I 
113TH CONGRESS 
2D SESSION 
H. R. 5421 
To amend title 11 of the United States Code in order to facilitate the 
resolution of an insolvent financial institution in bankruptcy. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 9, 2014 
Mr. BACHUS (for himself, Mr. GOODLATTE, and Mr. CONYERS) introduced the 
following bill; which was referred to the Committee on the Judiciary 
A BILL 
To amend title 11 of the United States Code in order to 
facilitate the resolution of an insolvent financial institu-
tion in bankruptcy. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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): 
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‘‘(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 
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‘‘(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 
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(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’’. 
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(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: 
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‘‘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, 
other than a qualified financial contract, for which 
the debtor is the primary obligor 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). 
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‘‘(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— 
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‘‘(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-
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