SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Financial Institution 
Bankruptcy Act of 2014’’. 
SEC. 2. GENERAL PROVISIONS RELATING TO COVERED FI-
NANCIAL CORPORATIONS. 
(a) DEFINITION.—Section 101 of title 11, United 
States Code, is amended by inserting the following after 
paragraph (9): 
‘‘(9A) The term ‘covered financial corporation’ 
means any corporation incorporated or organized 
under any Federal or State law, other than a stock-
broker, a commodity broker, or an entity of the kind 
specified in paragraph (2) or (3) of section 109(b), 
that is— 
‘‘(A) a bank holding company, as defined 
in section 2(a) of the Bank Holding Company 
Act of 1956; or 
‘‘(B) a corporation that exists for the pri-
mary purpose of owning, controlling and financ-
ing its subsidiaries, that has total consolidated 
assets of $50,000,000,000 or greater, and for 
which, in its most recently completed fiscal 
year— 
‘‘(i) annual gross revenues derived by 
the corporation and all of its subsidiaries 
from activities that are financial in nature
(as defined in section 4(k) of the Bank 
Holding Company Act of 1956) and, if ap-
plicable, from the ownership or control of 
one or more insured depository institu-
tions, represents 85 percent or more of the 
consolidated annual gross revenues of the 
corporation; or 
‘‘(ii) the consolidated assets of the 
corporation and all of its subsidiaries re-
lated to activities that are financial in na-
ture (as defined in section 4(k) of the 
Bank Holding Company Act of 1956) and, 
if applicable, related to the ownership or 
control of one or more insured depository 
institutions, represents 85 percent or more 
of the consolidated assets of the corpora-
tion.’’. 
(b) APPLICABILITY OF CHAPTERS.—Section 103 of 
title 11, United States Code, is amended by adding at the 
end the following: 
‘‘(l) Subchapter V of chapter 11 of this title applies 
only in a case under chapter 11 concerning a covered fi-
nancial corporation.’’. 
(c) WHO MAY BE A DEBTOR.—Section 109 of title 
11, United States Code, is amended—
(1) in subsection (b)— 
(A) in paragraph (2), by striking ‘‘or’’ at 
the end; 
(B) in paragraph (3)(B), by striking the 
period at the end and inserting ‘‘; or’’; and 
(C) by adding at the end the following: 
‘‘(4) a covered financial corporation.’’; and 
(2) in subsection (d)— 
(A) by striking ‘‘and’’ before ‘‘an unin-
sured State member bank’’; 
(B) by striking ‘‘or’’ before ‘‘a corpora-
tion’’; and 
(C) by inserting ‘‘, or a covered financial 
corporation’’ after ‘‘Federal Deposit Insurance 
Corporation Improvement Act of 1991’’. 
(d) CONVERSION TO CHAPTER 7.—Section 1112 of 
title 11, United States Code, is amended by adding at the 
end the following: 
‘‘(g) Notwithstanding section 109(b), the court may 
convert a case under subchapter V to a case under chapter 
7 if— 
‘‘(1) a transfer approved under section 1185 
has been consummated; 
‘‘(2) the court has ordered the appointment of 
a special trustee under section 1186; and
‘‘(3) the court finds, after notice and a hearing, 
that conversion is in the best interest of the credi-
tors and the estate.’’. 
(e)(1) Section 726(a)(1) of title 11, United States 
Code, is amended by inserting after ‘‘first,’’ the following: 
‘‘in payment of any unpaid fees, costs, and expenses of 
a special trustee appointed under section 1186, and then’’. 
(2) Section 1129(a) of title 11, United States Code, 
is amended by inserting after paragraph (16) the fol-
lowing: 
‘‘(17) In a case under subchapter V, all payable 
fees, costs, and expenses of the special trustee have 
been paid or the plan provides for the payment of 
all such fees, costs, and expenses on the effective 
date of the plan. 
‘‘(18) In a case under subchapter V, confirma-
tion of the plan is not likely to cause serious adverse 
effects on financial stability in the United States.’’. 
(f) Section 322(b)(2) of title 11, United States Code, 
is amended by striking ‘‘The’’ and inserting ‘‘In cases 
under subchapter V, the United States trustee shall rec-
ommend to the court, and in all other cases, the’’.
SEC. 3. LIQUIDATION, REORGANIZATION, OR RECAPITAL-
IZATION OF A COVERED FINANCIAL COR-
PORATION. 
Chapter 11 of title 11, United States Code, is amend-
ed by adding at the end the following: 
‘‘SUBCHAPTER V—LIQUIDATION, REORGANIZA-
TION, OR RECAPITALIZATION OF A COV-
ERED FINANCIAL CORPORATION 
‘‘§ 1181. Inapplicability of other sections 
‘‘Sections 303 and 321(c) do not apply in a case 
under this subchapter concerning a covered financial cor-
poration. 
‘‘§ 1182. Definitions for this subchapter 
‘‘In this subchapter, the following definitions shall 
apply: 
‘‘(1) The term ‘Board’ means the Board of 
Governors of the Federal Reserve System. 
‘‘(2) The term ‘bridge company’ means a newly 
formed corporation to which property of the estate 
may be transferred under section 1185(a) and the 
equity securities of which may be transferred to a 
special trustee under section 1186(a). 
‘‘(3) The term ‘capital structure debt’ means all 
unsecured debt of the debtor for borrowed money for 
which the debtor is the primary obligor, other than 
a qualified financial contract and other than debt se-
cured by a lien on property of the estate that is to 
be transferred to a bridge company pursuant to an 
order of the court under section 1185(a). 
‘‘(4) The term ‘contractual right’ means a con-
tractual right of a kind defined in section 555, 556, 
559, 560, or 561. 
‘‘(5) The term ‘qualified financial contract’ 
means any contract of a kind defined in paragraph 
(25), (38A), (47), or (53B) of section 101, section 
741(7), or paragraph (4), (5), (11), or (13) of sec-
tion 761. 
‘‘(6) The term ‘special trustee’ means the trust-
ee of a trust formed under section 1186(a)(1). 
‘‘§ 1183. Commencement of a case concerning a cov-
ered financial corporation 
‘‘(a) A case under this subchapter concerning a cov-
ered financial corporation may be commenced by the filing 
of a petition with the court— 
‘‘(1) by the debtor under section 301 only if the 
debtor states to the best of its knowledge under pen-
alty of perjury in the petition that it is a covered fi-
nancial corporation; or 
‘‘(2) by the Board only if the Board states to 
the best of its knowledge under penalty of perjury 
in the petition that—
‘‘(A) the debtor is a covered financial cor-
poration that— 
‘‘(i) has incurred losses that will de-
plete all or substantially all of the capital 
of the covered financial corporation, and 
there is no reasonable prospect for the cov-
ered financial corporation to avoid such de-
pletion; 
‘‘(ii) is insolvent; 
‘‘(iii) is not paying, or is unable to 
pay, the debts of the covered financial cor-
poration (other than debts subject to a 
bona fide dispute as to liability or amount) 
as they become due; or 
‘‘(iv) is likely to be in a financial con-
dition specified in clause (i), (ii), or (iii) 
sufficiently soon such that the immediate 
commencement of a case under this sub-
chapter is necessary to prevent serious ad-
verse effects on financial stability in the 
United States; and 
‘‘(B) the commencement of a case under 
this title and effecting a transfer under section 
1185 is necessary to prevent serious adverse ef-
fects on financial stability in the United States.
‘‘(b)(1) Unless the debtor consents to an order for 
relief, the court shall hold a hearing on the Board’s peti-
tion under subsection (a)(2) as soon as practicable but not 
later than 16 hours after the Board files such a petition, 
with notice only to— 
‘‘(A) the covered financial corporation; 
‘‘(B) the Federal Deposit Insurance Corpora-
tion; 
‘‘(C) the Office of the Comptroller of the Cur-
rency of the Department of the Treasury; and 
‘‘(D) the Secretary of the Treasury. 
‘‘(2) Only the Board and the entities specified in 
paragraph (1) and their counsel may participate in a hear-
ing described in this subsection. The Board or the trustee 
may request that pleadings, hearings, transcripts, and or-
ders in connection with a hearing described in this sub-
section be sealed if their disclosure could create financial 
instability in the United States. 
‘‘(3) All pleadings, hearings, transcripts, and orders 
sealed under paragraph (2) shall be available to only the 
court, the appellate panel, the covered financial corpora-
tion, the Federal Deposit Insurance Corporation, the Of-
fice of the Comptroller of the Currency of the Department 
of the Treasury, the Secretary of the Treasury, and the 
Board. Notwithstanding paragraph (2), if the case is dis-
missed, all court documents, including pleadings, hearings, 
transcripts, and orders, shall be permanently sealed. 
‘‘(c)(1) The commencement of a case under sub-
section (a)(1) constitutes an order for relief under this 
subchapter. 
‘‘(2) In a case commenced under subsection (a)(2), 
after notice and hearing required under subsection (b) and 
not later than 18 hours after the filing of the Board’s peti-
tion, the court shall enter— 
‘‘(A) an order for relief— 
‘‘(i) if the Board has shown at the hearing 
under this subsection that the requirements 
under subsection (a)(2) are supported by a pre-
ponderance of the evidence; or 
‘‘(ii) if the debtor consents to the Board’s 
petition under subsection (a)(2); or 
‘‘(B) an order dismissing the case. 
‘‘(d)(1) The covered financial corporation or the 
Board may appeal to the court of appeals from an order 
entered by the court under subsection (c)(2) not later than 
1 hour after the court enters such order, with notice only 
to the entities specified in subsection (b)(1) and the 
Board. Such order shall be stayed pending such appeal. 
‘‘(2) The appellate panel specified under section 
298(c)(1) of title 28 for the judicial circuit in which the
case is pending shall hear the appeal under paragraph (1) 
within 12 hours of the filing of the notice of appeal under 
this subsection. The standard of review shall be abuse of 
discretion. The appellate panel shall enter an order deter-
mining the matter that is the subject of the appeal not 
later than 14 hours after the notice of appeal is filed. 
‘‘(3) The court may not, on account of an appeal 
from an order for relief under section 1183(d)(1), delay 
any proceeding under section 1185, except that the court 
shall not authorize a transfer under section 1185 before 
the determination of the appeal. 
‘‘(e) The members of the board of directors (or body 
performing similar functions) of a covered financial com-
pany shall have no liability to shareholders, creditors or 
other parties in interest for a good faith filing or con-
senting in good faith to a petition with respect to a case 
under this subchapter, or for any reasonable action taken 
in good faith in contemplation of or in connection with 
such a petition or a transfer under section 1185 or section 
1186, whether prior to or after commencement of the case. 
‘‘(f) Counsel to the debtor or the Board shall provide, 
to the greatest extent practicable, sufficient confidential 
notice to the Office of Court Services of the Administrative 
Office of the United States Courts regarding the potential 
commencement of a subchapter V case without disclosing
the identity of the potential debtor in order to allow such 
office to randomly designate and ensure the ready avail-
ability of one of the bankruptcy judges designated under 
section 298(b)(1) of title 28 to be available to preside over 
such subchapter V case. 
‘‘§ 1184. Regulators 
‘‘The Board, the Securities Exchange Commission, 
the Office of the Comptroller of the Currency of the De-
partment of the Treasury, and the Federal Deposit Insur-
ance Corporation may raise and may appear and be heard 
on any issue in any case or proceeding under this sub-
chapter. 
‘‘§ 1185. Special transfer of property of the estate 
‘‘(a) On request of the trustee or the Board, and after 
notice and a hearing that shall occur not less than 24 
hours after the order for relief, the court may order a 
transfer under this section of property of the estate, and 
the assignment of executory contracts, unexpired leases, 
and qualified financial contracts of the debtor, to a bridge 
company. Upon the entry of an order approving such 
transfer, any property transferred, and any executory con-
tracts, unexpired leases, and qualified financial contracts 
assigned under such order shall no longer be property of 
the estate. Except as provided under this section, the pro-
visions of sections 363 and 365 shall apply to a transfer 
and assignment under this section. 
‘‘(b) Unless the court orders otherwise, notice of a 
request for an order under subsection (a) shall consist of 
electronic or telephonic notice of not less than 24 hours 
to— 
‘‘(1) the debtor; 
‘‘(2) the holders of the 20 largest secured 
claims against the debtor; 
‘‘(3) the holders of the 20 largest unsecured 
claims against the debtor; 
‘‘(4) counterparties to any debt, executory con-
tract, unexpired lease, and qualified financial con-
tract requested to be transferred under this section; 
‘‘(5) the Board; 
‘‘(6) the Federal Deposit Insurance Corpora-
tion; 
‘‘(7) the Secretary of the Treasury and the Of-
fice of the Comptroller of the Currency of the Treas-
ury; 
‘‘(8) the Securities and Exchange Commission; 
‘‘(9) the United States trustee or bankruptcy 
administrator; and 
‘‘(10) each primary financial regulatory agency, 
as defined in section 2(12) of the Dodd-Frank Wall