that 
the master agreement shall be consid-
ered to be a securities contract under 
this clause only with respect to each 
agreement or transaction under the 
master agreement that is referred to 
in subclause (I), (III), (IV), (V), (VI), 
(VII), or (VIII); and
‘‘(X) means any security agree-
ment or arrangement or other credit 
enhancement related to any agree-
ment or transaction referred to in this 
clause, including any guarantee or re-
316
imbursement obligation in connection 
with any agreement or transaction re-
ferred to in this clause.’’. 
(c) DEFINITION OF COMMODITY CONTRACT.—Sec-
tion 11(e)(8)(D)(iii) of the Federal Deposit Insurance Act 
(12 U.S.C. 1821(e)(8)(D)(iii)) is amended to read as fol-
lows: 
‘‘(iii) COMMODITY
CONTRACT.—The 
term ‘commodity contract’ means—
‘‘(I) with respect to a futures 
commission merchant, a contract for 
the purchase or sale of a commodity 
for future delivery on, or subject to 
the rules of, a contract market or 
board of trade; 
‘‘(II) with respect to a foreign fu-
tures commission merchant, a foreign 
future; 
‘‘(III) with respect to a leverage 
transaction 
merchant, 
a 
leverage 
transaction; 
‘‘(IV) with respect to a clearing 
organization, a contract for the pur-
chase or sale of a commodity for fu-
ture delivery on, or subject to the
317
rules of, a contract market or board 
of trade that is cleared by such clear-
ing organization, or commodity option 
traded on, or subject to the rules of, 
a contract market or board of trade 
that is cleared by such clearing orga-
nization; 
‘‘(V) with respect to a commodity 
options dealer, a commodity option; 
‘‘(VI) any other agreement or 
transaction that is similar to any 
agreement or transaction referred to 
in this clause; 
‘‘(VII) any combination of the 
agreements or transactions referred to 
in this clause; 
‘‘(VIII) any option to enter into 
any agreement or transaction referred 
to in this clause; 
‘‘(IX) a master agreement that 
provides for an agreement or trans-
action referred to in subclause (I), 
(II), (III), (IV), (V), (VI), (VII), or 
(VIII), together with all supplements 
to any such master agreement, with-
318
out regard to whether the master 
agreement provides for an agreement 
or transaction that is not a com-
modity contract under this clause, ex-
cept that the master agreement shall 
be considered to be a commodity con-
tract under this clause only with re-
spect to each agreement or trans-
action under the master agreement 
that is referred to in subclause (I), 
(II), (III), (IV), (V), (VI), (VII), or 
(VIII); or 
‘‘(X) any security agreement or 
arrangement or other credit enhance-
ment related to any agreement or 
transaction referred to in this clause, 
including any guarantee or reimburse-
ment obligation in connection with 
any agreement or transaction referred 
to in this clause.’’. 
(d) DEFINITION OF FORWARD CONTRACT.—Section 
11(e)(8)(D)(iv) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(8)(D)(iv)) is amended to read as follows: 
‘‘(iv) 
FORWARD
CONTRACT.—The 
term ‘forward contract’ means—
319
‘‘(I) a contract (other than a 
commodity contract) for the purchase, 
sale, or transfer of a commodity or 
any similar good, article, service, 
right, or interest which is presently or 
in the future becomes the subject of 
dealing in the forward contract trade, 
or product or byproduct thereof, with 
a maturity date more than 2 days 
after the date the contract is entered 
into, including, a repurchase trans-
action, reverse repurchase transaction, 
consignment, 
lease, 
swap, 
hedge 
transaction, deposit, loan, option, allo-
cated transaction, unallocated trans-
action, or any other similar agree-
ment; 
‘‘(II) any combination of agree-
ments or transactions referred to in 
subclauses (I) and (III); 
‘‘(III) any option to enter into 
any agreement or transaction referred 
to in subclause (I) or (II); 
‘‘(IV) a master agreement that 
provides for an agreement or trans-
320
action referred to in subclauses (I), 
(II), or (III), together with all supple-
ments to any such master agreement, 
without regard to whether the master 
agreement provides for an agreement 
or transaction that is not a forward 
contract under this clause, except that 
the master agreement shall be consid-
ered to be a forward contract under 
this clause only with respect to each 
agreement or transaction under the 
master agreement that is referred to 
in subclause (I), (II), or (III); or 
‘‘(V) any security agreement or 
arrangement or other credit enhance-
ment related to any agreement or 
transaction referred to in subclause 
(I), (II), (III), or (IV), including any 
guarantee or reimbursement obliga-
tion in connection with any agreement 
or transaction referred to in any such 
subclause.’’. 
(e) DEFINITION
OF REPURCHASE AGREEMENT.—
Section 11(e)(8)(D)(v) of the Federal Deposit Insurance
321
Act (12 U.S.C. 1821(e)(8)(D)(v)) is amended to read as 
follows: 
‘‘(v) REPURCHASE AGREEMENT.—The 
term ‘repurchase agreement’ (which defini-
tion also applies to a reverse repurchase 
agreement)—
‘‘(I) means an agreement, includ-
ing related terms, which provides for 
the transfer of one or more certifi-
cates of deposit, mortgage-related se-
curities (as such term is defined in 
the Securities Exchange Act of 1934), 
mortgage loans, interests in mortgage-
related securities or mortgage loans, 
eligible bankers’ acceptances, qualified 
foreign government securities or secu-
rities that are direct obligations of, or 
that are fully guaranteed by, the 
United States or any agency of the 
United States against the transfer of 
funds by the transferee of such certifi-
cates of deposit, eligible bankers’ ac-
ceptances, securities, mortgage loans, 
or interests with a simultaneous 
agreement by such transferee to
322
transfer to the transferor thereof cer-
tificates of deposit, eligible bankers’ 
acceptances, 
securities, 
mortgage 
loans, or interests as described above, 
at a date certain not later than 1 year 
after such transfers or on demand, 
against the transfer of funds, or any 
other similar agreement; 
‘‘(II) does not include any repur-
chase obligation under a participation 
in a commercial mortgage loan unless 
the Corporation determines by regula-
tion, resolution, or order to include 
any such participation within the 
meaning of such term;
‘‘(III) means any combination of 
agreements or transactions referred to 
in subclauses (I) and (IV); 
‘‘(IV) means any option to enter 
into any agreement or transaction re-
ferred to in subclause (I) or (III); 
‘‘(V) means a master agreement 
that provides for an agreement or 
transaction referred to in subclause 
(I), (III), or (IV), together with all
323
supplements to any such master 
agreement, without regard to whether 
the master agreement provides for an 
agreement or transaction that is not a 
repurchase 
agreement 
under 
this 
clause, except that the master agree-
ment shall be considered to be a re-
purchase agreement under this sub-
clause only with respect to each agree-
ment or transaction under the master 
agreement that is referred to in sub-
clause (I), (III), or (IV); and 
‘‘(VI) means any security agree-
ment or arrangement or other credit 
enhancement related to any agree-
ment or transaction referred to in 
subclause (I), (III), (IV), or (V), in-
cluding any guarantee or reimburse-
ment obligation in connection with 
any agreement or transaction referred 
to in any such subclause. 
For purposes of this clause, the term 
‘qualified foreign government security’ 
means a security that is a direct obligation 
of, or that is fully guaranteed by, the cen-
324
tral government of a member of the Orga-
nization for Economic Cooperation and 
Development (as determined by regulation 
or order adopted by the appropriate Fed-
eral banking authority).’’. 
(f) DEFINITION
OF SWAP AGREEMENT.—Section 
11(e)(8)(D)(vi) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(8)(D)(vi)) is amended to read as follows: 
‘‘(vi) SWAP AGREEMENT.—The term 
‘swap agreement’ means—
‘‘(I) any agreement, including the 
terms and conditions incorporated by 
reference in any such agreement, 
which is an interest rate swap, option, 
future, or forward agreement, includ-
ing a rate floor, rate cap, rate collar, 
cross-currency rate swap, and basis 
swap; a spot, same day-tomorrow, to-
morrow-next, forward, or other for-
eign exchange or precious metals 
agreement; a currency swap, option, 
future, or forward agreement; an eq-
uity index or equity swap, option, fu-
ture, or forward agreement; a debt 
index or debt swap, option, future, or
325
forward agreement; a total return, 
credit spread or credit swap, option, 
future, or forward agreement; a com-
modity index or commodity swap, op-
tion, future, or forward agreement; or 
a weather swap, weather derivative, or 
weather option; 
‘‘(II) any agreement or trans-
action that is similar to any other 
agreement or transaction referred to 
in this clause and that is of a type 
that has been, is presently, or in the 
future becomes, the subject of recur-
rent dealings in the swap markets (in-
cluding terms and conditions incor-
porated by reference in such agree-
ment) and that is a forward, swap, fu-
ture, or option on one or more rates, 
currencies, commodities, equity securi-
ties or other equity instruments, debt 
securities or other debt instruments, 
quantitative measures associated with 
an occurrence, extent of an occur-
rence, or contingency associated with 
a financial, commercial, or economic
326
consequence, or economic or financial 
indices or measures of economic or fi-
nancial risk or value; 
‘‘(III) any combination of agree-
ments or transactions referred to in 
this clause; 
‘‘(IV) any option to enter into 
any agreement or transaction referred 
to in this clause; 
‘‘(V) a master agreement that 
provides for an agreement or trans-
action referred to in subclause (I), 
(II), (III), or (IV), together with all 
supplements to any such master 
agreement, without regard to whether 
the master agreement contains an 
agreement or transaction that is not a 
swap agreement under this clause, ex-
cept that the master agreement shall 
be considered to be a swap agreement 
under this clause only with respect to 
each agreement or transaction under 
the master agreement that is referred 
to in subclause (I), (II), (III), or (IV); 
and
327
‘‘(VI) any security agreement or 
arrangement or other credit enhance-
ment related to any agreements or 
transactions referred to in subclause 
(I), (II), (III), (IV), or (V), including 
any guarantee or reimbursement obli-
gation in connection with any agree-
ment or transaction referred to in any 
such subclause. 
Such term is applicable for purposes of 
this subsection only and shall not be con-
strued or applied so as to challenge or af-
fect the characterization, definition, or 
treatment of any swap agreement under 
any other statute, regulation, or rule, in-
cluding the Securities Act of 1933, the Se-
curities Exchange Act of 1934, the Public 
Utility Holding Company Act of 1935, the 
Trust Indenture Act of 1939, the Invest-
ment Company Act of 1940, the Invest-
ment Advisers Act of 1940, the Securities 
Investor Protection Act of 1970, the Com-
modity Exchange Act, the Gramm-Leach-
Bliley Act, and the Legal Certainty for 
Bank Products Act of 2000.’’.
328
(g) 
DEFINITION
OF
TRANSFER.—Section 
11(e)(8)(D)(viii) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(8)(D)(viii)) is amended to read as follows: 
‘‘(viii) TRANSFER.—The term ‘trans-
fer’ means every mode, direct or indirect, 
absolute or conditional, voluntary or invol-
untary, of disposing of or parting with 
property or with an interest in property, 
including retention of title as a security in-
terest and foreclosure of the depository in-
stitution’s equity of redemption.’’. 
(h) TREATMENT
OF QUALIFIED FINANCIAL CON-
TRACTS.—Section 11(e)(8) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1821(e)(8)) is amended—
(1) in subparagraph (A)—
(A) by striking ‘‘paragraph (10)’’ and in-
serting ‘‘paragraphs (9) and (10)’’; 
(B) in clause (i), by striking ‘‘to cause the 
termination or liquidation’’ and inserting ‘‘such 
person has to cause the termination, liquida-
tion, or acceleration’’; and 
(C) by striking clause (ii) and inserting the 
following: 
‘‘(ii) any right under any security 
agreement or arrangement or other credit
329
enhancement related to one or more quali-
fied financial contracts described in clause 
(i);’’; and 
(2) in subparagraph (E), by striking clause (ii) 
and inserting the following: 
‘‘(ii) any right under any security 
agreement or arrangement or other credit 
enhancement related to one or more quali-
fied financial contracts described in clause 
(i);’’. 
(i) 
AVOIDANCE
OF
TRANSFERS.—Section 
11(e)(8)(C)(i) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(8)(C)(i)) is amended by inserting ‘‘section 
5242 of the Revised Statutes of the United States or any 
other Federal or State law relating to the avoidance of 
preferential or fraudulent transfers,’’ before ‘‘the Corpora-
tion’’. 
SEC. 902. AUTHORITY OF THE CORPORATION WITH RE-
SPECT TO FAILED AND FAILING INSTITU-
TIONS. 
(a) IN GENERAL.—Section 11(e)(8) of the Federal 
Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is amend-
ed—
(1) in subparagraph (E), by striking ‘‘other 
than paragraph (12) of this subsection, subsection
330
(d)(9)’’ and inserting ‘‘other than subsections (d)(9) 
and (e)(10)’’; and 
(2) by adding at the end the following new sub-
paragraphs: 
‘‘(F) CLARIFICATION.—No provision of law 
shall be construed as limiting the right or 
power of the Corporation, or authorizing any 
court or agency to limit or delay, in any man-
ner, the right or power of the Corporation to 
transfer any qualified financial contract in ac-
cordance with paragraphs (9) and (10) of this 
subsection or to disaffirm or repudiate any such 
contract in accordance with subsection (e)(1) of 
this section. 
‘‘(G) WALKAWAY
CLAUSES
NOT
EFFEC-
TIVE.—
‘‘(i) IN
GENERAL.—Notwithstanding 
the provisions of subparagraphs (A) and 
(E), and sections 403 and 404 of the Fed-
eral Deposit Insurance Corporation Im-
provement Act of 1991, no walkaway 
clause shall be enforceable in a qualified fi-
nancial contract of an insured depository 
institution in default.
331
‘‘(ii) WALKAWAY CLAUSE DEFINED.—
For purposes of this subparagraph, the 
term ‘walkaway clause’ means a provision 
in a qualified financial contract that, after 
calculation of a value of a party’s position 
or an amount due to or from 1 of the par-
ties in accordance with its terms upon ter-
mination, liquidation, or acceleration of the 
qualified financial contract, either does not 
create a payment obligation of a party or 
extinguishes a payment obligation of a 
party in whole or in part solely because of 
such party’s status as a nondefaulting 
party.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENT.—
Section 11(e)(12)(A) of the Federal Deposit Insurance 
Act (12 U.S.C. 1821(e)(12)(A)) is amended by inserting 
‘‘or the exercise of rights or powers by’’ after ‘‘the ap-
pointment of’’. 
SEC. 903. AMENDMENTS RELATING TO TRANSFERS OF 
QUALIFIED FINANCIAL CONTRACTS. 
(a) TRANSFERS
OF QUALIFIED FINANCIAL CON-
TRACTS TO FINANCIAL INSTITUTIONS.—Section 11(e)(9) 
of the Federal Deposit Insurance Act (12 U.S.C. 
1821(e)(9)) is amended to read as follows:
332
‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON-
TRACTS.—
‘‘(A) IN GENERAL.—In making any trans-
fer of assets or liabilities of a depository institu-
tion in default which includes any qualified fi-
nancial contract, the conservator or receiver for 
such depository institution shall either—
‘‘(i) transfer to one financial institu-
tion, other than a financial institution for 
which a conservator, receiver, trustee in 
bankruptcy, or other legal custodian has 
been appointed or which is otherwise the 
subject of a bankruptcy or insolvency pro-
ceeding—
‘‘(I) all qualified financial con-
tracts between any person or any af-
filiate of such person and the deposi-
tory institution in default; 
‘‘(II) all claims of such person or 
any affiliate of such person against 
such depository institution under any 
such contract (other than any claim 
which, under the terms of any such 
contract, is subordinated to the claims
333
of general unsecured creditors of such 
institution); 
‘‘(III) all claims of such deposi-
tory institution against such person or 
any affiliate of such person under any 
such contract; and 
‘‘(IV) all property securing or 
any other credit enhancement for any 
contract described in subclause (I) or 
any claim described in subclause (II) 
or (III) under any such contract; or 
‘‘(ii) transfer none of the qualified fi-
nancial contracts, claims, property or other 
credit enhancement referred to in clause (i) 
(with respect to such person and any affil-
iate of such person).
‘‘(B) TRANSFER TO FOREIGN BANK, FOR-
EIGN FINANCIAL INSTITUTION, OR BRANCH OR 
AGENCY OF A FOREIGN BANK OR FINANCIAL IN-
STITUTION.—In transferring any qualified fi-
nancial contracts and related claims and prop-
erty under subparagraph (A)(i), the conservator 
or receiver for the depository institution shall 
not make such transfer to a foreign bank, fi-
nancial institution organized under the laws of
334
a foreign country, or a branch or agency of a 
foreign bank or financial institution unless, 
under the law applicable to such bank, financial 
institution, branch or agency, to the qualified 
financial contracts, and to any netting contract, 
any security agreement or arrangement or other 
credit enhancement related to one or more 
qualified financial contracts, the contractual 
rights of the parties to such qualified financial 
contracts, netting contracts, security agree-
ments or arrangements, or other credit en-
hancements are enforceable substantially to the 
same extent as permitted under this section. 
‘‘(C) TRANSFER OF CONTRACTS SUBJECT 
TO
THE
RULES
OF
A
CLEARING
ORGANIZA-
TION.—In the event that a conservator or re-
ceiver transfers any qualified financial contract 
and related claims, property, and credit en-
hancements pursuant to subparagraph (A)(i) 
and such contract is cleared by or subject to the 
rules of a clearing organization, the clearing or-
ganization shall not be required to accept the 
transferee as a member by virtue of the trans-
fer.
335
‘‘(D) DEFINITIONS.—For purposes of this 
paragraph, the term ‘financial institution’ 
means a broker or dealer, a depository institu-
tion, a futures commission merchant, or any 
other institution, as determined by the Corpora-
tion by regulation to be a financial institution, 
and the term ‘clearing organization’ has the 
same meaning as in section 402 of the Federal 
Deposit Insurance Corporation Improvement 
Act of 1991.’’. 
(b) NOTICE TO QUALIFIED FINANCIAL CONTRACT 
COUNTERPARTIES.—Section 11(e)(10)(A) of the Federal 
Deposit Insurance Act (12 U.S.C. 1821(e)(10)(A)) is 
amended in the material immediately following clause (ii) 
by striking ‘‘the conservator’’ and all that follows through 
the period and inserting the following: ‘‘the conservator 
or receiver shall notify any person who is a party to any 
such contract of such transfer by 5:00 p.m. (eastern time) 
on the business day following the date of the appointment 
of the receiver in the case of a receivership, or the business 
day following such transfer in the case of a conservator-
ship.’’. 
(c) RIGHTS AGAINST RECEIVER AND TREATMENT OF 
BRIDGE BANKS.—Section 11(e)(10) of the Federal De-
336
posit Insurance Act (12 U.S.C. 1821(e)(10)) is amend-
ed—
(1) by redesignating subparagraph (B) as sub-
paragraph (D); and 
(2) by inserting after subparagraph (A) the fol-
lowing new subparagraphs: 
‘‘(B) CERTAIN
RIGHTS
NOT
ENFORCE-
ABLE.—
‘‘(i) RECEIVERSHIP.—A person who is 
a party to a qualified financial contract 
with an insured depository institution may 
not exercise any right that such person has 
to terminate, liquidate, or net such con-
tract under paragraph (8)(A) of this sub-
section or section 403 or 404 of the Fed-
eral Deposit Insurance Corporation Im-
provement Act of 1991, solely by reason of 
or incidental to the appointment of a re-
ceiver for the depository institution (or the 
insolvency or financial condition of the de-
pository institution for which the receiver 
has been appointed)—
‘‘(I) until 5:00 p.m. (eastern 
time) on the business day following
337
the date of the appointment of the re-
ceiver; or 
‘‘(II) after the person has re-
ceived notice that the contract has 
been transferred pursuant to para-
graph (9)(A). 
‘‘(ii) CONSERVATORSHIP.—A person 
who is a party to a qualified financial con-
tract with an insured depository institution 
may not exercise any right that such per-
son has to terminate, liquidate, or net such 
contract under paragraph (8)(E) of this 
subsection or section 403 or 404 of the 
Federal Deposit Insurance Corporation 
Improvement Act of 1991, solely by reason 
of or incidental to the appointment of a 
conservator for the depository institution 
(or the insolvency or financial condition of 
the depository institution for which the 
conservator has been appointed). 
‘‘(iii) NOTICE.—For purposes of this 
paragraph, the Corporation as receiver or 
conservator of an insured depository insti-
tution shall be deemed to have notified a 
person who is a party to a qualified finan-
338
cial contract with such depository institu-
tion if the Corporation has taken steps 
reasonably calculated to provide notice to 
such person by the time specified in sub-
paragraph (A). 
‘‘(C) TREATMENT
OF
BRIDGE
BANKS.—
The following institutions shall not be consid-
ered to be a financial institution for which a 
conservator, receiver, trustee in bankruptcy, or 
other legal custodian has been appointed or 
which is otherwise the subject of a bankruptcy 
or insolvency proceeding for purposes of para-
graph (9): 
‘‘(i) A bridge bank. 
‘‘(ii) A depository institution orga-
nized by the Corporation, for which a con-
servator is appointed either—
‘‘(I) immediately upon the orga-
nization of the institution; or 
‘‘(II) at the time of a purchase 
and assumption transaction between 
the depository institution and the Cor-
poration as receiver for a depository 
institution in default.’’.
339
SEC. 904. AMENDMENTS RELATING TO DISAFFIRMANCE OR 
REPUDIATION 
OF 
QUALIFIED 
FINANCIAL 
CONTRACTS. 
Section 11(e) of the Federal Deposit Insurance Act 
(12 U.S.C. 1821(e)) is amended—
(1) by redesignating paragraphs (11) through 
(15) as paragraphs (12) through (16), respectively; 
(2) by inserting after paragraph (10) the fol-
lowing new paragraph: 
‘‘(11) DISAFFIRMANCE
OR
REPUDIATION
OF 
QUALIFIED
FINANCIAL
CONTRACTS.—In exercising 
the rights of disaffirmance or repudiation of a con-
servator or receiver with respect to any qualified fi-
nancial contract to which an insured depository in-
stitution is a party, the conservator or receiver for 
such institution shall either—
‘‘(A) disaffirm or repudiate all qualified fi-
nancial contracts between—
‘‘(i) any person or any affiliate of 
such person; and 
‘‘(ii) the depository institution in de-
fault; or 
‘‘(B) disaffirm or repudiate none of the 
qualified financial contracts referred to in sub-
paragraph (A) (with respect to such person or 
any affiliate of such person).’’; and
340
(3) by adding at the end the following new 
paragraph: 
‘‘(17) SAVINGS
CLAUSE.—The meanings of 
terms used in this subsection are applicable for pur-
poses of this subsection only, and shall not be con-
strued or applied so as to challenge or affect the 
characterization, definition, or treatment of any 
similar terms under any other statute, regulation, or 
rule, including the Gramm-Leach-Bliley Act, the 
Legal Certainty for Bank Products Act of 2000, the 
securities laws (as that term is defined in section 
3(a)(47) of the Securities Exchange Act of 1934), 
and the Commodity Exchange Act.’’. 
SEC. 905. CLARIFYING AMENDMENT RELATING TO MASTER 
AGREEMENTS. 
Section 11(e)(8)(D)(vii) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(e)(8)(D)(vii)) is amended to 
read as follows: 
‘‘(vii) 
TREATMENT
OF
MASTER 
AGREEMENT
AS
ONE
AGREEMENT.—Any 
master agreement for any contract or 
agreement described in any preceding 
clause of this subparagraph (or any master 
agreement for such master agreement or 
agreements), together with all supplements
341
to such master agreement, shall be treated 
as a single agreement and a single quali-
fied financial contract. If a master agree-
ment contains provisions relating to agree-
ments or transactions that are not them-
selves qualified financial contracts, the 
master agreement shall be deemed to be a 
qualified financial contract only with re-
spect to those transactions that are them-
selves qualified financial contracts.’’.
SEC. 906. FEDERAL DEPOSIT INSURANCE CORPORATION 
IMPROVEMENT ACT OF 1991. 
(a) DEFINITIONS.—Section 402 of the Federal De-
posit Insurance Corporation Improvement Act of 1991 (12 
U.S.C. 4402) is amended—
(1) in paragraph (2)—
(A) in subparagraph (A)(ii), by inserting 
before the semicolon ‘‘, or is exempt from such 
registration by order of the Securities and Ex-
change Commission’’; and 
(B) in subparagraph (B), by inserting be-
fore the period ‘‘, that has been granted an ex-
emption under section 4(c)(1) of the Com-
modity Exchange Act, or that is a multilateral
342
clearing organization (as defined in section 408 
of this Act)’’; 
(2) in paragraph (6)—
(A) by redesignating subparagraphs (B) 
through (D) as subparagraphs (C) through (E), 
respectively; 
(B) by inserting after subparagraph (A) 
the following new subparagraph: 
‘‘(B) an uninsured national bank or an un-
insured State bank that is a member of the 
Federal Reserve System, if the national bank or 
State member bank is not eligible to make ap-
plication to become an insured bank under sec-
tion 5 of the Federal Deposit Insurance Act;’’; 
and 
(C) by amending subparagraph (C), so re-
designated, to read as follows: 
‘‘(C) a branch or agency of a foreign bank, 
a foreign bank and any branch or agency of the 
foreign bank, or the foreign bank that estab-
lished the branch or agency, as those terms are 
defined in section 1(b) of the International 
Banking Act of 1978;’’; 
(3) in paragraph (11), by inserting before the 
period ‘‘and any other clearing organization with
343
which such clearing organization has a netting con-
tract’’; 
(4) by amending paragraph (14)(A)(i) to read 
as follows: 
‘‘(i) means a contract or agreement 
between 2 or more financial institutions, 
clearing organizations, or members that 
provides for netting present or future pay-
ment obligations or payment entitlements 
(including liquidation or close out values 
relating to such obligations or entitle-
ments) among the parties to the agree-
ment; and’’; and 
(5) by adding at the end the following new 
paragraph: 
‘‘(15) PAYMENT.—The term ‘payment’ means a 
payment of United States dollars, another currency, 
or a composite currency, and a noncash delivery, in-
cluding a payment or delivery to liquidate an 
unmatured obligation.’’. 
(b) ENFORCEABILITY OF BILATERAL NETTING CON-
TRACTS.—Section 403 of the Federal Deposit Insurance 
Corporation Improvement Act of 1991 (12 U.S.C. 4403) 
is amended—
344
(1) by striking subsection (a) and inserting the 
following: 
‘‘(a) GENERAL RULE.—Notwithstanding any other 
provision of State or Federal law (other than paragraphs 
(8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal 
Deposit Insurance Act or any order authorized under sec-
tion 5(b)(2) of the Securities Investor Protection Act of 
1970), the covered contractual payment obligations and 
the covered contractual payment entitlements between any 
2 financial institutions shall be netted in accordance with, 
and subject to the conditions of, the terms of any applica-
ble netting contract (except as provided in section 
561(b)(2) of title 11, United States Code).’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(f) 
ENFORCEABILITY
OF
SECURITY
AGREE-
MENTS.—The provisions of any security agreement or ar-
rangement or other credit enhancement related to one or 
more netting contracts between any 2 financial institu-
tions shall be enforceable in accordance with their terms 
(except as provided in section 561(b)(2) of title 11, United 
States Code), and shall not be stayed, avoided, or other-
wise limited by any State or Federal law (other than para-
graphs (8)(E), (8)(F), and (10)(B) of section 11(e) of the
345
Federal Deposit Insurance Act and section 5(b)(2) of the 
Securities Investor Protection Act of 1970).’’. 
(c) ENFORCEABILITY OF CLEARING ORGANIZATION 
NETTING CONTRACTS.—Section 404 of the Federal De-
posit Insurance Corporation Improvement Act of 1991 (12 
U.S.C. 4404) is amended—
(1) by striking subsection (a) and inserting the 
following: 
‘‘(a) GENERAL RULE.—Notwithstanding any other 
provision of State or Federal law (other than paragraphs 
(8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal 
Deposit Insurance Act and any order authorized under 
section 5(b)(2) of the Securities Investor Protection Act 
of 1970), the covered contractual payment obligations and 
the covered contractual payment entitlements of a member 
of a clearing organization to and from all other members 
of a clearing organization shall be netted in accordance 
with and subject to the conditions of any applicable net-
ting contract (except as provided in section 561(b)(2) of 
title 11, United States Code).’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(h) 
ENFORCEABILITY
OF
SECURITY
AGREE-
MENTS.—The provisions of any security agreement or ar-
rangement or other credit enhancement related to one or
346
more netting contracts between any 2 members of a clear-
ing organization shall be enforceable in accordance with 
their terms (except as provided in section 561(b)(2) of 
title 11, United States Code), and shall not be stayed, 
avoided, or otherwise limited by any State or Federal law 
(other than paragraphs (8)(E), (8)(F), and (10)(B) of sec-
tion 11(e) of the Federal Deposit Insurance Act and sec-
tion 5(b)(2) of the Securities Investor Protection Act of 
1970).’’. 
(d) ENFORCEABILITY OF CONTRACTS WITH UNIN-
SURED
NATIONAL
BANKS, 
UNINSURED
FEDERAL 
BRANCHES AND AGENCIES, CERTAIN UNINSURED STATE 
MEMBER BANKS, AND EDGE ACT CORPORATIONS.—The 
Federal Deposit Insurance Corporation Improvement Act 
of 1991 (12 U.S.C. 4401 et seq.) is amended—
(1) by redesignating section 407 as section 
407A; and 
(2) by inserting after section 406 the following 
new section:
347
‘‘SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED 
NATIONAL 
BANKS, 
UNINSURED 
FEDERAL 
BRANCHES AND AGENCIES, CERTAIN UNIN-
SURED STATE MEMBER BANKS, AND EDGE 
ACT CORPORATIONS. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law, paragraphs (8), (9), (10), and (11) of section 
11(e) of the Federal Deposit Insurance Act shall apply 
to an uninsured national bank or uninsured Federal 
branch or Federal agency, a corporation chartered under 
section 25A of the Federal Reserve Act, or an uninsured 
State member bank which operates, or operates as, a mul-
tilateral clearing organization pursuant to section 409 of 
this Act, except that for such purpose—
‘‘(1) any reference to the ‘Corporation as re-
ceiver’ or ‘the receiver or the Corporation’ shall refer 
to the receiver appointed by the Comptroller of the 
Currency in the case of an uninsured national bank 
or uninsured Federal branch or agency, or to the re-
ceiver appointed by the Board of Governors of the 
Federal Reserve System in the case of a corporation 
chartered under section 25A of the Federal Reserve 
Act or an uninsured State member bank; 
‘‘(2) any reference to the ‘Corporation’ (other 
than in section 11(e)(8)(D) of such Act), the ‘Cor-
poration, whether acting as such or as conservator
348
or receiver’, a ‘receiver’, or a ‘conservator’ shall refer 
to the receiver or conservator appointed by the 
Comptroller of the Currency in the case of an unin-
sured national bank or uninsured Federal branch or 
agency, or to the receiver or conservator appointed 
by the Board of Governors of the Federal Reserve 
System in the case of a corporation chartered under 
section 25A of the Federal Reserve Act or an unin-
sured State member bank; and 
‘‘(3) any reference to an ‘insured depository in-
stitution’ or ‘depository institution’ shall refer to an 
uninsured national bank, an uninsured Federal 
branch or Federal agency, a corporation chartered 
under section 25A of the Federal Reserve Act, or an 
uninsured State member bank which operates, or op-
erates as, a multilateral clearing organization pursu-
ant to section 409 of this Act. 
‘‘(b) LIABILITY.—The liability of a receiver or conser-
vator of an uninsured national bank, uninsured Federal 
branch or agency, a corporation chartered under section 
25A of the Federal Reserve Act, or an uninsured State 
member bank which operates, or operates as, a multilat-
eral clearing organization pursuant to section 409 of this 
Act, shall be determined in the same manner and subject 
to the same limitations that apply to receivers and con-
349
servators of insured depository institutions under section 
11(e) of the Federal Deposit Insurance Act. 
‘‘(c) REGULATORY AUTHORITY.—
‘‘(1) IN
GENERAL.—The Comptroller of the 
Currency in the case of an uninsured national bank 
or uninsured Federal branch or agency and the 
Board of Governors of the Federal Reserve System 
in the case of a corporation chartered under section 
25A of the Federal Reserve Act, or an uninsured 
State member bank that operates, or operates as, a 
multilateral clearing organization pursuant to sec-
tion 409 of this Act, in consultation with the Fed-
eral Deposit Insurance Corporation, may each pro-
mulgate regulations solely to implement this section. 
‘‘(2) SPECIFIC
REQUIREMENT.—In promul-
gating regulations, limited solely to implementing 
paragraphs (8), (9), (10), and (11) of section 11(e) 
of the Federal Deposit Insurance Act, the Comp-
troller of the Currency and the Board of Governors 
of the Federal Reserve System each shall ensure 
that the regulations generally are consistent with the 
regulations and policies of the Federal Deposit In-
surance Corporation adopted pursuant to the Fed-
eral Deposit Insurance Act.
350
‘‘(d) DEFINITIONS.—For purposes of this section, the 
terms ‘Federal branch’, ‘Federal agency’, and ‘foreign 
bank’ have the same meanings as in section 1(b) of the 
International Banking Act of 1978.’’. 
SEC. 907. BANKRUPTCY LAW AMENDMENTS. 
(a) DEFINITIONS OF FORWARD CONTRACT, REPUR-
CHASE AGREEMENT, SECURITIES CLEARING AGENCY, 
SWAP AGREEMENT, COMMODITY CONTRACT, AND SECU-
RITIES CONTRACT.—Title 11, United States Code, is 
amended—
(1) in section 101—
(A) in paragraph (25)—
(i) by striking ‘‘means a contract’’ 
and inserting ‘‘means—
‘‘(A) a contract’’; 
(ii) by striking ‘‘, or any combination 
thereof or option thereon;’’ and inserting 
‘‘, or any other similar agreement;’’; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(B) any combination of agreements or 
transactions referred to in subparagraphs (A) 
and (C);
351
‘‘(C) any option to enter into an agreement 
or transaction referred to in subparagraph (A) 
or (B); 
‘‘(D) a master agreement that provides for 
an agreement or transaction referred to in sub-
paragraph (A), (B), or (C), together with all 
supplements to any such master agreement, 
without regard to whether such master agree-
ment provides for an agreement or transaction 
that is not a forward contract under this para-
graph, except that such master agreement shall 
be considered to be a forward contract under 
this paragraph only with respect to each agree-
ment or transaction under such master agree-
ment that is referred to in subparagraph (A), 
(B), or (C); or 
‘‘(E) any security agreement or arrange-
ment, or other credit enhancement related to 
any agreement or transaction referred to in 
subparagraph (A), (B), (C), or (D), including 
any guarantee or reimbursement obligation by 
or to a forward contract merchant or financial 
participant in connection with any agreement or 
transaction referred to in any such subpara-
graph, but not to exceed the damages in con-
352
nection with any such agreement or transaction, 
measured in accordance with section 562 of this 
title;’’; 
(B) in paragraph (46), by striking ‘‘on any 
day during the period beginning 90 days before 
the date of’’ and inserting ‘‘at any time before’’; 
(C) by amending paragraph (47) to read 
as follows: 
‘‘(47) ‘repurchase agreement’ (which definition 
also applies to a reverse repurchase agreement)—
‘‘(A) means—
‘‘(i) an agreement, including related 
terms, which provides for the transfer of 
one or more certificates of deposit, mort-
gage related securities (as defined in sec-
tion 3 of the Securities Exchange Act of 
1934), mortgage loans, interests in mort-
gage related securities or mortgage loans, 
eligible bankers’ acceptances, qualified for-
eign government securities (defined as a 
security that is a direct obligation of, or 
that is fully guaranteed by, the central 
government of a member of the Organiza-
tion for Economic Cooperation and Devel-
opment), or securities that are direct obli-
353
gations of, or that are fully guaranteed by, 
the United States or any agency of the 
United States against the transfer of funds 
by the transferee of such certificates of de-
posit, eligible bankers’ acceptances, securi-
ties, mortgage loans, or interests, with a 
simultaneous agreement by such transferee 
to transfer to the transferor thereof certifi-
cates of deposit, eligible bankers’ accept-
ance, securities, mortgage loans, or inter-
ests of the kind described in this clause, at 
a date certain not later than 1 year after 
such transfer or on demand, against the 
transfer of funds; 
‘‘(ii) any combination of agreements 
or transactions referred to in clauses (i) 
and (iii); 
‘‘(iii) an option to enter into an agree-
ment or transaction referred to in clause 
(i) or (ii); 
‘‘(iv) a master agreement that pro-
vides for an agreement or transaction re-
ferred to in clause (i), (ii), or (iii), together 
with all supplements to any such master 
agreement, without regard to whether such
354
master agreement provides for an agree-
ment or transaction that is not a repur-
chase agreement under this paragraph, ex-
cept that such master agreement shall be 
considered to be a repurchase agreement 
under this paragraph only with respect to 
each agreement or transaction under the 
master agreement that is referred to in 
clause (i), (ii), or (iii); or 
‘‘(v) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreement or transaction re-
ferred to in clause (i), (ii), (iii), or (iv), in-
cluding any guarantee or reimbursement 
obligation by or to a repo participant or fi-
nancial participant in connection with any 
agreement or transaction referred to in 
any such clause, but not to exceed the 
damages in connection with any such 
agreement or transaction, measured in ac-
cordance with section 562 of this title; and 
‘‘(B) does not include a repurchase obliga-
tion under a participation in a commercial 
mortgage loan;’’;
355
(D) in paragraph (48), by inserting ‘‘, or 
exempt from such registration under such sec-
tion pursuant to an order of the Securities and 
Exchange Commission,’’ after ‘‘1934’’; and 
(E) by amending paragraph (53B) to read 
as follows: 
‘‘(53B) ‘swap agreement’—
‘‘(A) means—
‘‘(i) any agreement, including the 
terms and conditions incorporated by ref-
erence in such agreement, which is—
‘‘(I) an interest rate swap, op-
tion, future, or forward agreement, in-
cluding a rate floor, rate cap, rate col-
lar, cross-currency rate swap, and 
basis swap; 
‘‘(II) a spot, same day-tomorrow, 
tomorrow-next, forward, or other for-
eign exchange or precious metals 
agreement; 
‘‘(III) a currency swap, option, 
future, or forward agreement; 
‘‘(IV) an equity index or equity 
swap, option, future, or forward 
agreement;
356
‘‘(V) a debt index or debt swap, 
option, future, or forward agreement; 
‘‘(VI) a total return, credit 
spread or credit swap, option, future, 
or forward agreement; 
‘‘(VII) a commodity index or a 
commodity swap, option, future, or 
forward agreement; or 
‘‘(VIII) a weather swap, weather 
derivative, or weather option; 
‘‘(ii) any agreement or transaction 
that is similar to any other agreement or 
transaction referred to in this paragraph 
and that—
‘‘(I) is of a type that has been, is 
presently, or in the future becomes, 
the subject of recurrent dealings in 
the swap markets (including terms 
and conditions incorporated by ref-
erence therein); and 
‘‘(II) is a forward, swap, future, 
or option on one or more rates, cur-
rencies, commodities, equity securities, 
or other equity instruments, debt se-
curities or other debt instruments,
357
quantitative measures associated with 
an occurrence, extent of an occur-
rence, or contingency associated with 
a financial, commercial, or economic 
consequence, or economic or financial 
indices or measures of economic or fi-
nancial risk or value; 
‘‘(iii) any combination of agreements 
or transactions referred to in this subpara-
graph; 
‘‘(iv) any option to enter into an 
agreement or transaction referred to in 
this subparagraph; 
‘‘(v) a master agreement that provides 
for an agreement or transaction referred to 
in clause (i), (ii), (iii), or (iv), together 
with all supplements to any such master 
agreement, and without regard to whether 
the master agreement contains an agree-
ment or transaction that is not a swap 
agreement under this paragraph, except 
that the master agreement shall be consid-
ered to be a swap agreement under this 
paragraph only with respect to each agree-
ment or transaction under the master
358
agreement that is referred to in clause (i), 
(ii), (iii), or (iv); or 
‘‘(vi) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreements or transactions re-
ferred to in clause (i) through (v), includ-
ing any guarantee or reimbursement obli-
gation by or to a swap participant or fi-
nancial participant in connection with any 
agreement or transaction referred to in 
any such clause, but not to exceed the 
damages in connection with any such 
agreement or transaction, measured in ac-
cordance with section 562 of this title; and 
‘‘(B) is applicable for purposes of this title 
only, and shall not be construed or applied so 
as to challenge or affect the characterization, 
definition, or treatment of any swap agreement 
under any other statute, regulation, or rule, in-
cluding the Securities Act of 1933, the Securi-
ties Exchange Act of 1934, the Public Utility 
Holding Company Act of 1935, the Trust In-
denture Act of 1939, the Investment Company 
Act of 1940, the Investment Advisers Act of 
1940, the Securities Investor Protection Act of
359
1970, the Commodity Exchange Act, the 
Gramm-Leach-Bliley Act, and the Legal Cer-
tainty for Bank Products Act of 2000;’’; 
(2) in section 741(7), by striking paragraph (7) 
and inserting the following: 
‘‘(7) ‘securities contract’—
‘‘(A) means—
‘‘(i) a contract for the purchase, sale, 
or loan of a security, a certificate of de-
posit, a mortgage loan or any interest in a 
mortgage loan, a group or index of securi-
ties, certificates of deposit, or mortgage 
loans or interests therein (including an in-
terest therein or based on the value there-
of), or option on any of the foregoing, in-
cluding an option to purchase or sell any 
such security, certificate of deposit, mort-
gage loan, interest, group or index, or op-
tion, and including any repurchase or re-
verse repurchase transaction on any such 
security, certificate of deposit, mortgage 
loan, interest, group or index, or option; 
‘‘(ii) any option entered into on a na-
tional securities exchange relating to for-
eign currencies;
360
‘‘(iii) the guarantee by or to any secu-
rities clearing agency of a settlement of 
cash, securities, certificates of deposit, 
mortgage loans or interests therein, group 
or index of securities, or mortgage loans or 
interests therein (including any interest 
therein or based on the value thereof), or 
option on any of the foregoing, including 
an option to purchase or sell any such se-
curity, certificate of deposit, mortgage 
loan, interest, group or index, or option; 
‘‘(iv) any margin loan; 
‘‘(v) any other agreement or trans-
action that is similar to an agreement or 
transaction referred to in this subpara-
graph; 
‘‘(vi) any combination of the agree-
ments or transactions referred to in this 
subparagraph; 
‘‘(vii) any option to enter into any 
agreement or transaction referred to in 
this subparagraph; 
‘‘(viii) a master agreement that pro-
vides for an agreement or transaction re-
ferred to in clause (i), (ii), (iii), (iv), (v),
361
(vi), or (vii), together with all supplements 
to any such master agreement, without re-
gard to whether the master agreement pro-
vides for an agreement or transaction that 
is not a securities contract under this sub-
paragraph, except that such master agree-
ment shall be considered to be a securities 
contract under this subparagraph only with 
respect to each agreement or transaction 
under such master agreement that is re-
ferred to in clause (i), (ii), (iii), (iv), (v), 
(vi), or (vii); or 
‘‘(ix) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreement or transaction re-
ferred to in this subparagraph, including 
any guarantee or reimbursement obligation 
by or to a stockbroker, securities clearing 
agency, financial institution, or financial 
participant in connection with any agree-
ment or transaction referred to in this sub-
paragraph, but not to exceed the damages 
in connection with any such agreement or 
transaction, measured in accordance with 
section 562 of this title; and
362
‘‘(B) does not include any purchase, sale, 
or repurchase obligation under a participation 
in a commercial mortgage loan;’’; and 
(3) in section 761(4)—
(A) by striking ‘‘or’’ at the end of subpara-
graph (D); and 
(B) by adding at the end the following: 
‘‘(F) any other agreement or transaction 
that is similar to an agreement or transaction 
referred to in this paragraph; 
‘‘(G) any combination of the agreements or 
transactions referred to in this paragraph; 
‘‘(H) any option to enter into an agree-
ment or transaction referred to in this para-
graph; 
‘‘(I) a master agreement that provides for 
an agreement or transaction referred to in sub-
paragraph (A), (B), (C), (D), (E), (F), (G), or 
(H), together with all supplements to such mas-
ter agreement, without regard to whether the 
master agreement provides for an agreement or 
transaction that is not a commodity contract 
under this paragraph, except that the master 
agreement shall be considered to be a com-
modity contract under this paragraph only with
363
respect to each agreement or transaction under 
the master agreement that is referred to in sub-
paragraph (A), (B), (C), (D), (E), (F), (G), or 
(H); or 
‘‘(J) any security agreement or arrange-
ment or other credit enhancement related to 
any agreement or transaction referred to in this 
paragraph, including any guarantee or reim-
bursement obligation by or to a commodity 
broker or financial participant in connection 
with any agreement or transaction referred to 
in this paragraph, but not to exceed the dam-
ages in connection with any such agreement or 
transaction, measured in accordance with sec-
tion 562 of this title;’’. 
(b) DEFINITIONS OF FINANCIAL INSTITUTION, FI-
NANCIAL PARTICIPANT, AND FORWARD CONTRACT MER-
CHANT.—Section 101 of title 11, United States Code, is 
amended—
(1) by striking paragraph (22) and inserting 
the following: 
‘‘(22) ‘financial institution’ means—
‘‘(A) a Federal reserve bank, or an entity 
(domestic or foreign) that is a commercial or 
savings bank, industrial savings bank, savings
364
and loan association, trust company, or receiver 
or conservator for such entity and, when any 
such Federal reserve bank, receiver, conservator 
or entity is acting as agent or custodian for a 
customer in connection with a securities con-
tract (as defined in section 741) such customer; 
or 
‘‘(B) in connection with a securities con-
tract (as defined in section 741) an investment 
company registered under the Investment Com-
pany Act of 1940;’’; 
(2) by inserting after paragraph (22) the fol-
lowing: 
‘‘(22A) ‘financial participant’ means—
‘‘(A) an entity that, at the time it enters 
into a securities contract, commodity contract, 
swap agreement, repurchase agreement, or for-
ward contract, or at the time of the filing of the 
petition, has one or more agreements or trans-
actions described in paragraph (1), (2), (3), (4), 
(5), or (6) of section 561(a) with the debtor or 
any other entity (other than an affiliate) of a 
total gross dollar value of not less than 
$1,000,000,000 in notional or actual principal 
amount outstanding on any day during the pre-
365
vious 15-month period, or has gross mark-to-
market positions of not less than $100,000,000 
(aggregated across counterparties) in one or 
more such agreements or transactions with the 
debtor or any other entity (other than an affil-
iate) on any day during the previous 15-month 
period; or 
‘‘(B) a clearing organization (as defined in 
section 402 of the Federal Deposit Insurance 
Corporation Improvement Act of 1991);’’; and 
(3) by striking paragraph (26) and inserting 
the following: 
‘‘(26) ‘forward contract merchant’ means a 
Federal reserve bank, or an entity the business of 
which consists in whole or in part of entering into 
forward contracts as or with merchants in a com-
modity (as defined in section 761) or any similar 
good, article, service, right, or interest which is pres-
ently or in the future becomes the subject of dealing 
in the forward contract trade;’’. 
(c) DEFINITION OF MASTER NETTING AGREEMENT 
AND MASTER NETTING AGREEMENT PARTICIPANT.—Sec-
tion 101 of title 11, United States Code, is amended by 
inserting after paragraph (38) the following new para-
graphs:
366
‘‘(38A) ‘master netting agreement’—
‘‘(A) means an agreement providing for 
the exercise of rights, including rights of net-
ting, setoff, liquidation, termination, accelera-
tion, or close out, under or in connection with 
one or more contracts that are described in any 
one or more of paragraphs (1) through (5) of 
section 561(a), or any security agreement or ar-
rangement or other credit enhancement related 
to one or more of the foregoing, including any 
guarantee or reimbursement obligation related 
to 1 or more of the foregoing; and 
‘‘(B) if the agreement contains provisions 
relating to agreements or transactions that are 
not contracts described in paragraphs (1) 
through (5) of section 561(a), shall be deemed 
to be a master netting agreement only with re-
spect to those agreements or transactions that 
are described in any one or more of paragraphs 
(1) through (5) of section 561(a); 
‘‘(38B) ‘master netting agreement participant’ 
means an entity that, at any time before the filing 
of the petition, is a party to an outstanding master 
netting agreement with the debtor;’’.
367
(d) SWAP AGREEMENTS, SECURITIES CONTRACTS, 
COMMODITY CONTRACTS, FORWARD CONTRACTS, REPUR-
CHASE AGREEMENTS, AND MASTER NETTING AGREE-
MENTS UNDER THE AUTOMATIC-STAY.—
(1) IN GENERAL.—Section 362(b) of title 11, 
United States Code, as amended by sections 224, 
303, 311, 401, and 718, is amended—
(A) 
in 
paragraph 
(6), 
by 
inserting
‘‘, pledged to, under the control of,’’ after ‘‘held 
by’’; 
(B) 
in 
paragraph 
(7), 
by 
inserting
‘‘, pledged to, under the control of,’’ after ‘‘held 
by’’; 
(C) by striking paragraph (17) and insert-
ing the following: 
‘‘(17) under subsection (a), of the setoff by a 
swap participant or financial participant of a mutual 
debt and claim under or in connection with one or 
more swap agreements that constitutes the setoff of 
a claim against the debtor for any payment or other 
transfer of property due from the debtor under or in 
connection with any swap agreement against any 
payment due to the debtor from the swap partici-
pant or financial participant under or in connection 
with any swap agreement or against cash, securities,
368
or other property held by, pledged to, under the con-
trol of, or due from such swap participant or finan-
cial participant to margin, guarantee, secure, or set-
tle any swap agreement;’’; and 
(D) by inserting after paragraph (26) the 
following: 
‘‘(27) under subsection (a), of the setoff by a 
master netting agreement participant of a mutual 
debt and claim under or in connection with one or 
more master netting agreements or any contract or 
agreement subject to such agreements that con-
stitutes the setoff of a claim against the debtor for 
any payment or other transfer of property due from 
the debtor under or in connection with such agree-
ments or any contract or agreement subject to such 
agreements against any payment due to the debtor 
from such master netting agreement participant 
under or in connection with such agreements or any 
contract or agreement subject to such agreements or 
against cash, securities, or other property held by, 
pledged to, under the control of, or due from such 
master netting agreement participant to margin, 
guarantee, secure, or settle such agreements or any 
contract or agreement subject to such agreements, 
to the extent that such participant is eligible to exer-
369
cise such offset rights under paragraph (6), (7), or 
(17) for each individual contract covered by the mas-
ter netting agreement in issue.’’. 
(2) LIMITATION.—Section 362 of title 11, 
United States Code, as amended by sections 106, 
305, 311, and 441, is amended by adding at the end 
the following: 
‘‘(o) The exercise of rights not subject to the stay 
arising under subsection (a) pursuant to paragraph (6), 
(7), (17), or (27) of subsection (b) shall not be stayed 
by any order of a court or administrative agency in any 
proceeding under this title.’’. 
(e) LIMITATION
OF AVOIDANCE POWERS UNDER 
MASTER NETTING AGREEMENT.—Section 546 of title 11, 
United States Code, is amended—
(1) in subsection (g) (as added by section 103 
of Public Law 101–311)—
(A) by striking ‘‘under a swap agreement’’; 
(B) by striking ‘‘in connection with a swap 
agreement’’ and inserting ‘‘under or in connec-
tion with any swap agreement’’; and 
(C) by inserting ‘‘or financial participant’’ 
after ‘‘swap participant’’ each place such term 
appears; and 
(2) by adding at the end the following:
370
‘‘(j) Notwithstanding sections 544, 545, 547, 
548(a)(1)(B), and 548(b) the trustee may not avoid a 
transfer made by or to a master netting agreement partici-
pant under or in connection with any master netting 
agreement or any individual contract covered thereby that 
is made before the commencement of the case, except 
under section 548(a)(1)(A) and except to the extent that 
the trustee could otherwise avoid such a transfer made 
under an individual contract covered by such master net-
ting agreement.’’. 
(f) FRAUDULENT TRANSFERS OF MASTER NETTING 
AGREEMENTS.—Section 548(d)(2) of title 11, United 
States Code, is amended—
(1) in subparagraph (C), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (D), by striking the period 
and inserting ‘‘; and’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(E) a master netting agreement participant 
that receives a transfer in connection with a master 
netting agreement or any individual contract covered 
thereby takes for value to the extent of such trans-
fer, except that, with respect to a transfer under any 
individual contract covered thereby, to the extent
371
that such master netting agreement participant oth-
erwise did not take (or is otherwise not deemed to 
have taken) such transfer for value.’’. 
(g) TERMINATION OR ACCELERATION OF SECURITIES 
CONTRACTS.—Section 555 of title 11, United States Code, 
is amended—
(1) by amending the section heading to read as 
follows: 
‘‘§ 555. Contractual right to liquidate, terminate, or 
accelerate a securities contract’’; 
and 
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’. 
(h) TERMINATION OR ACCELERATION OF COMMOD-
ITIES OR FORWARD CONTRACTS.—Section 556 of title 11, 
United States Code, is amended—
(1) by amending the section heading to read as 
follows: 
‘‘§ 556. Contractual right to liquidate, terminate, or 
accelerate a commodities contract or for-
ward contract’’; 
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’; and
372
(3) in the second sentence, by striking ‘‘As 
used’’ and all that follows through ‘‘right,’’ and in-
serting ‘‘As used in this section, the term ‘contrac-
tual right’ includes a right set forth in a rule or 
bylaw of a derivatives clearing organization (as de-
fined in the Commodity Exchange Act), a multilat-
eral clearing organization (as defined in the Federal 
Deposit Insurance Corporation Improvement Act of 
1991), a national securities exchange, a national se-
curities association, a securities clearing agency, a 
contract market designated under the Commodity 
Exchange Act, a derivatives transaction execution 
facility registered under the Commodity Exchange 
Act, or a board of trade (as defined in the Com-
modity Exchange Act) or in a resolution of the gov-
erning board thereof and a right,’’. 
(i) TERMINATION
OR ACCELERATION
OF REPUR-
CHASE AGREEMENTS.—Section 559 of title 11, United 
States Code, is amended—
(1) by amending the section heading to read as 
follows:
373
‘‘§ 559. Contractual right to liquidate, terminate, or 
accelerate a repurchase agreement’’; 
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’; and 
(3) in the third sentence, by striking ‘‘As used’’ 
and all that follows through ‘‘right,’’ and inserting 
‘‘As used in this section, the term ‘contractual right’ 
includes a right set forth in a rule or bylaw of a de-
rivatives clearing organization (as defined in the 
Commodity Exchange Act), a multilateral clearing 
organization (as defined in the Federal Deposit In-
surance Corporation Improvement Act of 1991), a 
national securities exchange, a national securities as-
sociation, a securities clearing agency, a contract 
market designated under the Commodity Exchange 
Act, a derivatives transaction execution facility reg-
istered under the Commodity Exchange Act, or a 
board of trade (as defined in the Commodity Ex-
change Act) or in a resolution of the governing 
board thereof and a right,’’. 
(j) LIQUIDATION, TERMINATION, OR ACCELERATION 
OF SWAP AGREEMENTS.—Section 560 of title 11, United 
States Code, is amended—
(1) by amending the section heading to read as 
follows:
374
‘‘§ 560. Contractual right to liquidate, terminate, or 
accelerate a swap agreement’’; 
(2) in the first sentence, by striking ‘‘termi-
nation of a swap agreement’’ and inserting ‘‘liquida-
tion, termination, or acceleration of one or more 
swap agreements’’; 
(3) by striking ‘‘in connection with any swap 
agreement’’ and inserting ‘‘in connection with the 
termination, liquidation, or acceleration of one or 
more swap agreements’’; and 
(4) in the second sentence, by striking ‘‘As 
used’’ and all that follows through ‘‘right,’’ and in-
serting ‘‘As used in this section, the term ‘contrac-
tual right’ includes a right set forth in a rule or 
bylaw of a derivatives clearing organization (as de-
fined in the Commodity Exchange Act), a multilat-
eral clearing organization (as defined in the Federal 
Deposit Insurance Corporation Improvement Act of 
1991), a national securities exchange, a national se-
curities association, a securities clearing agency, a 
contract market designated under the Commodity 
Exchange Act, a derivatives transaction execution 
facility registered under the Commodity Exchange 
Act, or a board of trade (as defined in the Com-
modity Exchange Act) or in a resolution of the gov-
erning board thereof and a right,’’.
375
(k) LIQUIDATION, TERMINATION, ACCELERATION, OR 
OFFSET UNDER A MASTER NETTING AGREEMENT AND 
ACROSS CONTRACTS.—
(1) IN
GENERAL.—Title 11, United States 
Code, is amended by inserting after section 560 the 
following: 
‘‘§ 561. Contractual right to terminate, liquidate, ac-
celerate, or offset under a master netting 
agreement and across contracts; pro-
ceedings under chapter 15
‘‘(a) Subject to subsection (b), the exercise of any 
contractual right, because of a condition of the kind speci-
fied in section 365(e)(1), to cause the termination, liquida-
tion, or acceleration of or to offset or net termination val-
ues, payment amounts, or other transfer obligations aris-
ing under or in connection with one or more (or the termi-
nation, liquidation, or acceleration of one or more)—
‘‘(1) securities contracts, as defined in section 
741(7); 
‘‘(2) commodity contracts, as defined in section 
761(4); 
‘‘(3) forward contracts; 
‘‘(4) repurchase agreements; 
‘‘(5) swap agreements; or 
‘‘(6) master netting agreements,
376
shall not be stayed, avoided, or otherwise limited by oper-
ation of any provision of this title or by any order of a 
court or administrative agency in any proceeding under 
this title. 
‘‘(b)(1) A party may exercise a contractual right de-
scribed in subsection (a) to terminate, liquidate, or accel-
erate only to the extent that such party could exercise such 
a right under section 555, 556, 559, or 560 for each indi-
vidual contract covered by the master netting agreement 
in issue. 
‘‘(2) If a debtor is a commodity broker subject to sub-
chapter IV of chapter 7—
‘‘(A) a party may not net or offset an obligation 
to the debtor arising under, or in connection with, 
a commodity contract traded on or subject to the 
rules of a contract market designated under the 
Commodity Exchange Act or a derivatives trans-
action execution facility registered under the Com-
modity Exchange Act against any claim arising 
under, or in connection with, other instruments, con-
tracts, or agreements listed in subsection (a) except 
to the extent that the party has positive net equity 
in the commodity accounts at the debtor, as cal-
culated under such subchapter; and
377
‘‘(B) another commodity broker may not net or 
offset an obligation to the debtor arising under, or 
in connection with, a commodity contract entered 
into or held on behalf of a customer of the debtor 
and traded on or subject to the rules of a contract 
market designated under the Commodity Exchange 
Act or a derivatives transaction execution facility 
registered under the Commodity Exchange Act 
against any claim arising under, or in connection 
with, other instruments, contracts, or agreements 
listed in subsection (a). 
‘‘(3) No provision of subparagraph (A) or (B) of 
paragraph (2) shall prohibit the offset of claims and obli-
gations that arise under—
‘‘(A) a cross-margining agreement or similar 
arrangement that has been approved by the Com-
modity Futures Trading Commission or submitted 
to the Commodity Futures Trading Commission 
under paragraph (1) or (2) of section 5c(c) of the 
Commodity Exchange Act and has not been abro-
gated or rendered ineffective by the Commodity Fu-
tures Trading Commission; or 
‘‘(B) any other netting agreement between a 
clearing organization (as defined in section 761) and
378
another entity that has been approved by the Com-
modity Futures Trading Commission. 
‘‘(c) As used in this section, the term ‘contractual 
right’ includes a right set forth in a rule or bylaw of a 
derivatives clearing organization (as defined in the Com-
modity Exchange Act), a multilateral clearing organiza-
tion (as defined in the Federal Deposit Insurance Cor-
poration Improvement Act of 1991), a national securities 
exchange, a national securities association, a securities 
clearing agency, a contract market designated under the 
Commodity Exchange Act, a derivatives transaction execu-
tion facility registered under the Commodity Exchange 
Act, or a board of trade (as defined in the Commodity 
Exchange Act) or in a resolution of the governing board 
thereof, and a right, whether or not evidenced in writing, 
arising under common law, under law merchant, or by rea-
son of normal business practice. 
‘‘(d) Any provisions of this title relating to securities 
contracts, commodity contracts, forward contracts, repur-
chase agreements, swap agreements, or master netting 
agreements shall apply in a case under chapter 15, so that 
enforcement of contractual provisions of such contracts 
and agreements in accordance with their terms will not 
be stayed or otherwise limited by operation of any provi-
sion of this title or by order of a court in any case under
379
this title, and to limit avoidance powers to the same extent 
as in a proceeding under chapter 7 or 11 of this title (such 
enforcement not to be limited based on the presence or 
absence of assets of the debtor in the United States).’’. 
(2) CONFORMING AMENDMENT.—The table of 
sections for chapter 5 of title 11, United States 
Code, is amended by inserting after the item relating 
to section 560 the following:
‘‘561. Contractual right to terminate, liquidate, accelerate, or offset under a 
master netting agreement and across contracts; proceedings 
under chapter 15.’’.
(l) COMMODITY BROKER LIQUIDATIONS.—Title 11, 
United States Code, is amended by inserting after section 
766 the following:
‘‘§ 767. Commodity broker liquidation and forward 
contract merchants, commodity brokers, 
stockbrokers, financial institutions, fi-
nancial participants, securities clearing 
agencies, swap participants, repo partici-
pants, and master netting agreement par-
ticipants 
‘‘Notwithstanding any other provision of this title, 
the exercise of rights by a forward contract merchant, 
commodity broker, stockbroker, financial institution, fi-
nancial participant, securities clearing agency, swap par-
ticipant, repo participant, or master netting agreement 
participant under this title shall not affect the priority of
380
any unsecured claim it may have after the exercise of such 
rights.’’. 
(m) 
STOCKBROKER
LIQUIDATIONS.—Title 
11, 
United States Code, is amended by inserting after section 
752 the following: 
‘‘§ 753. Stockbroker liquidation and forward contract 
merchants, commodity brokers, stock-
brokers, financial institutions, financial 
participants, securities clearing agencies, 
swap participants, repo participants, and 
master netting agreement participants 
‘‘Notwithstanding any other provision of this title, 
the exercise of rights by a forward contract merchant, 
commodity broker, stockbroker, financial institution, secu-
rities clearing agency, swap participant, repo participant, 
financial participant, or master netting agreement partici-
pant under this title shall not affect the priority of any 
unsecured claim it may have after the exercise of such 
rights.’’. 
(n) SETOFF.—Section 553 of title 11, United States 
Code, is amended—
(1) in subsection (a)(2)(B)(ii), by inserting be-
fore the semicolon the following: ‘‘(except for a 
setoff of a kind described in section 362(b)(6),
381
362(b)(7), 362(b)(17), 362(b)(27), 555, 556, 559, 
560, or 561)’’; 
(2) in subsection (a)(3)(C), by inserting before 
the period the following: ‘‘(except for a setoff of a 
kind described in section 362(b)(6), 362(b)(7), 
362(b)(17), 362(b)(27), 555, 556, 559, 560, or 561 
of this title)’’; and 
(3) 
in 
subsection 
(b)(1), 
by 
striking 
‘‘362(b)(14),’’ 
and 
inserting 
‘‘362(b)(17), 
362(b)(27), 555, 556, 559, 560, 561,’’. 
(o) SECURITIES
CONTRACTS, COMMODITY
CON-
TRACTS, AND FORWARD CONTRACTS.—Title 11, United 
States Code, is amended—
(1) in section 362(b)(6), by striking ‘‘financial 
institutions,’’ each place such term appears and in-
serting ‘‘financial institution, financial participant,’’; 
(2) in sections 362(b)(7) and 546(f), by insert-
ing ‘‘or financial participant’’ after ‘‘repo partici-
pant’’ each place such term appears; 
(3) in section 546(e), by inserting ‘‘financial 
participant,’’ after ‘‘financial institution,’’; 
(4) in section 548(d)(2)(B), by inserting ‘‘fi-
nancial participant,’’ after ‘‘financial institution,’’; 
(5) in section 548(d)(2)(C), by inserting ‘‘or fi-
nancial participant’’ after ‘‘repo participant’’;
382
(6) in section 548(d)(2)(D), by inserting ‘‘or fi-
nancial participant’’ after ‘‘swap participant’’; 
(7) in section 555—
(A) by inserting ‘‘financial participant,’’ 
after ‘‘financial institution,’’; and 
(B) by striking the second sentence and in-
serting the following: ‘‘As used in this section, 
the term ‘contractual right’ includes a right set 
forth in a rule or bylaw of a derivatives clearing 
organization (as defined in the Commodity Ex-
change Act), a multilateral clearing organiza-
tion (as defined in the Federal Deposit Insur-
ance Corporation Improvement Act of 1991), a 
national securities exchange, a national securi-
ties association, a securities clearing agency, a 
contract market designated under the Com-
modity Exchange Act, a derivatives transaction 
execution facility registered under the Com-
modity Exchange Act, or a board of trade (as 
defined in the Commodity Exchange Act), or in 
a resolution of the governing board thereof, and 
a right, whether or not in writing, arising under 
common law, under law merchant, or by reason 
of normal business practice’’;
383
(8) in section 556, by inserting ‘‘, financial par-
ticipant,’’ after ‘‘commodity broker’’; 
(9) in section 559, by inserting ‘‘or financial 
participant’’ after ‘‘repo participant’’ each place 
such term appears; and 
(10) in section 560, by inserting ‘‘or financial 
participant’’ after ‘‘swap participant’’. 
(p) CONFORMING AMENDMENTS.—Title 11, United 
States Code, is amended—
(1) in the table of sections for chapter 5—
(A) by amending the items relating to sec-
tions 555 and 556 to read as follows:
‘‘555. Contractual right to liquidate, terminate, or accelerate a securities con-
tract. 
‘‘556. Contractual right to liquidate, terminate, or accelerate a commodities con-
tract or forward contract.’’;
and 
(B) by amending the items relating to sec-
tions 559 and 560 to read as follows:
‘‘559. Contractual right to liquidate, terminate, or accelerate a repurchase 
agreement. 
‘‘560. Contractual right to liquidate, terminate, or accelerate a swap agree-
ment.’’;
and 
(2) in the table of sections for chapter 7—
(A) by inserting after the item relating to 
section 766 the following:
‘‘767. Commodity broker liquidation and forward contract merchants, com-
modity brokers, stockbrokers, financial institutions, financial 
participants, securities clearing agencies, swap participants, 
repo participants, and master netting agreement participants.’’;
384
and 
(B) by inserting after the item relating to 
section 752 the following:
‘‘753. Stockbroker liquidation and forward contract merchants, commodity bro-
kers, stockbrokers, financial institutions, financial participants, 
securities clearing agencies, swap participants, repo partici-
pants, and master netting agreement participants.’’.
SEC. 908. RECORDKEEPING REQUIREMENTS. 
Section 11(e)(8) of the Federal Deposit Insurance 
Act (12 U.S.C. 1821(e)(8)) is amended by adding at the 
end the following new subparagraph: 
‘‘(H) RECORDKEEPING REQUIREMENTS.—
The Corporation, in consultation with the ap-
propriate Federal banking agencies, may pre-
scribe regulations requiring more detailed rec-
ordkeeping by any insured depository institu-
tion with respect to qualified financial contracts 
(including market valuations) only if such in-
sured depository institution is in a troubled 
condition (as such term is defined by the Cor-
poration pursuant to section 32).’’. 
SEC. 909. EXEMPTIONS FROM CONTEMPORANEOUS EXECU-
TION REQUIREMENT. 
Section 13(e)(2) of the Federal Deposit Insurance 
Act (12 U.S.C. 1823(e)(2)) is amended to read as follows:
385
‘‘(2) EXEMPTIONS
FROM
CONTEMPORANEOUS 
EXECUTION REQUIREMENT.—An agreement to pro-
vide for the lawful collateralization of—
‘‘(A) deposits of, or other credit extension 
by, a Federal, State, or local governmental enti-
ty, or of any depositor referred to in section 
11(a)(2), including an agreement to provide col-
lateral in lieu of a surety bond; 
‘‘(B) bankruptcy estate funds pursuant to 
section 345(b)(2) of title 11, United States 
Code; 
‘‘(C) extensions of credit, including any 
overdraft, from a Federal reserve bank or Fed-
eral home loan bank; or 
‘‘(D) one or more qualified financial con-
tracts, as defined in section 11(e)(8)(D),
shall not be deemed invalid pursuant to paragraph 
(1)(B) solely because such agreement was not exe-
cuted contemporaneously with the acquisition of the 
collateral or because of pledges, delivery, or substi-
tution of the collateral made in accordance with such 
agreement.’’. 
SEC. 910. DAMAGE MEASURE. 
(a) IN GENERAL.—Title 11, United States Code, is 
amended—
386
(1) by inserting after section 561, as added by 
section 907, the following: 
‘‘§ 562. Timing of damage measurement in connection 
with swap agreements, securities con-
tracts, forward contracts, commodity con-
tracts, repurchase agreements, and mas-
ter netting agreements 
‘‘(a) If the trustee rejects a swap agreement, securi-
ties contract (as defined in section 741), forward contract, 
commodity contract (as defined in section 761), repur-
chase agreement, or master netting agreement pursuant 
to section 365(a), or if a forward contract merchant, 
stockbroker, financial institution, securities clearing agen-
cy, repo participant, financial participant, master netting 
agreement participant, or swap participant liquidates, ter-
minates, or accelerates such contract or agreement, dam-
ages shall be measured as of the earlier of—
‘‘(1) the date of such rejection; or 
‘‘(2) the date or dates of such liquidation, ter-
mination, or acceleration. 
‘‘(b) If there are not any commercially reasonable de-
terminants of value as of any date referred to in para-
graph (1) or (2) of subsection (a), damages shall be meas-
ured as of the earliest subsequent date or dates on which 
there are commercially reasonable determinants of value.