232
resulted from circumstances beyond the control 
of the debtor not foreseeable at the time the 
case then pending was filed; and 
‘‘(ii) it is more likely than not that the 
court will confirm a feasible plan, but not a liq-
uidating plan, within a reasonable period of 
time.’’.
SEC. 442. EXPANDED GROUNDS FOR DISMISSAL OR CON-
VERSION AND APPOINTMENT OF TRUSTEE. 
(a) EXPANDED GROUNDS FOR DISMISSAL OR CON-
VERSION.—Section 1112 of title 11, United States Code, 
is amended by striking subsection (b) and inserting the 
following: 
‘‘(b)(1) Except as provided in paragraph (2) of this 
subsection, subsection (c) of this section, and section 
1104(a)(3), on request of a party in interest, and after 
notice and a hearing, absent unusual circumstances spe-
cifically identified by the court that establish that the re-
quested conversion or dismissal is not in the best interests 
of creditors and the estate, the court shall convert a case 
under this chapter to a case under chapter 7 or dismiss 
a case under this chapter, whichever is in the best inter-
ests of creditors and the estate, if the movant establishes 
cause.
233
‘‘(2) The relief provided in paragraph (1) shall not 
be granted absent unusual circumstances specifically iden-
tified by the court that establish that such relief is not 
in the best interests of creditors and the estate, if the 
debtor or another party in interest objects and establishes 
that—
‘‘(A) there is a reasonable likelihood that a plan 
will be confirmed within the timeframes established 
in sections 1121(e) and 1129(e) of this title, or if 
such sections do not apply, within a reasonable pe-
riod of time; and 
‘‘(B) the grounds for granting such relief in-
clude an act or omission of the debtor other than 
under paragraph (4)(A)—
‘‘(i) for which there exists a reasonable 
justification for the act or omission; and 
‘‘(ii) that will be cured within a reasonable 
period of time fixed by the court. 
‘‘(3) The court shall commence the hearing on a mo-
tion under this subsection not later than 30 days after 
filing of the motion, and shall decide the motion not later 
than 15 days after commencement of such hearing, unless 
the movant expressly consents to a continuance for a spe-
cific period of time or compelling circumstances prevent
234
the court from meeting the time limits established by this 
paragraph. 
‘‘(4) For purposes of this subsection, the term ‘cause’ 
includes—
‘‘(A) substantial or continuing loss to or dimi-
nution of the estate and the absence of a reasonable 
likelihood of rehabilitation; 
‘‘(B) gross mismanagement of the estate; 
‘‘(C) failure to maintain appropriate insurance 
that poses a risk to the estate or to the public; 
‘‘(D) unauthorized use of cash collateral sub-
stantially harmful to 1 or more creditors; 
‘‘(E) failure to comply with an order of the 
court; 
‘‘(F) unexcused failure to satisfy timely any fil-
ing or reporting requirement established by this title 
or by any rule applicable to a case under this chap-
ter; 
‘‘(G) failure to attend the meeting of creditors 
convened under section 341(a) or an examination or-
dered under rule 2004 of the Federal Rules of 
Bankruptcy Procedure without good cause shown by 
the debtor;
235
‘‘(H) failure timely to provide information or 
attend meetings reasonably requested by the United 
States trustee or the bankruptcy administrator; 
‘‘(I) failure timely to pay taxes owed after the 
date of the order for relief or to file tax returns due 
after the order for relief; 
‘‘(J) failure to file a disclosure statement, or to 
file or confirm a plan, within the time fixed by this 
title or by order of the court; 
‘‘(K) failure to pay any fees or charges required 
under chapter 123 of title 28; 
‘‘(L) revocation of an order of confirmation 
under section 1144; 
‘‘(M) inability to effectuate substantial con-
summation of a confirmed plan; 
‘‘(N) material default by the debtor with re-
spect to a confirmed plan; 
‘‘(O) termination of a confirmed plan by reason 
of the occurrence of a condition specified in the plan; 
and 
‘‘(P) failure of the debtor to pay any domestic 
support obligation that first becomes payable after 
the date on which the petition is filed. 
‘‘(5) The court shall commence the hearing on a mo-
tion under this subsection not later than 30 days after
236
filing of the motion, and shall decide the motion not later 
than 15 days after commencement of such hearing, unless 
the movant expressly consents to a continuance for a spe-
cific period of time or compelling circumstances prevent 
the court from meeting the time limits established by this 
paragraph.’’. 
(b) ADDITIONAL GROUNDS FOR APPOINTMENT OF 
TRUSTEE.—Section 1104(a) of title 11, United States 
Code, is amended—
(1) in paragraph (1), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (2), by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(3) if grounds exist to convert or dismiss the 
case under section 1112, but the court determines 
that the appointment of a trustee or an examiner is 
in the best interests of creditors and the estate.’’. 
SEC. 443. STUDY OF OPERATION OF TITLE 11, UNITED 
STATES CODE, WITH RESPECT TO SMALL 
BUSINESSES. 
Not later than 2 years after the date of enactment 
of this Act, the Administrator of the Small Business Ad-
ministration, in consultation with the Attorney General, 
the Director of the Executive Office for United States
237
Trustees, and the Director of the Administrative Office 
of the United States Courts, shall—
(1) conduct a study to determine—
(A) the internal and external factors that 
cause small businesses, especially sole propri-
etorships, to become debtors in cases under title 
11, United States Code, and that cause certain 
small businesses to successfully complete cases 
under chapter 11 of such title; and 
(B) how Federal laws relating to bank-
ruptcy may be made more effective and efficient 
in assisting small businesses to remain viable; 
and 
(2) submit to the President pro tempore of the 
Senate and the Speaker of the House of Representa-
tives a report summarizing that study. 
SEC. 444. PAYMENT OF INTEREST. 
Section 362(d)(3) of title 11, United States Code, is 
amended—
(1) by inserting ‘‘or 30 days after the court de-
termines that the debtor is subject to this para-
graph, whichever is later’’ after ‘‘90-day period)’’; 
and 
(2) by striking subparagraph (B) and inserting 
the following:
238
‘‘(B) the debtor has commenced monthly 
payments that—
‘‘(i) may, in the debtor’s sole discre-
tion, notwithstanding section 363(c)(2), be 
made from rents or other income generated 
before or after the commencement of the 
case by or from the property to each cred-
itor whose claim is secured by such real es-
tate (other than a claim secured by a judg-
ment lien or by an unmatured statutory 
lien); and 
‘‘(ii) are in an amount equal to inter-
est at the then applicable nondefault con-
tract rate of interest on the value of the 
creditor’s interest in the real estate; or’’. 
SEC. 445. PRIORITY FOR ADMINISTRATIVE EXPENSES. 
Section 503(b) of title 11, United States Code, is 
amended—
(1) in paragraph (5), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (6), by striking the period at 
the end and inserting a semicolon; and 
(3) by adding at the end the following: 
‘‘(7) with respect to a nonresidential real prop-
erty lease previously assumed under section 365,
239
and subsequently rejected, a sum equal to all mone-
tary obligations due, excluding those arising from or 
relating to a failure to operate or a penalty provi-
sion, for the period of 2 years following the later of 
the rejection date or the date of actual turnover of 
the premises, without reduction or setoff for any 
reason whatsoever except for sums actually received 
or to be received from a nondebtor, and the claim 
for remaining sums due for the balance of the term 
of the lease shall be a claim under section 
502(b)(6);’’.
SEC. 446. DUTIES WITH RESPECT TO A DEBTOR WHO IS A 
PLAN ADMINISTRATOR OF AN EMPLOYEE 
BENEFIT PLAN. 
(a) IN GENERAL.—Section 521(a) of title 11, United 
States Code, as amended by section 106, is amended-
(1) in paragraph (4), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (5), by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(6) unless a trustee is serving in the case, if 
at the time of filing the debtor served as the admin-
istrator (as defined in section 3 of the Employee Re-
tirement Income Security Act of 1974 of an em-
240
ployee benefit plan, continue to perform the obliga-
tions required of the administrator.’’. 
(b) DUTIES OF TRUSTEES.—Section 704(a) of title 
11, United States Code, as amended by sections 102 and 
219, is amended—
(1) in paragraph (9), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (10), by striking the period at 
the end; and 
(3) by adding at the end the following: 
‘‘(11) if, at the time of the commencement of 
the case, the debtor served as the administrator (as 
defined in section 3 of the Employee Retirement In-
come Security Act of 1974) of an employee benefit 
plan, continue to perform the obligations required of 
the administrator; and’’. 
(c) CONFORMING AMENDMENT.—Section 1106(a)(1) 
of title 11, United States Code, is amended to read as 
follows: 
‘‘(1) perform the duties of the trustee, as speci-
fied in paragraphs (2), (5), (7), (8), (9), (10), and 
(11) of section 704;’’.
241
SEC. 447. APPOINTMENT OF COMMITTEE OF RETIRED EM-
PLOYEES. 
Section 1114(d) of title 11, United States Code, is 
amended—
(1) by striking ‘‘appoint’’ and inserting ‘‘order 
the appointment of’’, and 
(2) by adding at the end the following: ‘‘The 
United States trustee shall appoint any such com-
mittee.’’. 
TITLE V—MUNICIPAL 
BANKRUPTCY PROVISIONS 
SEC. 501. PETITION AND PROCEEDINGS RELATED TO PETI-
TION. 
(a) TECHNICAL AMENDMENT RELATING TO MUNICI-
PALITIES.—Section 921(d) of title 11, United States 
Code, is amended by inserting ‘‘notwithstanding section 
301(b)’’ before the period at the end. 
(b) CONFORMING AMENDMENT.—Section 301 of title 
11, United States Code, is amended—
(1) by inserting ‘‘(a)’’ before ‘‘A voluntary’’; 
and 
(2) by striking the last sentence and inserting 
the following: 
‘‘(b) The commencement of a voluntary case under 
a chapter of this title constitutes an order for relief under 
such chapter.’’.
242
SEC. 502. APPLICABILITY OF OTHER SECTIONS TO CHAP-
TER 9. 
Section 901(a) of title 11, United States Code, is 
amended—
(1) by inserting ‘‘555, 556,’’ after ‘‘553,’’; and 
(2) by inserting ‘‘559, 560, 561, 562’’ after 
‘‘557,’’. 
TITLE VI—BANKRUPTCY DATA 
SEC. 601. IMPROVED BANKRUPTCY STATISTICS. 
(a) IN GENERAL.—Chapter 6 of title 28, United 
States Code, is amended by adding at the end the fol-
lowing: 
‘‘§ 159. Bankruptcy statistics 
‘‘(a) The clerk of the district court, or the clerk of 
the bankruptcy court if one is certified pursuant to section 
156(b) of this title, shall collect statistics regarding debt-
ors who are individuals with primarily consumer debts 
seeking relief under chapters 7, 11, and 13 of title 11. 
Those statistics shall be in a standardized format pre-
scribed by the Director of the Administrative Office of the 
United States Courts (referred to in this section as the 
‘Director’). 
‘‘(b) The Director shall—
‘‘(1) compile the statistics referred to in sub-
section (a);
243
‘‘(2) make the statistics available to the public; 
and 
‘‘(3) not later than June 1, 2005, and annually 
thereafter, prepare, and submit to Congress a report 
concerning the information collected under sub-
section (a) that contains an analysis of the informa-
tion. 
‘‘(c) The compilation required under subsection (b) 
shall—
‘‘(1) be itemized, by chapter, with respect to 
title 11; 
‘‘(2) be presented in the aggregate and for each 
district; and 
‘‘(3) include information concerning—
‘‘(A) the total assets and total liabilities of 
the debtors described in subsection (a), and in 
each category of assets and liabilities, as re-
ported in the schedules prescribed pursuant to 
section 2075 of this title and filed by those 
debtors; 
‘‘(B) the current monthly income, average 
income, and average expenses of those debtors 
as reported on the schedules and statements 
that each such debtor files under sections 521 
and 1322 of title 11;