286
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;
287
‘‘(4) ‘foreign main proceeding’ means a foreign
proceeding pending 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, pending 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
288
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.
289
‘‘(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.
290
‘‘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
291
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.
292
‘‘(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, except that the claim of a foreign creditor 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 creditor.
‘‘(2)(A) Subsection (a) and paragraph (1) do not
change or codify present law as to the allowability of for-
293
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, such notification shall—
294
‘‘(1) indicate the time period for filing proofs of
claim and specify the place for filing such proofs of
claim;
‘‘(2) indicate whether secured creditors need to
file proofs of claim; and
‘‘(3) contain any other information required to
be included in such 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 proof of claim shall provide
such additional time to creditors with foreign addresses
as is reasonable 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 a 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 such foreign proceeding and appointing the
foreign representative;
295
‘‘(2) a certificate from the foreign court affirm-
ing the existence of such 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 such foreign
proceeding and of the appointment of the foreign
representative.
‘‘(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.
296
‘‘(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) such 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) Such foreign proceeding shall be recognized—
‘‘(1) as a foreign main proceeding if it is pend-
ing 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.
297
‘‘(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. A 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 a 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
such foreign proceeding or the status of the foreign
representative’s appointment; and
‘‘(2) any other foreign proceeding regarding the
debtor that becomes known to the foreign represent-
ative.
298
‘‘§ 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.
299
‘‘(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 the property of the debtor that is
within the territorial jurisdiction of the United
States;
‘‘(2) sections 363, 549, and 552 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 sections would
apply to property of an estate;
300
‘‘(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
301
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).
302
‘‘(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.
303
‘‘§ 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), 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).
304
‘‘(b) When a 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 a foreign
court or a foreign representative, either directly or
through the trustee.
‘‘(b) The court is entitled to communicate directly
with, or to request information or assistance directly from,
a foreign court or a foreign representative, subject to the
rights of a party in interest to notice and participation.
305
‘‘§ 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 a foreign court
or a foreign representative.
‘‘(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 a for-
eign court or a foreign representative.
‘‘§ 1527. Forms of cooperation
‘‘Cooperation referred to in sections 1525 and 1526
may be implemented by any appropriate means,
including—
‘‘(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.
306
‘‘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 pending concurrently regarding
the same debtor, the court shall seek cooperation and co-
ordination under sections 1525, 1526, and 1527, and the
following shall apply:
307
‘‘(1) If the case in the United States pending
at the time the petition for recognition of such for-
eign 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) section 1520 does not apply even if
such foreign proceeding is recognized as a for-
eign main proceeding.
‘‘(2) If a case in the United States under this
title commences after recognition, or after the date
of the filing of the petition for recognition, of such
foreign proceeding—
‘‘(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 such 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-
308
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-
309
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.’’.
310
(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
311
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 such 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
312
‘‘Except with respect to a case under chapter 15 of
title 11, nothing in’’.
(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.’’.
313
(d) OTHER SECTIONS OF TITLE 11.—Title 11 of the
United States Code is amended—
(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 for rec-
ognition of a foreign proceeding has been granted;
and
314
‘‘(B) the purposes of chapter 15 of this title
would be best served by such dismissal or suspen-
sion.’’; and
(7) in section 508—
(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.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(D) of the Federal Deposit
Insurance 
Act 
(12 
U.S.C. 
1821(e)(8)(D)) 
is
amended—
(A) by striking ‘‘subsection—’’ and insert-
ing ‘‘subsection, the following definitions shall
apply:’’; and
(B) in clause (i), by inserting ‘‘, resolution,
or order’’ after ‘‘any similar agreement that the
Corporation determines by regulation’’.
315
(2) 
INSURED
CREDIT
UNIONS.—Section
207(c)(8)(D) of the Federal Credit Union Act (12
U.S.C. 1787(c)(8)(D)) is amended—
(A) by striking ‘‘subsection—’’ and insert-
ing ‘‘subsection, the following definitions shall
apply:’’; and
(B) in clause (i), by inserting ‘‘, resolution,
or order’’ after ‘‘any similar agreement that the
Board determines by regulation’’.
(b) DEFINITION OF SECURITIES CONTRACT.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(D)(ii) of the Federal De-
posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(ii)) is
amended to read as follows:
‘‘(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,
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
316
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;
‘‘(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-
317
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;
‘‘(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
318
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-
imbursement obligation in connection
with any agreement or transaction re-
ferred to in this clause.’’.
(2) 
INSURED
CREDIT
UNIONS.—Section
207(c)(8)(D)(ii) of the Federal Credit Union Act
(12 U.S.C. 1787(c)(8)(D)(ii)) is amended to read as
follows:
319
‘‘(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,
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 Board deter-
mines by regulation, resolution, or
320
order to include any such agreement
within the meaning of such term;
‘‘(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;
321
‘‘(VII) means any combination of
the agreements or transactions re-
ferred to in this clause;
‘‘(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
322
enhancement related to any agree-
ment or transaction referred to in this
clause, including any guarantee or re-
imbursement obligation in connection
with any agreement or transaction re-
ferred to in this clause.’’.
(c) DEFINITION OF COMMODITY CONTRACT.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(D)(iii) of the Federal De-
posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iii)) is
amended to read as follows:
‘‘(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;
323
‘‘(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
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-
324
action referred to in subclause (I),
(II), (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 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.’’.
325
(2) 
INSURED
CREDIT
UNIONS.—Section
207(c)(8)(D)(iii) of the Federal Credit Union Act
(12 U.S.C. 1787(c)(8)(D)(iii)) is amended to read as
follows:
‘‘(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
rules of, a contract market or board
of trade that is cleared by such clear-
ing organization, or commodity option
326
traded on, or subject to the rules of,
a contract market or board of trade
that is cleared by suchclearing organi-
zation;
‘‘(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-
out regard to whether the master
agreement provides for an agreement
or transaction that is not a com-
327
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.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(D)(iv) of the Federal De-
posit 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—
328
‘‘(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-
329
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.’’.
(2) 
INSURED
CREDIT
UNIONS.—Section
207(c)(8)(D)(iv) of the Federal Credit Union Act
330
(12 U.S.C. 1787(c)(8)(D)(iv)) is amended to read as
follows:
‘‘(iv) 
FORWARD
CONTRACT.—The
term ‘forward contract’ means—
‘‘(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);
331
‘‘(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-
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
332
or transaction referred to in any such
subclause.’’.
(e) DEFINITION OF REPURCHASE AGREEMENT.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(D)(v) of the Federal De-
posit Insurance 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
333
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
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);
334
‘‘(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
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-
335
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-
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).’’.
(2) 
INSURED
CREDIT
UNIONS.—Section
207(c)(8)(D)(v) of the Federal Credit Union Act (12
U.S.C. 1787(c)(8)(D)(v)) is amended to read as fol-
lows:
‘‘(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
336
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
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
337
the Board determines by regulation,
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
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
338
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-
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.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(D)(vi) of the Federal De-
posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(vi)) is
amended to read as follows:
339
‘‘(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
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;
340
‘‘(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
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;
341
‘‘(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
‘‘(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-
342
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.’’.
(2) 
INSURED
CREDIT
UNIONS.—Section
207(c)(8)(D) of the Federal Credit Union Act (12
U.S.C. 1787(c)(8)(D)) is amended by adding at the
end the following new clause:
‘‘(vi) SWAP AGREEMENT.—The term
‘swap agreement’ means—
343
‘‘(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
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
344
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,future, or option on one or more
rates, currencies, commodities, equity
securities or other equity instruments,
debt securities or other debt instru-
ments, quantitative measures associ-
ated with an occurrence, extent of an
occurrence, or contingency associated
with a financial, commercial, or eco-
nomic consequence, or economic or fi-
nancial indices or measures of eco-
nomic or financial 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;
345
‘‘(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
‘‘(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.
346
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.’’.
(g) DEFINITION OF TRANSFER.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(D)(viii) of the Federal De-
posit 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
347
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.’’.
(2) 
INSURED
CREDIT
UNIONS.—Section
207(c)(8)(D) of the Federal Credit Union Act (12
U.S.C. 1787(c)(8)(D)) (as amended by subsection
(f) of this section) is amended by adding at the end
the following new clause:
‘‘(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.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(e)(8)) is amended—
(A) in subparagraph (A)—
(i) by striking ‘‘paragraph (10)’’ and
inserting ‘‘paragraphs (9) and (10)’’;
348
(ii) in clause (i), by striking ‘‘to cause
the termination or liquidation’’ and insert-
ing ‘‘such person has to cause the termi-
nation, liquidation, or acceleration’’; and
(iii) by striking clause (ii) and insert-
ing the following new clause:
‘‘(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);’’; and
(B) 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);’’.
(2) 
INSURED
CREDIT
UNIONS.—Section
207(c)(8) of the Federal Credit Union Act (12
U.S.C. 1787(c)(8)) is amended—
(A) in subparagraph (A)—
(i) by striking ‘‘paragraph (12)’’ and
inserting ‘‘paragraphs (9) and (10)’’;
349
(ii) in clause (i), by striking ‘‘to cause
the termination or liquidation’’ and insert-
ing ‘‘such person has to cause the termi-
nation, liquidation, or acceleration’’; and
(iii) by striking clause (ii) and insert-
ing the following new clause:
‘‘(ii) any right under any security
agreement or arrangement or other credit
enhancement related to 1 or more qualified
financial contracts described in clause
(i);’’; and
(B) in subparagraph (E), by striking
clause (ii) and inserting the following new
clause:
‘‘(ii) any right under any security
agreement or arrangement or other credit
enhancement related to 1 or more qualified
financial contracts described in clause
(i);’’.
(i) AVOIDANCE OF TRANSFERS.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(C)(i) of the Federal De-
posit 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
350
or State law relating to the avoidance of preferential
or fraudulent transfers,’’ before ‘‘the Corporation’’.
(2) 
INSURED
CREDIT
UNIONS.—Section
207(c)(8)(C)(i) of the Federal Credit Union Act (12
U.S.C. 1787(c)(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 trans-
fers,’’ before ‘‘the Board’’.
SEC. 902. AUTHORITY OF THE FDIC AND NCUAB WITH RE-
SPECT TO FAILED AND FAILING INSTITU-
TIONS.
(a) FEDERAL DEPOSIT INSURANCE CORPORATION.—
(1) IN GENERAL.—Section 11(e)(8) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1821(e)(8))
is amended—
(A) in subparagraph (E), by striking
‘‘other than paragraph (12) of this subsection,
subsection (d)(9)’’ and inserting ‘‘other than
subsections (d)(9) and (e)(10)’’; and
(B) by adding at the end the following new
subparagraphs:
‘‘(F) CLARIFICATION.—No provision of law
shall be construed as limiting the right or
power of the Corporation, or authorizing any
351
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.
‘‘(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
352
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.’’.
(2) TECHNICAL
AND
CONFORMING
AMEND-
MENT.—Section 11(e)(12)(A) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(e)(12)(A)) is amend-
ed by inserting ‘‘or the exercise of rights or powers
by’’ after ‘‘the appointment of’’.
(b) NATIONAL
CREDIT
UNION
ADMINISTRATION
BOARD.—
(1) IN
GENERAL.—Section 207(c)(8) of the
Federal Credit Union Act (12 U.S.C. 1787(c)(8)) is
amended—
(A) in subparagraph (E) (as amended by
section 901(h)), by striking ‘‘other than para-
graph (12) of this subsection, subsection
(b)(9)’’ and inserting ‘‘other than subsections
(b)(9) and (c)(10)’’; and
(B) by adding at the end the following new
subparagraphs:
‘‘(F) CLARIFICATION.—No provision of law
shall be construed as limiting the right or
353
power of the Board, or authorizing any court or
agency to limit or delay, in any manner, the
right or power of the Board to transfer any
qualified financial contract in accordance with
paragraphs (9) and (10) of this subsection or to
disaffirm or repudiate any such contract in ac-
cordance with subsection (c)(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 credit union
in default.
‘‘(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
354
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.’’.
(2) TECHNICAL
AND
CONFORMING
AMEND-
MENT.—Section 207(c)(12)(A) of the Federal Credit
Union Act (12 U.S.C. 1787(c)(12)(A)) is amended
by inserting ‘‘or the exercise of rights or powers by’’
after ‘‘the appointment of’’.
SEC. 903. AMENDMENTS RELATING TO TRANSFERS OF
QUALIFIED FINANCIAL CONTRACTS.
(a) FDIC-INSURED DEPOSITORY INSTITUTIONS.—
(1) TRANSFERS
OF
QUALIFIED
FINANCIAL
CONTRACTS 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:
‘‘(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—
355
‘‘(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
proceeding—
‘‘(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
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
356
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
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
357
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.
‘‘(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
358
Deposit Insurance Corporation Improvement
Act of 1991.’’.
(2) NOTICE
TO
QUALIFIED
FINANCIAL
CON-
TRACT 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 imme-
diately following clause (ii) by striking ‘‘the conser-
vator’’ 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 ap-
pointment of the receiver in the case of a receiver-
ship, or the business day following such transfer in
the case of a conservatorship.’’.
(3) RIGHTS AGAINST RECEIVER AND CONSER-
VATOR AND TREATMENT OF BRIDGE BANKS.—Sec-
tion 11(e)(10) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(e)(10)) is amended—
(A) by redesignating subparagraph (B) as
subparagraph (D); and
(B) by inserting after subparagraph (A)
the following new subparagraphs:
‘‘(B) CERTAIN
RIGHTS
NOT
ENFORCE-
ABLE.—
359
‘‘(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
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
360
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-
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
361
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.’’.
(b) INSURED CREDIT UNIONS.—
(1) TRANSFERS OF QUALIFIED FINANCIAL CON-
TRACTS
TO
FINANCIAL
INSTITUTIONS.—Section
207(c)(9) of the Federal Credit Union Act (12
U.S.C. 1787(c)(9)) is amended to read as follows:
‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON-
TRACTS.—
‘‘(A) IN GENERAL.—In making any trans-
fer of assets or liabilities of a credit union in
default which includes any qualified financial
362
contract, the conservator or liquidating agent
for such credit union shall either—
‘‘(i) transfer to 1 financial institution,
other than a financial institution for which
a conservator, receiver, trustee in bank-
ruptcy, or other legal custodian has been
appointed or which is otherwise the subject
of a bankruptcy or insolvency proceeding—
‘‘(I) all qualified financial con-
tracts between any person or any af-
filiate of such person and the credit
union in default;
‘‘(II) all claims of such person or
any affiliate of such person against
such credit union under any such con-
tract (other than any claim which,
under the terms of any such contract,
is subordinated to the claims of gen-
eral unsecured creditors of such credit
union);
‘‘(III) all claims of such credit
union against such person or any af-
filiate of such person under any such
contract; and
363
‘‘(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 liquidating agent for the credit union shall
not make such transfer to a foreign bank, fi-
nancial institution organized under the laws of
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
364
credit enhancement related to 1 or more quali-
fied financial contracts, the contractual rights
of the parties to such qualified financial con-
tracts, netting contracts, security agreements or
arrangements, or other credit enhancements 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 liqui-
dating agent transfers any qualified financial
contract and related claims, property, and cred-
it enhancements pursuant to subparagraph
(A)(i) and such contract is cleared by or subject
to the rules of a clearing organization, the
clearing organization shall not be required to
accept the transferee as a member by virtue of
the transfer.
‘‘(D) DEFINITIONS.—For purposes of this
paragraph—
‘‘(i) the term ‘financial institution’
means a broker or dealer, a depository in-
stitution, a futures commission merchant,
a credit union, or any other institution, as
365
determined by the Board by regulation to
be a financial institution; and
‘‘(ii) the term ‘clearing organization’
has the same meaning as in section 402 of
the Federal Deposit Insurance Corporation
Improvement Act of 1991.’’.
(2) NOTICE
TO
QUALIFIED
FINANCIAL
CON-
TRACT COUNTERPARTIES.—Section 207(c)(10)(A) of
the 
Federal 
Credit 
Union 
Act 
(12 
U.S.C.
1787(c)(10)(A)) is amended in the material imme-
diately following clause (ii) by striking ‘‘the conser-
vator’’ and all that follows through the period and
inserting the following: ‘‘the conservator or liqui-
dating agent 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 liquidating agent in the
case of a liquidation, or the business day following
such transfer in the case of a conservatorship.’’.
(3) RIGHTS AGAINST LIQUIDATING AGENT AND
CONSERVATOR
AND
TREATMENT
OF
BRIDGE
BANKS.—Section 207(c)(10) of the Federal Credit
Union Act (12 U.S.C. 1787(c)(10)) is amended—
(A) by redesignating subparagraph (B) as
subparagraph (D); and
366
(B) by inserting after subparagraph (A)
the following new subparagraphs:
‘‘(B) CERTAIN
RIGHTS
NOT
ENFORCE-
ABLE.—
‘‘(i) LIQUIDATION.—A person who is
a party to a qualified financial contract
with an insured credit union may not exer-
cise any right that such person has to ter-
minate, liquidate, or net such contract
under paragraph (8)(A) of this subsection
or section 403 or 404 of the Federal De-
posit Insurance Corporation Improvement
Act of 1991, solely by reason of or inci-
dental to the appointment of a liquidating
agent for the credit union institution (or
the insolvency or financial condition of the
credit union for which the liquidating
agent has been appointed)—
‘‘(I) until 5:00 p.m. (eastern
time) on the business day following
the date of the appointment of the liq-
uidating agent; or
‘‘(II) after the person has re-
ceived notice that the contract has
367
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 credit union may not
exercise any right that such person has to
terminate, liquidate, or net such contract
under paragraph (8)(E) of this subsection
or section 403 or 404 of the Federal De-
posit Insurance Corporation Improvement
Act of 1991, solely by reason of or inci-
dental to the appointment of a conservator
for the credit union or the insolvency or fi-
nancial condition of the credit union for
which the conservator has been appointed).
‘‘(iii) NOTICE.—For purposes of this
paragraph, the Board as conservator or
liquidating agent of an insured credit
union shall be deemed to have notified a
person who is a party to a qualified finan-
cial contract with such credit union if the
Board has taken steps reasonably cal-
culated to provide notice to such person by
the time specified in subparagraph (A).
368
‘‘(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 credit union organized by the
Board, for which a conservator is ap-
pointed either—
‘‘(I) immediately upon the orga-
nization of the credit union; or
‘‘(II) at the time of a purchase
and assumption transaction between
the credit union and the Board as re-
ceiver for a credit union in default.’’.
SEC. 904. AMENDMENTS RELATING TO DISAFFIRMANCE OR
REPUDIATION 
OF 
QUALIFIED 
FINANCIAL
CONTRACTS.
(a) FDIC-INSURED DEPOSITORY INSTITUTIONS.—
Section 11(e) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)) is amended—
369
(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
(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-
370
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.’’.
(b) INSURED CREDIT UNIONS.—Section 207(c) of
the Federal Credit Union Act (12 U.S.C. 1787(c)) is
amended—
(1) by redesignating paragraphs (11), (12), and
(13) as paragraphs (12), (13), and (14), respec-
tively;
(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 liquidating agent with respect to any
qualified financial contract to which an insured cred-
it union is a party, the conservator or liquidating
agent for such credit union shall either—
371
‘‘(A) disaffirm or repudiate all qualified fi-
nancial contracts between—
‘‘(i) any person or any affiliate of
such person; and
‘‘(ii) the credit union in default; 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
(3) by adding at the end the following new
paragraph:
‘‘(15) 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
(a)(47) of the Securities Exchange Act of 1934),
and the Commodity Exchange Act.’’.
372
SEC. 905. CLARIFYING AMENDMENT RELATING TO MASTER
AGREEMENTS.
(a) FDIC-INSURED DEPOSITORY INSTITUTIONS.—
Section 11(e)(8)(D)(vii) of the Federal Deposit Insurance
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
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.’’.
(b) 
INSURED
CREDIT
UNIONS.—Section
207(c)(8)(D) of the Federal Credit Union Act (12 U.S.C.
373
1787(c)(8)(D)) is amended by inserting after clause (vi)
(as added by section 901(f)) the following new clause:
‘‘(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
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)—
374
(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
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:
375
‘‘(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
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,
376
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—
(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, paragraphs (8)(E), (8)(F), and
(10)(B) of section 207(c) of the Federal Credit Union Act,
or any order authorized under section 5(b)(2) of the Secu-
rities Investor Protection Act of 1970), the covered con-
tractual payment obligations and the covered contractual
payment entitlements between any 2 financial institutions
shall be netted in accordance with, and subject to the con-
ditions of, the terms of any applicable netting contract (ex-
cept 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:
377
‘‘(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
Federal Deposit Insurance Act, paragraphs (8)(E),
(8)(F), and (10)(B) of section 207(c) of the Federal Cred-
it Union 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, paragraphs (8)(E), (8)(F), and
(10)(B) of section 207(c) of the Federal Credit Union Act,
and any order authorized under section 5(b)(2) of the Se-
378
curities Investor Protection Act of 1970), the covered con-
tractual payment obligations and the covered contractual
payment entitlements of a member of a clearing organiza-
tion to and from all other members of a clearing organiza-
tion shall be netted in accordance with and subject to the
conditions of any applicable 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:
‘‘(h) 
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 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, para-
graphs (8)(E), (8)(F), and (10)(B) of section 207(c) of
the Federal Credit Union Act, and section 5(b)(2) of the
Securities Investor Protection Act of 1970).’’.
(d) ENFORCEABILITY OF CONTRACTS WITH UNIN-
SURED
NATIONAL
BANKS, 
UNINSURED
FEDERAL
379
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:
‘‘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
380
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
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-
381
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-
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.
382
‘‘(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.
‘‘(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’’;
383
(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);
‘‘(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
384
‘‘(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-
nection with any such agreement or transaction,
measured in accordance with section 562;’’;
(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-
385
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-
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);
386
‘‘(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
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
387
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;’’;
(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-
388
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;
‘‘(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
389
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,
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
390
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
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; 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
391
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
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-
392
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;
‘‘(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;
393
‘‘(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),
(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
394
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; and
‘‘(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;
395
‘‘(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
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;’’.
396
(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
and loan association, trust company, federally-
insured credit union, or receiver, liquidating
agent, or conservator for such entity and, when
any such Federal reserve bank, receiver, liqui-
dating agent, conservator or entity is acting as
agent or custodian for a customer in connection
with a securities contract (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—
397
‘‘(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 date of the
filing of the petition, has one or more agree-
ments or transactions 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 dur-
ing the previous 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 en-
tity (other than an affiliate) 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
398
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:
‘‘(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
399
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 date of
the filing of the petition, is a party to an out-
standing master netting agreement with the debt-
or;’’.
(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’’;
400
(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,
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
401
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-
cise such offset rights under paragraph (6), (7), or
(17) for each individual contract covered by the mas-
ter netting agreement in issue; and’’.
(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.’’.
402
(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’’; and
(2) by adding at the end the following:
‘‘(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—
403
(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
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
405
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:
‘‘§ 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
406
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:
‘‘§ 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
407
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,’’.
(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-
408
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,
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—
409
‘‘(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
‘‘(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).
410
‘‘(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
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
411
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
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:
412
‘‘§ 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
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,
413
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
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),
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)’’; 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—
414
(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’’;
(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
415
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.’’;
(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.’’;
416
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.’’;
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.
(a) FDIC-INSURED DEPOSITORY INSTITUTIONS.—
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-
417
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).’’.
(b) INSURED CREDIT UNIONS.—Section 207(c)(8) of
the Federal Credit Union Act (12 U.S.C. 1787(c)(8)) is
amended by adding at the end the following new subpara-
graph:
‘‘(H) RECORDKEEPING REQUIREMENTS.—
The Board, in consultation with the appropriate
Federal banking agencies, may prescribe regula-
tions requiring more detailed recordkeeping by
any insured credit union with respect to quali-
fied financial contracts (including market valu-
ations) only if such insured credit union is in
a troubled condition (as such term is defined by
the Board pursuant to section 212).’’.
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:
418
‘‘(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—
419
(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.
420
‘‘(c) For the purposes of subsection (b), if damages
are not measured as of the date or dates of rejection, liq-
uidation, termination, or acceleration, and the forward
contract merchant, stockbroker, financial institution, secu-
rities clearing agency, repo participant, financial partici-
pant, master netting agreement participant, or swap par-
ticipant or the trustee objects to the timing of the meas-
urement of damages—
‘‘(1) the trustee, in the case of an objection by
a forward contract merchant, stockbroker, financial
institution, securities clearing agency, repo partici-
pant, financial participant, master netting agree-
ment participant, or swap participant; or
‘‘(2) the forward contract merchant, stock-
broker, financial institution, securities clearing agen-
cy, repo participant, financial participant, master
netting agreement participant, or swap participant,
in the case of an objection by the trustee,
has the burden of proving that there were no commercially
reasonable determinants of value as of such date or
dates.’’; and
(2) in the table of sections for chapter 5, by in-
serting after the item relating to section 561 (as
added by section 907) the following new item:
‘‘562. Timing of damage measure in connection with swap agreements, securities
contracts, forward contracts, commodity contracts, repurchase
agreements, or master netting agreements.’’.
421
(b) CLAIMS ARISING FROM REJECTION.—Section
502(g) of title 11, United States Code, is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(g)’’; and
(2) by adding at the end the following:
‘‘(2) A claim for damages calculated in accordance
with section 562 shall be allowed under subsection (a), (b),
or (c), or disallowed under subsection (d) or (e), as if such
claim had arisen before the date of the filing of the peti-
tion.’’.
SEC. 911. SIPC STAY.
Section 5(b)(2) of the Securities Investor Protection
Act of 1970 (15 U.S.C. 78eee(b)(2)) is amended by adding
at the end the following new subparagraph:
‘‘(C) EXCEPTION FROM STAY.—
‘‘(i) Notwithstanding section 362 of
title 11, United States Code, neither the
filing of an application under subsection
(a)(3) nor any order or decree obtained by
SIPC from the court shall operate as a
stay of any contractual rights of a creditor
to liquidate, terminate, or accelerate a se-
curities contract, commodity contract, for-
ward contract, repurchase agreement, swap
agreement, or master netting agreement,
as those terms are defined in sections 101,
422
741, and 761 of title 11, United States
Code, to offset or net termination values,
payment amounts, or other transfer obliga-
tions arising under or in connection with
one or more of such contracts or agree-
ments, or to foreclose on any cash collat-
eral pledged by the debtor, whether or not
with respect to one or more of such con-
tracts or agreements.
‘‘(ii) Notwithstanding clause (i), such
application, order, or decree may operate
as a stay of the foreclosure on, or disposi-
tion of, securities collateral pledged by the
debtor, whether or not with respect to one
or more of such contracts or agreements,
securities sold by the debtor under a repur-
chase agreement, or securities lent under a
securities lending agreement.
‘‘(iii) As used in this subparagraph,
the term ‘contractual right’ includes a
right set forth in a rule or bylaw of a na-
tional securities exchange, a national secu-
rities association, or a securities clearing
agency, a right set forth in a bylaw of a
clearing organization or contract market or
423
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 busi-
ness practice.’’.
TITLE X—PROTECTION OF FAM-
ILY FARMERS AND FAMILY
FISHERMEN
SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12.
(a) REENACTMENT.—
(1) IN
GENERAL.—Chapter 12 of title 11,
United States Code, as reenacted by section 149 of
division C of the Omnibus Consolidated and Emer-
gency Supplemental Appropriations Act, 1999 (Pub-
lic Law 105–277), is hereby reenacted, and as here
reenacted is amended by this Act.
(2) EFFECTIVE
DATE.—Subsection (a) shall
take effect on the date of the enactment of this Act.
(b) CONFORMING AMENDMENT.—Section 302 of the
Bankruptcy Judges, United States Trustees, and Family
Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note) is
amended by striking subsection (f).
424
SEC. 1002. DEBT LIMIT INCREASE.
Section 104(b) of title 11, United States Code, as
amended by section 226, is amended by inserting
‘‘101(18),’’ after ‘‘101(3),’’ each place it appears.
SEC. 1003. CERTAIN CLAIMS OWED TO GOVERNMENTAL
UNITS.
(a) CONTENTS OF PLAN.—Section 1222(a)(2) of title
11, United States Code, as amended by section 213, is
amended to read as follows:
‘‘(2) provide for the full payment, in deferred
cash payments, of all claims entitled to priority
under section 507, unless—
‘‘(A) the claim is a claim owed to a govern-
mental unit that arises as a result of the sale,
transfer, exchange, or other disposition of any
farm asset used in the debtor’s farming oper-
ation, in which case the claim shall be treated
as an unsecured claim that is not entitled to
priority under section 507, but the debt shall be
treated in such manner only if the debtor re-
ceives a discharge; or
‘‘(B) the holder of a particular claim
agrees to a different treatment of that claim;’’.
(b) SPECIAL NOTICE PROVISIONS.—Section 1231(b)
of title 11, United States Code, as so designated by section
425
719, is amended by striking ‘‘a State or local govern-
mental unit’’ and inserting ‘‘any governmental unit’’.
(c) EFFECTIVE DATE; APPLICATION
OF AMEND-
MENTS.—This section and the amendments made by this
section shall take effect on the date of the enactment of
this Act and shall not apply with respect to cases com-
menced under title 11 of the United States Code before
such date.
SEC. 1004. DEFINITION OF FAMILY FARMER.
Section 101(18) of title 11, United States Code, is
amended—
(1) in subparagraph (A)—
(A) by striking ‘‘$1,500,000’’ and inserting
‘‘$3,237,000’’; and
(B) by striking ‘‘80’’ and inserting ‘‘50’’;
and
(2) in subparagraph (B)(ii)—
(A) by striking ‘‘$1,500,000’’ and inserting
‘‘$3,237,000’’; and
(B) by striking ‘‘80’’ and inserting ‘‘50’’.
426
SEC. 1005. ELIMINATION OF REQUIREMENT THAT FAMILY
FARMER AND SPOUSE RECEIVE OVER 50 PER-
CENT OF INCOME FROM FARMING OPER-
ATION IN YEAR PRIOR TO BANKRUPTCY.
Section 101(18)(A) of title 11, United States Code,
is amended by striking ‘‘for the taxable year preceding the
taxable year’’ and inserting the following:
‘‘for—
‘‘(i) the taxable year preceding; or
‘‘(ii) each of the 2d and 3d taxable
years preceding;
the taxable year’’.
SEC. 1006. PROHIBITION OF RETROACTIVE ASSESSMENT OF
DISPOSABLE INCOME.
(a) CONFIRMATION OF PLAN.—Section 1225(b)(1) of
title 11, United States Code, is amended—
(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 value of the property to be distributed
under the plan in the 3-year period, or such longer
period as the court may approve under section
1222(c), beginning on the date that the first dis-
tribution is due under the plan is not less than the
427
debtor’s projected disposable income for such pe-
riod.’’.
(b) MODIFICATION OF PLAN.—Section 1229 of title
11, United States Code, is amended by adding at the end
the following:
‘‘(d) A plan may not be modified under this section—
‘‘(1) to increase the amount of any payment
due before the plan as modified becomes the plan;
‘‘(2) by anyone except the debtor, based on an
increase in the debtor’s disposable income, to in-
crease the amount of payments to unsecured credi-
tors required for a particular month so that the ag-
gregate of such payments exceeds the debtor’s dis-
posable income for such month; or
‘‘(3) in the last year of the plan by anyone ex-
cept the debtor, to require payments that would
leave the debtor with insufficient funds to carry on
the farming operation after the plan is completed.’’.
SEC. 1007. FAMILY FISHERMEN.
(a) DEFINITIONS.—Section 101 of title 11, United
States Code, is amended—
(1) by inserting after paragraph (7) the fol-
lowing:
‘‘(7A) ‘commercial fishing operation’ means—
428
‘‘(A) the catching or harvesting of fish,
shrimp, lobsters, urchins, seaweed, shellfish, or
other aquatic species or products of such spe-
cies; or
‘‘(B) for purposes of section 109 and chap-
ter 12, aquaculture activities consisting of rais-
ing for market any species or product described
in subparagraph (A);
‘‘(7B) ‘commercial fishing vessel’ means a ves-
sel used by a family fisherman to carry out a com-
mercial fishing operation;’’; and
(2) by inserting after paragraph (19) the fol-
lowing:
‘‘(19A) ‘family fisherman’ means—
‘‘(A) an individual or individual and spouse
engaged in a commercial fishing operation—
‘‘(i) whose aggregate debts do not ex-
ceed $1,500,000 and not less than 80 per-
cent of whose aggregate noncontingent, liq-
uidated debts (excluding a debt for the
principal residence of such individual or
such individual and spouse, unless such
debt arises out of a commercial fishing op-
eration), on the date the case is filed, arise
out of a commercial fishing operation
429
owned or operated by such individual or
such individual and spouse; and
‘‘(ii) who receive from such commer-
cial fishing operation more than 50 percent
of such individual’s or such individual’s
and spouse’s gross income for the taxable
year preceding the taxable year in which
the case concerning such individual or such
individual and spouse was filed; or
‘‘(B) a corporation or partnership—
‘‘(i) in which more than 50 percent of
the outstanding stock or equity is held
by—
‘‘(I) 1 family that conducts the
commercial fishing operation; or
‘‘(II) 1 family and the relatives
of the members of such family, and
such family or such relatives conduct
the commercial fishing operation; and
‘‘(ii)(I) more than 80 percent of the
value of its assets consists of assets related
to the commercial fishing operation;
‘‘(II) its aggregate debts do not ex-
ceed $1,500,000 and not less than 80 per-
cent of its aggregate noncontingent, liq-
430
uidated debts (excluding a debt for 1
dwelling which is owned by such corpora-
tion or partnership and which a share-
holder or partner maintains as a principal
residence, unless such debt arises out of a
commercial fishing operation), on the date
the case is filed, arise out of a commercial
fishing operation owned or operated by
such corporation or such partnership; and
‘‘(III) if such corporation issues stock,
such stock is not publicly traded;
‘‘(19B) ‘family fisherman with regular annual
income’ means a family fisherman whose annual in-
come is sufficiently stable and regular to enable such
family fisherman to make payments under a plan
under chapter 12 of this title;’’.
(b) WHO MAY BE A DEBTOR.—Section 109(f) of title
11, United States Code, is amended by inserting ‘‘or fam-
ily fisherman’’ after ‘‘family farmer’’.
(c) CHAPTER 12.—Chapter 12 of title 11, United
States Code, is amended—
(1) in the chapter heading, by inserting ‘‘OR
FISHERMAN’’ after ‘‘FAMILY FARMER’’;
(2) in section 1203, by inserting ‘‘or commer-
cial fishing operation’’ after ‘‘farm’’; and
431
(3) in section 1206, by striking ‘‘if the property
is farmland or farm equipment’’ and inserting ‘‘if
the property is farmland, farm equipment, or prop-
erty used to carry out a commercial fishing oper-
ation (including a commercial fishing vessel)’’.
(d) CLERICAL AMENDMENT.—In the table of chap-
ters for title 11, United States Code, the item relating to
chapter 12, is amended to read as follows:
‘‘12. Adjustments of Debts of a Family Farmer or Family
Fisherman with Regular Annual Income ..... 1201’’.
(e) APPLICABILITY.—Nothing in this section shall
change, affect, or amend the Fishery Conservation and
Management Act of 1976 (16 U.S.C. 1801 et seq.).
TITLE XI—HEALTH CARE AND
EMPLOYEE BENEFITS
SEC. 1101. DEFINITIONS.
(a) HEALTH CARE BUSINESS DEFINED.—Section
101 of title 11, United States Code, as amended by section
306, is amended—
(1) by redesignating paragraph (27A) as para-
graph (27B); and
(2) by inserting after paragraph (27) the fol-
lowing:
‘‘(27A) ‘health care business’—
‘‘(A) means any public or private entity
(without regard to whether that entity is orga-
432
nized for profit or not for profit) that is pri-
marily engaged in offering to the general public
facilities and services for—
‘‘(i) the diagnosis or treatment of in-
jury, deformity, or disease; and
‘‘(ii) surgical, drug treatment, psy-
chiatric, or obstetric care; and
‘‘(B) includes—
‘‘(i) any—
‘‘(I) general or specialized hos-
pital;
‘‘(II) ancillary ambulatory, emer-
gency, or surgical treatment facility;
‘‘(III) hospice;
‘‘(IV) home health agency; and
‘‘(V) other health care institution
that is similar to an entity referred to
in subclause (I), (II), (III), or (IV);
and
‘‘(ii) any long-term care facility, in-
cluding any—
‘‘(I) skilled nursing facility;
‘‘(II) intermediate care facility;
‘‘(III) assisted living facility;
‘‘(IV) home for the aged;
433
‘‘(V) domiciliary care facility; and
‘‘(VI) health care institution that
is related to a facility referred to in
subclause (I), (II), (III), (IV), or (V),
if that institution is primarily engaged
in offering room, board, laundry, or
personal assistance with activities of
daily living and incidentals to activi-
ties of daily living;’’.
(b) PATIENT AND PATIENT RECORDS DEFINED.—
Section 101 of title 11, United States Code, is amended
by inserting after paragraph (40) the following:
‘‘(40A) ‘patient’ means any individual who ob-
tains or receives services from a health care busi-
ness;
‘‘(40B) ‘patient records’ means any written doc-
ument relating to a patient or a record recorded in
a magnetic, optical, or other form of electronic me-
dium;’’.
(c) RULE
OF CONSTRUCTION.—The amendments
made by subsection (a) of this section shall not affect the
interpretation of section 109(b) of title 11, United States
Code.
434
SEC. 1102. DISPOSAL OF PATIENT RECORDS.
(a) IN GENERAL.—Subchapter III of chapter 3 of
title 11, United States Code, is amended by adding at the
end the following:
‘‘§ 351. Disposal of patient records
‘‘If a health care business commences a case under
chapter 7, 9, or 11, and the trustee does not have a suffi-
cient amount of funds to pay for the storage of patient
records in the manner required under applicable Federal
or State law, the following requirements shall apply:
‘‘(1) The trustee shall—
‘‘(A) promptly publish notice, in 1 or more
appropriate newspapers, that if patient records
are not claimed by the patient or an insurance
provider (if applicable law permits the insur-
ance provider to make that claim) by the date
that is 365 days after the date of that notifica-
tion, the trustee will destroy the patient
records; and
‘‘(B) during the first 180 days of the 365-
day period described in subparagraph (A),
promptly attempt to notify directly each patient
that is the subject of the patient records and
appropriate insurance carrier concerning the
patient records by mailing to the most recent
known address of that patient, or a family
435
member or contact person for that patient, and
to the appropriate insurance carrier an appro-
priate notice regarding the claiming or dis-
posing of patient records.
‘‘(2) If, after providing the notification under
paragraph (1), patient records are not claimed dur-
ing the 365-day period described under that para-
graph, the trustee shall mail, by certified mail, at
the end of such 365-day period a written request to
each appropriate Federal agency to request permis-
sion from that agency to deposit the patient records
with that agency, except that no Federal agency is
required to accept patient records under this para-
graph.
‘‘(3) If, following the 365-day period described
in paragraph (2) and after providing the notification
under paragraph (1), patient records are not claimed
by a patient or insurance provider, or request is not
granted by a Federal agency to deposit such records
with that agency, the trustee shall destroy those
records by—
‘‘(A) if the records are written, shredding
or burning the records; or
‘‘(B) if the records are magnetic, optical,
or other electronic records, by otherwise de-
436
stroying those records so that those records
cannot be retrieved.’’.
(b) CLERICAL AMENDMENT.—The table of sections
for subchapter III of chapter 3 of title 11, United States
Code, is amended by adding at the end the following:
‘‘351. Disposal of patient records.’’.
SEC. 1103. ADMINISTRATIVE EXPENSE CLAIM FOR COSTS
OF CLOSING A HEALTH CARE BUSINESS AND
OTHER ADMINISTRATIVE EXPENSES.
Section 503(b) of title 11, United States Code, as
amended by section 445, is amended by adding at the end
the following:
‘‘(8) the actual, necessary costs and expenses of
closing a health care business incurred by a trustee
or by a Federal agency (as defined in section 551(1)
of title 5) or a department or agency of a State or
political subdivision thereof, including any cost or
expense incurred—
‘‘(A) in disposing of patient records in ac-
cordance with section 351; or
‘‘(B) in connection with transferring pa-
tients from the health care business that is in
the process of being closed to another health
care business; and’’.
437
SEC. 1104. APPOINTMENT OF OMBUDSMAN TO ACT AS PA-
TIENT ADVOCATE.
(a) OMBUDSMAN TO ACT AS PATIENT ADVOCATE.—
(1) APPOINTMENT OF OMBUDSMAN.—Title 11,
United States Code, as amended by section 232, is
amended by inserting after section 332 the fol-
lowing:
‘‘§ 333. Appointment of patient care ombudsman
‘‘(a)(1) If the debtor in a case under chapter 7, 9,
or 11 is a health care business, the court shall order, not
later than 30 days after the commencement of the case,
the appointment of an ombudsman to monitor the quality
of patient care and to represent the interests of the pa-
tients of the health care business unless the court finds
that the appointment of such ombudsman is not necessary
for the protection of patients under the specific facts of
the case.
‘‘(2)(A) If the court orders the appointment of an
ombudsman under paragraph (1), the United States trust-
ee shall appoint 1 disinterested person (other than the
United States trustee) to serve as such ombudsman.
‘‘(B) If the debtor is a health care business that pro-
vides long-term care, then the United States trustee may
appoint the State Long-Term Care Ombudsman appointed
under the Older Americans Act of 1965 for the State in
438
which the case is pending to serve as the ombudsman re-
quired by paragraph (1).
‘‘(C) If the United States trustee does not appoint
a State Long-Term Care Ombudsman under subpara-
graph (B), the court shall notify the State Long-Term
Care Ombudsman appointed under the Older Americans
Act of 1965 for the State in which the case is pending,
of the name and address of the person who is appointed
under subparagraph (A).
‘‘(b) An ombudsman appointed under subsection (a)
shall—
‘‘(1) monitor the quality of patient care pro-
vided to patients of the debtor, to the extent nec-
essary under the circumstances, including inter-
viewing patients and physicians;
‘‘(2) not later than 60 days after the date of
appointment, and not less frequently than at 60-day
intervals thereafter, report to the court after notice
to the parties in interest, at a hearing or in writing,
regarding the quality of patient care provided to pa-
tients of the debtor; and
‘‘(3) if such ombudsman determines that the
quality of patient care provided to patients of the
debtor is declining significantly or is otherwise being
materially compromised, file with the court a motion
439
or a written report, with notice to the parties in in-
terest immediately upon making such determination.
‘‘(c)(1) An ombudsman appointed under subsection
(a) shall maintain any information obtained by such om-
budsman under this section that relates to patients (in-
cluding information relating to patient records) as con-
fidential information. Such ombudsman may not review
confidential patient records unless the court approves such
review in advance and imposes restrictions on such om-
budsman to protect the confidentiality of such records.
‘‘(2) An ombudsman appointed under subsection
(a)(2)(B) shall have access to patient records consistent
with authority of such ombudsman under the Older Amer-
icans Act of 1965 and under non-Federal laws governing
the State Long-Term Care Ombudsman program.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter II of chapter 3 of title 11,
United States Code, as amended by section 232, is
amended by adding at the end the following:
‘‘333. Appointment of ombudsman.’’.
(b) 
COMPENSATION
OF
OMBUDSMAN.—Section
330(a)(1) of title 11, United States Code, is amended—
(1) in the matter preceding subparagraph (A),
by inserting ‘‘an ombudsman appointed under sec-
tion 333, or’’ before ‘‘a professional person’’; and
440
(2) in subparagraph (A), by inserting ‘‘ombuds-
man,’’ before ‘‘professional person’’.
SEC. 1105. DEBTOR IN POSSESSION; DUTY OF TRUSTEE TO
TRANSFER PATIENTS.
(a) IN GENERAL.—Section 704(a) of title 11, United
States Code, as amended by sections 102, 219, and 446,
is amended by adding at the end the following:
‘‘(12) use all reasonable and best efforts to
transfer patients from a health care business that is
in the process of being closed to an appropriate
health care business that—
‘‘(A) is in the vicinity of the health care
business that is closing;
‘‘(B) provides the patient with services
that are substantially similar to those provided
by the health care business that is in the proc-
ess of being closed; and
‘‘(C) maintains a reasonable quality of
care.’’.
(b) CONFORMING AMENDMENT.—Section 1106(a)(1)
of title 11, United States Code, as amended by section
446, is amended by striking ‘‘and (11)’’ and inserting
‘‘(11), and (12)’’.
441
SEC. 1106. EXCLUSION FROM PROGRAM PARTICIPATION
NOT SUBJECT TO AUTOMATIC STAY.
Section 362(b) of title 11, United States Code, is
amended by inserting after paragraph (27), as amended
by sections 224, 303, 311, 401, 718, and 907, the fol-
lowing:
‘‘(28) under subsection (a), of the exclusion by
the Secretary of Health and Human Services of the
debtor from participation in the medicare program
or any other Federal health care program (as de-
fined in section 1128B(f) of the Social Security Act
pursuant to title XI or XVIII of such Act).’’.
TITLE XII—TECHNICAL
AMENDMENTS
SEC. 1201. DEFINITIONS.
Section 101 of title 11, United States Code, as here-
inbefore amended by this Act, is amended—
(1) by striking ‘‘In this title—’’ and inserting
‘‘In this title the following definitions shall apply:’’;
(2) in each paragraph, by inserting ‘‘The term’’
after the paragraph designation;
(3) in paragraph (35)(B), by striking ‘‘para-
graphs (21B) and (33)(A)’’ and inserting ‘‘para-
graphs (23) and (35)’’;
442
(4) in each of paragraphs (35A), (38), and
(54A), by striking ‘‘; and’’ at the end and inserting
a period;
(5) in paragraph (51B)—
(A) by inserting ‘‘who is not a family farm-
er’’ after ‘‘debtor’’ the first place it appears;
and
(B) by striking ‘‘thereto having aggregate’’
and all that follows through the end of the
paragraph and inserting a semicolon;
(6) by striking paragraph (54) and inserting
the following:
‘‘(54) The term ‘transfer’ means—
‘‘(A) the creation of a lien;
‘‘(B) the retention of title as a security in-
terest;
‘‘(C) the foreclosure of a debtor’s equity of
redemption; or
‘‘(D) each mode, direct or indirect, abso-
lute or conditional, voluntary or involuntary, of
disposing of or parting with—
‘‘(i) property; or
‘‘(ii) an interest in property;’’;
(7) by indenting the left margin of paragraph
(54A) 2 ems to the right; and
443
(8) in each of paragraphs (1) through (35), in
each of paragraphs (36), (37), (38A), (38B) and
(39A), and in each of paragraphs (40) through (55),
by striking the semicolon at the end and inserting a
period.
SEC. 1202. ADJUSTMENT OF DOLLAR AMOUNTS.
Section 104 of title 11, United States Code, is
amended by inserting ‘‘522(f)(3),’’ after ‘‘522(d),’’ each
place it appears.
SEC. 1203. EXTENSION OF TIME.
Section 108(c)(2) of title 11, United States Code, is
amended by striking ‘‘922’’ and all that follows through
‘‘or’’, and inserting ‘‘922, 1201, or’’.
SEC. 1204. TECHNICAL AMENDMENTS.
Title 11, United States Code, is amended—
(1) in section 109(b)(2), by striking ‘‘subsection
(c) or (d) of’’; and
(2) in section 552(b)(1), by striking ‘‘product’’
each place it appears and inserting ‘‘products’’.
SEC. 1205. PENALTY FOR PERSONS WHO NEGLIGENTLY OR
FRAUDULENTLY PREPARE BANKRUPTCY PE-
TITIONS.
Section 110(j)(4) of title 11, United States Code, as
so redesignated by section 221, is amended by striking
‘‘attorney’s’’ and inserting ‘‘attorneys’ ’’.
444
SEC. 1206. LIMITATION ON COMPENSATION OF PROFES-
SIONAL PERSONS.
Section 328(a) of title 11, United States Code, is
amended by inserting ‘‘on a fixed or percentage fee basis,’’
after ‘‘hourly basis,’’.
SEC. 1207. EFFECT OF CONVERSION.
Section 348(f)(2) of title 11, United States Code, is
amended by inserting ‘‘of the estate’’ after ‘‘property’’ the
first place it appears.
SEC. 1208. ALLOWANCE OF ADMINISTRATIVE EXPENSES.
Section 503(b)(4) of title 11, United States Code, is
amended by inserting ‘‘subparagraph (A), (B), (C), (D),
or (E) of’’ before ‘‘paragraph (3)’’.
SEC. 1209. EXCEPTIONS TO DISCHARGE.
Section 523 of title 11, United States Code, as
amended by sections 215 and 314, is amended—
(1) by transferring paragraph (15), as added by
section 304(e) of Public Law 103–394 (108 Stat.
4133), so as to insert such paragraph after sub-
section (a)(14A);
(2) in subsection (a)(9), by striking ‘‘motor ve-
hicle’’ and inserting ‘‘motor vehicle, vessel, or air-
craft’’; and
(3) in subsection (e), by striking ‘‘a insured’’
and inserting ‘‘an insured’’.
445
SEC. 1210. EFFECT OF DISCHARGE.
Section 524(a)(3) of title 11, United States Code, is
amended by striking ‘‘section 523’’ and all that follows
through ‘‘or that’’ and inserting ‘‘section 523, 1228(a)(1),
or 1328(a)(1), or that’’.
SEC. 1211. PROTECTION AGAINST DISCRIMINATORY TREAT-
MENT.
Section 525(c) of title 11, United States Code, is
amended—
(1) in paragraph (1), by inserting ‘‘student’’ be-
fore ‘‘grant’’ the second place it appears; and
(2) in paragraph (2), by striking ‘‘the program
operated under part B, D, or E of’’ and inserting
‘‘any program operated under’’.
SEC. 1212. PROPERTY OF THE ESTATE.
Section 541(b)(4)(B)(ii) of title 11, United States
Code, is amended by inserting ‘‘365 or’’ before ‘‘542’’.
SEC. 1213. PREFERENCES.
(a) IN GENERAL.—Section 547 of title 11, United
States Code, as amended by section 201, is amended—
(1) in subsection (b), by striking ‘‘subsection
(c)’’ and inserting ‘‘subsections (c) and (i)’’; and
(2) by adding at the end the following:
‘‘(i) If the trustee avoids under subsection (b) a
transfer made between 90 days and 1 year before the date
of the filing of the petition, by the debtor to an entity
446
that is not an insider for the benefit of a creditor that
is an insider, such transfer shall be considered to be avoid-
ed under this section only with respect to the creditor that
is an insider.’’.
(b) APPLICABILITY.—The amendments made by this
section shall apply to any case that is pending or com-
menced on or after the date of enactment of this Act.
SEC. 1214. POSTPETITION TRANSACTIONS.
Section 549(c) of title 11, United States Code, is
amended—
(1) by inserting ‘‘an interest in’’ after ‘‘transfer
of’’ each place it appears;
(2) by striking ‘‘such property’’ and inserting
‘‘such real property’’; and
(3) by striking ‘‘the interest’’ and inserting
‘‘such interest’’.
SEC. 1215. DISPOSITION OF PROPERTY OF THE ESTATE.
Section 726(b) of title 11, United States Code, is
amended by striking ‘‘1009,’’.
SEC. 1216. GENERAL PROVISIONS.
Section 901(a) of title 11, United States Code, is
amended by inserting ‘‘1123(d),’’ after ‘‘1123(b),’’.
447
SEC. 1217. ABANDONMENT OF RAILROAD LINE.
Section 1170(e)(1) of title 11, United States Code,
is amended by striking ‘‘section 11347’’ and inserting
‘‘section 11326(a)’’.
SEC. 1218. CONTENTS OF PLAN.
Section 1172(c)(1) of title 11, United States Code,
is amended by striking ‘‘section 11347’’ and inserting
‘‘section 11326(a)’’.
SEC. 1219. BANKRUPTCY CASES AND PROCEEDINGS.
Section 1334(d) of title 28, United States Code, is
amended—
(1) by striking ‘‘made under this subsection’’
and inserting ‘‘made under subsection (c)’’; and
(2) by striking ‘‘This subsection’’ and inserting
‘‘Subsection (c) and this subsection’’.
SEC. 1220. KNOWING DISREGARD OF BANKRUPTCY LAW OR
RULE.
Section 156(a) of title 18, United States Code, is
amended—
(1) in the first undesignated paragraph—
(A) by inserting ‘‘(1) the term’’ before
‘‘ ‘bankruptcy’’; and
(B) by striking the period at the end and
inserting ‘‘; and’’; and
(2) in the second undesignated paragraph—
448
(A) by inserting ‘‘(2) the term’’ before
‘‘ ‘document’’; and
(B) by striking ‘‘this title’’ and inserting
‘‘title 11’’.
SEC. 1221. TRANSFERS MADE BY NONPROFIT CHARITABLE
CORPORATIONS.
(a) SALE OF PROPERTY OF ESTATE.—Section 363(d)
of title 11, United States Code, is amended by striking
‘‘only’’ and all that follows through the end of the sub-
section and inserting ‘‘only—
‘‘(1) in accordance with applicable nonbank-
ruptcy law that governs the transfer of property by
a corporation or trust that is not a moneyed, busi-
ness, or commercial corporation or trust; and
‘‘(2) to the extent not inconsistent with any re-
lief granted under subsection (c), (d), (e), or (f) of
section 362.’’.
(b) CONFIRMATION
OF
PLAN
OF
REORGANIZA-
TION.—Section 1129(a) of title 11, United States Code,
as amended by sections 213 and 321, is amended by add-
ing at the end the following:
‘‘(16) All transfers of property of the plan shall
be made in accordance with any applicable provi-
sions of nonbankruptcy law that govern the transfer
of property by a corporation or trust that is not a
449
moneyed, business, or commercial corporation or
trust.’’.
(c) TRANSFER OF PROPERTY.—Section 541 of title
11, United States Code, as amended by section 225, is
amended by adding at the end the following:
‘‘(f) Notwithstanding any other provision of this title,
property that is held by a debtor that is a corporation de-
scribed in section 501(c)(3) of the Internal Revenue Code
of 1986 and exempt from tax under section 501(a) of such
Code may be transferred to an entity that is not such a
corporation, but only under the same conditions as would
apply if the debtor had not filed a case under this title.’’.
(d) APPLICABILITY.—The amendments made by this
section shall apply to a case pending under title 11, United
States Code, on the date of enactment of this Act, or filed
under that title on or after that date of enactment, except
that the court shall not confirm a plan under chapter 11
of title 11, United States Code, without considering
whether this section would substantially affect the rights
of a party in interest who first acquired rights with respect
to the debtor after the date of the filing of the petition.
The parties who may appear and be heard in a proceeding
under this section include the attorney general of the State
in which the debtor is incorporated, was formed, or does
business.
450
(e) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to require the court in which a
case under chapter 11 of title 11, United States Code, is
pending to remand or refer any proceeding, issue, or con-
troversy to any other court or to require the approval of
any other court for the transfer of property.
SEC. 1222. PROTECTION OF VALID PURCHASE MONEY SE-
CURITY INTERESTS.
Section 547(c)(3)(B) of title 11, United States Code,
is amended by striking ‘‘20’’ and inserting ‘‘30’’.
SEC. 1223. BANKRUPTCY JUDGESHIPS.
(a) SHORT TITLE.—This section may be cited as the
‘‘Bankruptcy Judgeship Act of 2003’’.
(b) TEMPORARY JUDGESHIPS.—
(1) APPOINTMENTS.—The following bankruptcy
judges shall be appointed in the manner prescribed
in section 152(a)(1) of title 28, United States Code,
for the appointment of bankruptcy judges provided
for in section 152(a)(2) of such title:
(A) One additional bankruptcy judge for
the eastern district of California.
(B) Three additional bankruptcy judges for
the central district of California.
(C) Four additional bankruptcy judges for
the district of Delaware.
451
(D) Two additional bankruptcy judges for
the southern district of Florida.
(E) One additional bankruptcy judge for
the southern district of Georgia.
(F) Three additional bankruptcy judges for
the district of Maryland.
(G) One additional bankruptcy judge for
the eastern district of Michigan.
(H) One additional bankruptcy judge for
the southern district of Mississippi.
(I) One additional bankruptcy judge for
the district of New Jersey.
(J) One additional bankruptcy judge for
the eastern district of New York.
(K) One additional bankruptcy judge for
the northern district of New York.
(L) One additional bankruptcy judge for
the southern district of New York.
(M) One additional bankruptcy judge for
the eastern district of North Carolina.
(N) One additional bankruptcy judge for
the eastern district of Pennsylvania.
(O) One additional bankruptcy judge for
the middle district of Pennsylvania.
452
(P) One additional bankruptcy judge for
the district of Puerto Rico.
(Q) One additional bankruptcy judge for
the western district of Tennessee.
(R) One additional bankruptcy judge for
the eastern district of Virginia.
(S) One additional bankruptcy judge for
the district of South Carolina.
(T) One additional bankruptcy judge for
the district of Nevada.
(2) VACANCIES.—
(A) DISTRICTS
WITH
SINGLE
APPOINT-
MENTS.—Except as provided in subparagraphs
(B), (C), (D), and (E), the first vacancy occur-
ring in the office of bankruptcy judge in each
of the judicial districts set forth in paragraph
(1)—
(i) occurring 5 years or more after the
appointment date of the bankruptcy judge
appointed under paragraph (1) to such of-
fice; and
(ii) resulting from the death, retire-
ment, resignation, or removal of a bank-
ruptcy judge;
shall not be filled.
453
(B) CENTRAL DISTRICT OF CALIFORNIA.—
The 1st, 2d, and 3d vacancies in the office of
bankruptcy judge in the central district of
California—
(i) occurring 5 years or more after the
respective 1st, 2d, and 3d appointment
dates of the bankruptcy judges appointed
under paragraph (1)(B); and
(ii) resulting from the death, retire-
ment, resignation, or removal of a bank-
ruptcy judge;
shall not be filled.
(C) DISTRICT
OF
DELAWARE.—The 1st,
2d, 3d, and 4th vacancies in the office of bank-
ruptcy judge in the district of Delaware—
(i) occurring 5 years or more after the
respective 1st, 2d, 3d, and 4th appoint-
ment dates of the bankruptcy judges ap-
pointed under paragraph (1)(F); and
(ii) resulting from the death, retire-
ment, resignation, or removal of a bank-
ruptcy judge;
shall not be filled.
(D) SOUTHERN DISTRICT OF FLORIDA.—
The 1st and 2d vacancies in the office of bank-
454
ruptcy judge in the southern district of
Florida—
(i) occurring 5 years or more after the
respective 1st and 2d appointment dates of
the bankruptcy judges appointed under
paragraph (1)(D); and
(ii) resulting from the death, retire-
ment, resignation, or removal of a bank-
ruptcy judge;
shall not be filled.
(E) DISTRICT
OF
MARYLAND.—The 1st,
2d, and 3d vacancies in the office of bankruptcy
judge in the district of Maryland—
(i) occurring 5 years or more after the
respective 1st, 2d, and 3d appointment
dates of the bankruptcy judges appointed
under paragraph (1)(F); and
(ii) resulting from the death, retire-
ment, resignation, or removal of a bank-
ruptcy judge;
shall not be filled.
(c) EXTENSIONS.—
(1) IN
GENERAL.—The temporary office of
bankruptcy judges authorized for the northern dis-
trict of Alabama, the district of Delaware, the dis-
455
trict of Puerto Rico, and the eastern district of Ten-
nessee under paragraphs (1), (3), (7), and (9) of
section 3(a) of the Bankruptcy Judgeship Act of
1992 (28 U.S.C. 152 note) are extended until the
first vacancy occurring in the office of a bankruptcy
judge in the applicable district resulting from the
death, retirement, resignation, or removal of a bank-
ruptcy judge and occurring 5 years after the date of
the enactment of this Act.
(2) APPLICABILITY OF OTHER PROVISIONS.—
All other provisions of section 3 of the Bankruptcy
Judgeship Act of 1992 (28 U.S.C. 152 note) remain
applicable to the temporary office of bankruptcy
judges referred to in this subsection.
(d) TECHNICAL AMENDMENTS.—Section 152(a) of
title 28, United States Code, is amended—
(1) in paragraph (1), by striking the first sen-
tence and inserting the following: ‘‘Each bankruptcy
judge to be appointed for a judicial district, as pro-
vided in paragraph (2), shall be appointed by the
court of appeals of the United States for the circuit
in which such district is located.’’; and
(2) in paragraph (2)—
456
(A) in the item relating to the middle dis-
trict of Georgia, by striking ‘‘2’’ and inserting
‘‘3’’; and
(B) in the collective item relating to the
middle and southern districts of Georgia, by
striking ‘‘Middle and Southern . . . . . . 1’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
SEC. 1224. COMPENSATING TRUSTEES.
Section 1326 of title 11, United States Code, is
amended—
(1) in subsection (b)—
(A) in paragraph (1), by striking ‘‘and’’;
(B) in paragraph (2), by striking the pe-
riod at the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(3) if a chapter 7 trustee has been allowed
compensation due to the conversion or dismissal of
the debtor’s prior case pursuant to section 707(b),
and some portion of that compensation remains un-
paid in a case converted to this chapter or in the
case dismissed under section 707(b) and refiled
under this chapter, the amount of any such unpaid
compensation, which shall be paid monthly—