Source: http://lawdelta.org/world/Law:Creditors,_The_Debtor,_And_The_Estate
Timestamp: 2015-04-19 14:35:15
Document Index: 589067097

Matched Legal Cases: ['§501', '§502', '§503', '§504', '§505', '§506', '§507', '§508', '§509', '§510', '§511', '§521', '§522', '§523', '§524', '§525', '§526', '§527', '§528', '§541', '§542', '§543', '§544', '§545', '§546', '§547', '§548', '§549', '§550', '§551', '§552', '§553', '§554', '§555', '§556', '§557', '§558', '§559', '§560', '§561', '§562', '§2', '§227', '§704', '§907', '§106', '§283', '§352', '§6', '§304', '§656', '§716', '§304', '§283', '§283', '§445', '§445', '§445', '§445', '§445', '§445', '§445', '§445', '§445', '§445', '§445', '§445', '§445', '§445', '§445', '§242', '§2041', '§329', '§712', '§1208', '§213', '§304', '§283', '§283', '§283', '§446', '§446', '§446', '§446', '§446', '§446', '§446']

Law:Creditors, The Debtor, And The Estate - Law Delta
Law:Creditors, The Debtor, And The Estate
1 SUBCHAPTER I—CREDITORS AND CLAIMS
2 SUBCHAPTER II—DEBTOR'S DUTIES AND BENEFITS
3 SUBCHAPTER III—THE ESTATE
5 SUBCHAPTER I—CREDITORS AND CLAIMS
6 §501. Filing of proofs of claims or interests
6.2 senate report no. 95–989
6.4 Effective Date of 2005 Amendment
6.5 Effective Date of 1984 Amendment
6.6 Child Support Creditors or Their Representatives; Appearance Before Court
7 §502. Allowance of claims or interests
7.6 Effective Date of 2005 Amendment
7.7 Effective Date of 1994 Amendment
7.8 Effective Date of 1986 Amendment
7.9 Effective Date of 1984 Amendment
8 §503. Allowance of administrative expenses
8.4 Effective Date of 2005 Amendment
8.5 Effective Date of 1994 Amendment
8.6 Effective Date of 1986 Amendment
8.7 Effective Date of 1984 Amendment
9 §504. Sharing of compensation
9.3 Effective Date of 2005 Amendment
10 §505. Determination of tax liability
10.1 Historical and Revision Notes
10.2 senate report no. 95–989
10.3 house report no. 95–595
10.4 Amendments
10.5 Effective Date of 2005 Amendment
10.6 Effective Date of 1984 Amendment
11 §506. Determination of secured status
12 §507. Priorities
12.1 Adjustment of Dollar Amounts
12.2 Historical and Revision Notes
12.3 senate report no. 95–989
12.4 References in Text
12.5 Amendments
12.6 Effective Date of 2010 Amendment
12.7 Effective Date of 2005 Amendment
12.8 Effective Date of 1994 Amendment
12.9 Effective Date of 1984 Amendment
12.10 Adjustment of Dollar Amounts
13 §508. Effect of distribution other than under this title
13.2 senate report no. 95–989
13.3 Amendments
13.4 Effective Date of 2005 Amendment
14 §509. Claims of codebtors
14.3 Amendments
14.4 Effective Date of 1984 Amendment
15 §510. Subordination
15.3 Amendments
16 §511. Rate of interest on tax claims
16.1 Effective Date
17 SUBCHAPTER II—DEBTOR'S DUTIES AND BENEFITS
18 §521. Debtor's duties
18.1 Historical and Revision Notes
18.2 senate report no. 95–989
18.3 References in Text
18.4 Amendments
18.5 Effective Date of 2009 Amendment
18.6 Effective Date of 2005 Amendment
18.7 Effective Date of 1986 Amendment
18.8 Effective Date of 1984 Amendment
18.9 Confidentiality of Tax Information
18.10 Providing Requested Tax Documents to the Court
19 §522. Exemptions
19.1 Adjustment of Dollar Amounts
19.2 Historical and Revision Notes
19.3 senate report no. 95–989
19.4 house report no. 95–595
19.5 References in Text
19.6 Amendments
19.7 Effective Date of 2005 Amendment
19.8 Effective Date of 1994 Amendment
19.9 Effective Date of 1986 Amendment
19.10 Effective Date of 1984 Amendment
19.11 Adjustment of Dollar Amounts
20 §523. Exceptions to discharge
20.1 Adjustment of Dollar Amounts
20.2 Historical and Revision Notes
20.3 senate report no. 95–989
20.4 house report no. 95–595
20.5 References in Text
20.7 Effective Date of 2005 Amendment
20.8 Effective Date of 1998 Amendment
20.9 Effective Date of 1996 Amendment
20.10 Effective Date of 1994 Amendment
20.11 Effective Date of 1990 Amendments
20.12 Effective Date of 1986 Amendment
20.13 Effective Date of 1984 Amendment
20.14 Effective Date of 1981 Amendment
20.15 Adjustment of Dollar Amounts
21 §524. Effect of discharge
21.1 Historical and Revision Notes
21.2 senate report no. 95–989
21.3 References in Text
21.4 Amendments
21.5 Effective Date of 2005 Amendment
21.6 Effective Date of 1994 Amendment
21.7 Effective Date of 1986 Amendment
21.8 Effective Date of 1984 Amendment
21.9 Construction
22 §525. Protection against discriminatory treatment
22.2 References in Text
22.3 Amendments
22.4 Effective Date of 2005 Amendment
22.5 Effective Date of 1994 Amendment
22.6 Effective Date of 1984 Amendment
23 §526. Restrictions on debt relief agencies
23.2 Amendments
23.3 Effective Date
24 §527. Disclosures
24.2 Effective Date
25 §528. Requirements for debt relief agencies
26 SUBCHAPTER III—THE ESTATE
27 §541. Property of the estate
27.1 Adjustment of Dollar Amounts
27.2 Historical and Revision Notes
27.3 senate report no. 95–989
27.4 References in Text
27.5 Amendments
27.6 Effective Date of 2005 Amendment
27.7 Effective Date of 1994 Amendment
27.8 Effective Date of 1992 Amendment
27.9 Effective Date of 1984 Amendment
27.10 Adjustment of Dollar Amounts
28 §542. Turnover of property to the estate
28.1 Historical and Revision Notes
28.2 senate report no. 95–989
28.3 Amendments
28.4 Effective Date of 1994 Amendment
28.5 Effective Date of 1984 Amendment
29 §543. Turnover of property by a custodian
29.1 Historical and Revision Notes
29.2 senate report no. 95–989
29.4 Effective Date of 1994 Amendment
29.5 Effective Date of 1984 Amendment
30 §544. Trustee as lien creditor and as successor to certain creditors and purchasers
30.1 Historical and Revision Notes
30.2 senate report no. 95–989
30.3 Amendments
30.4 Effective Date of 1998 Amendment
30.5 Effective Date of 1984 Amendment
30.6 Construction of 1998 Amendment
31 §545. Statutory liens
31.1 Historical and Revision Notes
31.2 senate report no. 95–989
31.3 References in Text
31.5 Effective Date of 2005 Amendment
31.6 Effective Date of 1984 Amendment
32 §546. Limitations on avoiding powers
32.1 Historical and Revision Notes
32.2 senate report no. 95–989
32.3 References in Text
32.4 Amendments
32.5 Effective Date of 2006 Amendment
32.6 Effective Date of 2005 Amendment
32.7 Effective Date of 1998 Amendment
32.8 Effective Date of 1994 Amendment
32.9 Effective Date of 1986 Amendment
32.10 Effective Date of 1984 Amendment
33 §547. Preferences
33.1 Adjustment of Dollar Amounts
33.2 Historical and Revision Notes
33.3 senate report no. 95–989
33.4 Amendments
33.5 Effective Date of 2005 Amendment
33.6 Effective Date of 1994 Amendment
33.7 Effective Date of 1986 Amendment
33.8 Effective Date of 1984 Amendment
33.9 Adjustment of Dollar Amounts
34 §548. Fraudulent transfers and obligations
34.1 Historical and Revision Notes
34.2 senate report no. 95–989
34.3 References in Text
34.5 Effective Date of 2005 Amendment
34.6 Effective Date of 1998 Amendment
34.7 Effective Date of 1994 Amendment
34.8 Effective Date of 1986 Amendment
34.9 Effective Date of 1984 Amendment
35 §549. Postpetition transactions
35.1 Historical and Revision Notes
35.2 senate report no. 95–989
35.3 Amendments
35.4 Effective Date of 2005 Amendment
35.5 Effective Date of 1994 Amendment
35.6 Effective Date of 1986 Amendment
35.7 Effective Date of 1984 Amendment
36 §550. Liability of transferee of avoided transfer
36.1 Historical and Revision Notes
36.2 senate report no. 95–989
36.3 Amendments
36.4 Effective Date of 1994 Amendment
36.5 Effective Date of 1984 Amendment
37 §551. Automatic preservation of avoided transfer
37.1 Historical and Revision Notes
37.2 senate report no. 95–989
38 §552. Postpetition effect of security interest
38.1 Historical and Revision Notes
38.2 senate report no. 95–989
38.3 house report no. 95–595
38.4 Amendments
38.5 Effective Date of 2005 Amendment
38.6 Effective Date of 1994 Amendment
38.7 Effective Date of 1984 Amendment
39 §553. Setoff
39.1 Historical and Revision Notes
39.2 senate report no. 95–989
39.3 Amendments
39.4 Effective Date of 2005 Amendment
39.5 Effective Date of 1994 Amendment
39.6 Effective Date of 1984 Amendment
40 §554. Abandonment of property of the estate
40.1 Historical and Revision Notes
40.2 senate report no. 95–989
40.3 Amendments
40.4 Effective Date of 1986 Amendment
40.5 Effective Date of 1984 Amendment
41 §555. Contractual right to liquidate, terminate, or accelerate a securities contract
41.3 Effective Date of 2005 Amendment
41.4 Effective Date of 1994 Amendment
41.5 Effective Date of 1984 Amendment
42 §556. Contractual right to liquidate, terminate, or accelerate a commodities contract or forward contract
42.1 References in Text
42.2 Amendments
42.3 Effective Date of 2005 Amendment
42.4 Effective Date of 1994 Amendment
43 §557. Expedited determination of interests in, and abandonment or other disposition of grain assets
43.2 Effective Date of 1986 Amendment
43.3 Effective Date
44 §558. Defenses of the estate
44.1 Effective Date
45 §559. Contractual right to liquidate, terminate, or accelerate a repurchase agreement
45.3 Effective Date of 2005 Amendment
45.4 Effective Date of 1994 Amendment
45.5 Effective Date
46 §560. Contractual right to liquidate, terminate, or accelerate a swap agreement
46.1 References in Text
46.2 Amendments
46.3 Effective Date of 2005 Amendment
47 §561. Contractual right to terminate, liquidate, accelerate, or offset under a master netting agreement and across contracts; proceedings under chapter 15
47.2 Effective Date
48 §562. Timing of damage measurement in connection with swap agreements, securities contracts, forward contracts, commodity contracts, repurchase agreements, and master netting agreements
48.1 Effective Date
Sec.501.Filing of proofs of claims or interests.502.Allowance of claims or interests.503.Allowance of administrative expenses.504.Sharing of compensation.505.Determination of tax liability.506.Determination of secured status.507.Priorities.508.Effect of distribution other than under this title.509.Claims of codebtors.510.Subordination.511.Rate of interest on tax claims. SUBCHAPTER II—DEBTOR'S DUTIES AND BENEFITS
521.Debtor's duties.522.Exemptions.523.Exceptions to discharge.524.Effect of discharge.525.Protection against discriminatory treatment.526.Restrictions on debt relief agencies.527.Disclosures.528.Requirements for debt relief agencies. SUBCHAPTER III—THE ESTATE
541.Property of the estate.542.Turnover of property to the estate.543.Turnover of property by a custodian.544.Trustee as lien creditor and as successor to certain creditors and purchasers.545.Statutory liens.546.Limitations on avoiding powers.547.Preferences.548.Fraudulent transfers and obligations.549.Postpetition transactions.550.Liability of transferee of avoided transfer.551.Automatic preservation of avoided transfer.552.Postpetition effect of security interest.553.Setoff.554.Abandonment of property of the estate.555.Contractual right to liquidate, terminate, or accelerate a securities contract.556.Contractual right to liquidate, terminate, or accelerate a commodities contract or forward contract.557.Expedited determination of interests in, and abandonment or other disposition of grain assets.558.Defenses of the estate.559.Contractual right to liquidate, terminate, or accelerate a repurchase agreement.560.Contractual right to liquidate, terminate, or accelerate a swap agreement.561.Contractual right to terminate, liquidate, accelerate, or offset under a master netting agreement and across contracts; proceedings under chapter 15.562.Timing of damage measure in connection with swap agreements, securities contracts, forward contracts, commodity contracts, repurchase agreements, and master netting agreements. Amendments
2010—Pub. L. 111–327, §2(a)(50), Dec. 22, 2010, 124 Stat. 3562, substituted “and master netting agreements” for “or master netting agreements” in item 562.
2005—Pub. L. 109–8, title II, §§227(b), 228(b), 229(b), title VII, §704(b), title IX, §§907(k)(2), (p)(1), 910(a)(2), Apr. 20, 2005, 119 Stat. 69, 71, 72, 126, 181, 182, 184, added items 511, 526 to 528, 561 and 562 and substituted “Contractual right to liquidate, terminate, or accelerate a securities contract” for “Contractual right to liquidate a securities contract” in item 555, “Contractual right to liquidate, terminate, or accelerate a commodities contract or forward contract” for “Contractual right to liquidate a commodity contract or forward contract” in item 556, “Contractual right to liquidate, terminate, or accelerate a repurchase agreement” for “Contractual right to liquidate a repurchase agreement” in item 559, and “Contractual right to liquidate, terminate, or accelerate a swap agreement” for “Contractual right to terminate a swap agreement” in item 560.
1990—Pub. L. 101–311, title I, §106(b), June 25, 1990, 104 Stat. 268, added item 560.
1986—Pub. L. 99–554, title II, §283(q), Oct. 27, 1986, 100 Stat. 3118, amended items 557 to 559 generally, substituting “interests in, and abandonment or other disposition of grain assets” for “in and disposition of grain” in item 557.
1984—Pub. L. 98–353, title III, §§352(b), 396(b), 470(b), July 10, 1984, 98 Stat. 361, 366, 380, added items 557, 558, and 559.
1982—Pub. L. 97–222, §6(b), July 27, 1982, 96 Stat. 237, added items 555 and 556.
I74legislative statementsThe House amendment adopts section 501(b) of the Senate amendment leaving the Rules of Bankruptcy Procedure free to determine where a proof of claim must be filed.
For purposes of section 501, a proof of “interest” includes the interest of a general or limited partner in a partnership, the interest of a proprietor in a sole proprietorship, or the interest of a common or preferred stockholder in a corporation.
1984—Subsec. (d). Pub. L. 98–353 inserted “502(e)(2),”.
Pub. L. 103–394, title III, §304(g), Oct. 22, 1994, 108 Stat. 4134, provided that: “Child support creditors or their representatives shall be permitted to appear and intervene without charge, and without meeting any special local court rule requirement for attorney appearances, in any bankruptcy case or proceeding in any bankruptcy court or district court of the United States if such creditors or representatives file a form in such court that contains information detailing the child support debt, its status, and other characteristics.”
I74legislative statementsThe House amendment adopts a compromise position in section 502(a) between H.R. 8200, as passed by the House, and the Senate amendment. Section 502(a) has been modified to make clear that a party in interest includes a creditor of a partner in a partnership that is a debtor under chapter 7. Since the trustee of the partnership is given an absolute claim against the estate of each general partner under section 723(c), creditors of the partner must have standing to object to claims against the partnership at the partnership level because no opportunity will be afforded at the partner's level for such objection.
As used in section 502(b)(7), the phrase “lease of real property” applies only to a “true” or “bona fide” lease and does not apply to financing leases of real property or interests therein, or to leases of such property which are intended as security.
Historically, the limitation on allowable claims of lessors of real property was based on two considerations. First, the amount of the lessor's damages on breach of a real estate lease was considered contingent and difficult to prove. Partly for this reason, claims of a lessor of real estate were not provable prior to the 1934 amendments, to the Bankruptcy Act (former title 11). Second, in a true lease of real property, the lessor retains all risks and benefits as to the value of the real estate at the termination of the lease. Historically, it was, therefore, considered equitable to limit the claims of real estate lessor.
However, these considerations are not present in “lease financing” transactions where, in substance, the “lease” involves a sale of the real estate and the rental payments are in substance the payment of principal and interest on a secured loan or sale. In a financing lease the lessor is essentially a secured or unsecured creditor (depending upon whether his interest is perfected or not) of the debtor, and the lessor's claim should not be subject to the 502(b)(7) limitation. Financing “leases” are in substance installment sales or loans. The “lessors” are essentially sellers or lenders and should be treated as such for purposes of the bankruptcy law.
Section 502(j) of the House amendment is new. The provision codifies section 57k of the Bankruptcy Act (section 93(k) of former title 11).
Allowance of Claims or Interest: The House amendment adopts section 502(b)(9) of the House bill which disallows any tax claim resulting from a reduction of the Federal Unemployment Tax Act (FUTA) credit (sec. 3302 of the Internal Revenue Code (26 U.S.C. 3302)) on account of a tardy contribution to a State unemployment fund if the contribution is attributable to ways or other compensation paid by the debtor before bankruptcy. The Senate amendment allowed this reduction, but would have subordinated it to other claims in the distribution of the estate's assets by treating it as a punitive (nonpecuniary loss) penalty. The House amendment would also not bar reduction of the FUTA credit on account of a trustee's late payment of a contribution to a State unemployment fund if the contribution was attributable to a trustee's payment of compensation earned from the estate.
Subsection (b) prescribes the grounds on which a claim may be disallowed. The court will apply these standards if there is an objection to a proof of claim. The burden of proof on the issue of allowance is left to the Rules of Bankruptcy Procedure. Under the current chapter XIII rules, a creditor is required to prove that his claim is free from usury, rule 13–301. It is expected that the rules will make similar provision for both liquidation and individual repayment plan cases. See Bankruptcy Act §656(b) (section 1056(b) of former title 11); H.R. 31, 94th Cong., 1st sess., sec. 6–104(a) (1975).
Paragraph (3) requires disallowance of a claim to the extent that the creditor may offset the claim against a debt owing to the debtor. This will prevent double recovery, and permit the claim to be filed only for the balance due. This follows section 68 of the Bankruptcy Act (section 108 of former title 11).
Paragraph (5) prevents overreaching by the debtor's attorneys and concealing of assets by debtors. It permits the court to examine the claim of a debtor's attorney independently of any other provision of this subsection, and to disallow it to the extent that it exceeds the reasonable value of the attorneys’ services.
Historically, the limitation on allowable claims of lessors of real property was based on two considerations. First, the amount of the lessors damages on breach of a real estate lease was considered contingent and difficult to prove. Partly for this reason, claims of a lessor of real estate were not provable prior to the 1934 amendments to the Bankruptcy Act (former title 11). Second, in a true lease of real property, the lessor retains all risk and benefits as to the value of the real estate at the termination of the lease. Historically, it was, therefore, considered equitable to limit the claims of a real estate lessor.
Subsection (f) specifies that “involuntary gap” creditors receive the same treatment as prepetition creditors. Under the allowance provisions of this subsection, knowledge of the commencement of the case will be irrelevant. The claim is to be allowed “the same as if such claim had arisen before the date of the filing of the petition.” Under voluntary petition, proposed 11 U.S.C. 303(f), creditors must be permitted to deal with the debtor and be assured that their claims will be paid. For purposes of this subsection, “creditors” include governmental units holding claims for tax liabilities incurred during the period after the petition is filed and before the earlier of the order for relief or appointment of a trustee.
Paragraph (9) (of subsec. (b)) requires disallowance of certain employment tax claims. These relate to a Federal tax credit for State unemployment insurance taxes which is disallowed if the State tax is paid late. This paragraph disallows the Federal claim for the tax the same as if the credit had been allowed in full on the Federal return.
2005—Subsec. (b)(9). Pub. L. 109–8, §716(d), inserted “, and except that in a case under chapter 13, a claim of a governmental unit for a tax with respect to a return filed under section 1308 shall be timely if the claim is filed on or before the date that is 60 days after the date on which such return was filed as required” before period at end.
Subsec. (i). Pub. L. 103–394, §304(h)(1), substituted “507(a)(8)” for “507(a)(7)”.
1986—Subsec. (b)(6)(A)(ii). Pub. L. 99–554, §283(f)(1), substituted “repossessed” for “reposessed”.
Subsec. (i). Pub. L. 99–554, §283(f)(2), substituted “507(a)(7)” for “507(a)(6)”.
1984—Subsec. (a). Pub. L. 98–353, §445(a), inserted “general” before “partner”.
Subsec. (b). Pub. L. 98–353, §445(b)(1), (2), in provisions preceding par. (1), inserted “(e)(2),” after “subsections” and “in lawful currency of the United States” after “claim”.
Subsec. (b)(1). Pub. L. 98–353, §445(b)(3), substituted “and” for “, and unenforceable against”.
Subsec. (b)(3). Pub. L. 98–353, §445(b)(5), inserted “the” after “exceeds”.
Pub. L. 98–353, §445(b)(4), struck out par. (3) “such claim may be offset under section 553 of this title against a debt owing to the debtor;”, and redesignated par. (4) as (3).
Subsec. (b)(5). Pub. L. 98–353, §445(b)(6), substituted “such claim” for “the claim” and struck out the comma after “petition”.
Subsec. (b)(7). Pub. L. 98–353, §445(b)(7)(A), inserted “the claim of an employee” before “for damages”.
Subsec. (b)(7)(A)(i). Pub. L. 98–353, §445(b)(7)(B), substituted “or” for “and”.
Subsec. (b)(7)(B). Pub. L. 98–353, §445(b)(7)(C), (D), substituted “any” for “the” and inserted a comma after “such contract”.
Subsec. (c)(1). Pub. L. 98–353, §445(c)(1), inserted “the” before “fixing” and substituted “administration” for “closing”.
Subsec. (c)(2). Pub. L. 98–353, §445(c)(2), inserted “right to payment arising from a” after “any” and struck out “if such breach gives rise to a right to payment” after “breach of performance”.
Subsec. (e)(1). Pub. L. 98–353, §445(d)(1), (2), in provisions preceding subpar. (A) substituted “, (b), and (c)” for “and (b)” and substituted “or has secured” for “, or has secured,”.
Subsec. (e)(1)(B). Pub. L. 98–353, §445(d)(3), inserted “or disallowance” after “allowance”.
Subsec. (e)(1)(C). Pub. L. 98–353, §445(d)(4), substituted “asserts a right of subrogation to the rights of such creditor” for “requests subrogation” and struck out “to the rights of such creditor” after “of this title”.
Subsec. (h). Pub. L. 98–353, §445(e), substituted “522” for “522(i)”.
I74legislative statementsSection 503(a) of the House amendment represents a compromise between similar provisions in the House bill and the Senate amendment by leaving to the Rules of Bankruptcy Procedure the determination of the location at which a request for payment of an administrative expense may be filed. The preamble to section 503(b) of the House bill makes a similar change with respect to the allowance of administrative expenses.
Subsection (b) specifies the kinds of administrative expenses that are allowable in a case under the bankruptcy code. The subsection is derived mainly from section 64a(1) of the Bankruptcy Act (section 104(a)(1) of former title 11), with some changes. The actual, necessary costs and expenses of preserving the estate, including wages, salaries, or commissions for services rendered after the order for relief, and any taxes on, measured by, or withheld from such wages, salaries, or commissions, are allowable as administrative expenses.
Taxes which the Internal Revenue Service may find due after giving the trustee a so-called “quickie” tax refund and later doing an audit of the refund are also payable as administrative expenses. The tax code (title 26) permits the trustee of an estate which suffers a net operating loss to carry back the loss against an earlier profit year of the estate or of the debtor and to obtain a tentative refund for the earlier year, subject, however, to a later full audit of the loss which led to the refund. The bill, in effect, requires the Internal Revenue Service to issue a tentative refund to the trustee (whether the refund was applied for by the debtor or by the trustee), but if the refund later proves to have been erroneous in amount, the Service can request that the tax attributable to the erroneous refund be payable by the estate as an administrative expense.
Compensation and reimbursement awarded officers of the estate under section 330 are allowable as administrative expenses. Actual, necessary expenses, other than compensation of a professional person, incurred by a creditor that files an involuntary petition, by a creditor that recovers property for the benefit of the estate, by a creditor that acts in connection with the prosecution of a criminal offense relating to the case, by a creditor, indenture, trustee, equity security holder, or committee of creditors or equity security holders (other than official committees) that makes a substantial contribution to a reorganization or municipal debt adjustment case, or by a superseded custodian, are all allowable administrative expenses. The phrase “substantial contribution in the case” is derived from Bankruptcy Act §§242 and 243 (sections 642 and 643 of former title 11). It does not require a contribution that leads to confirmation of a plan, for in many cases, it will be a substantial contribution if the person involved uncovers facts that would lead to a denial of confirmation, such as fraud in connection with the case.
Paragraph (4) permits reasonable compensation for professional services rendered by an attorney or an accountant of an equity whose expense is compensable under the previous paragraph. Paragraph (5) permits reasonable compensation for an indenture trustee in making a substantial contribution in a reorganization or municipal debt adjustment case. Finally, paragraph (6) permits witness fees and mileage as prescribed under chapter 119 (§2041 et seq.) of title 28.
2005—Subsec. (b)(1)(A). Pub. L. 109–8, §329, amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “the actual, necessary costs and expenses of preserving the estate, including wages, salaries, or commissions for services rendered after the commencement of the case;”.
Subsec. (b)(1)(B)(i). Pub. L. 109–8, §712(b), inserted “whether secured or unsecured, including property taxes for which liability is in rem, in personam, or both,” before “except”.
Subsec. (b)(4). Pub. L. 109–8, §1208, inserted “subparagraph (A), (B), (C), (D), or (E) of” before “paragraph (3)”.
1994—Subsec. (a). Pub. L. 103–394, §213(c), inserted “timely” after “may” and “, or may tardily file such request if permitted by the court for cause” before period at end.
Subsec. (b)(1)(B)(i). Pub. L. 103–394, §304(h)(2), substituted “507(a)(8)” for “507(a)(7)”.
1986—Subsec. (b)(1)(B)(i). Pub. L. 99–554, §283(g)(1), substituted “507(a)(7)” for “507(a)(6)”.
Subsec. (b)(5). Pub. L. 99–554, §283(g)(2), inserted “and” after “title;”.
Subsec. (b)(6). Pub. L. 99–554, §283(g)(3), substituted a period for “; and”.
1984—Subsec. (b). Pub. L. 98–353, §446(1), struck out the comma after “be allowed” in provisions preceding par. (1).
Subsec. (b)(1)(C). Pub. L. 98–353, §446(2), struck out the comma after “credit”.
Subsec. (b)(2). Pub. L. 98–353, §446(3), inserted “(a)” after “330”.
Subsec. (b)(3). Pub. L. 98–353, §446(4), inserted a comma after “paragraph (4) of this subsection”.
Subsec. (b)(3)(C). Pub. L. 98–353, §446(5), struck out the comma after “case”.
Subsec. (b)(5). Pub. L. 98–353, §446(6), struck out “and” after “title;”.
Subsec. (b)(6). Pub. L. 98–353, §446(7), substituted “; and” for period at end.
I74senate report no. 95–989Section 504 prohibits the sharing of compensation, or fee splitting, among attorneys, other professionals, or trustees. The section provides only two exceptions: partners or associates in the same professional association, partnership, or corporation may share compensation inter se; and attorneys for petitioning creditors that join in a petition commencing an involuntary case may share compensation.
I74legislative statementsSection 505 of the House amendment adopts a compromise position with respect to the determination of tax liability from the position taken in H.R. 8200 as passed by the House and in the Senate amendment.
Determinations of tax liability: Authority of bankruptcy court to rule on merits of tax claims.—The House amendment authorizes the bankruptcy court to rule on the merits of any tax claim involving an unpaid tax, fine, or penalty relating to a tax, or any addition to a tax, of the debtor or the estate. This authority applies, in general, whether or not the tax, penalty, fine, or addition to tax had been previously assessed or paid. However, the bankruptcy court will not have jurisdiction to rule on the merits of any tax claim which has been previously adjudicated, in a contested proceeding, before a court of competent jurisdiction. For this purpose, a proceeding in the U.S. Tax Court is to be considered “contested” if the debtor filed a petition in the Tax Court by the commencement of the case and the Internal Revenue Service had filed an answer to the petition. Therefore, if a petition and answer were filed in the Tax Court before the title II petition was filed, and if the debtor later defaults in the Tax Court, then, under res judicata principles, the bankruptcy court could not then rule on the debtor's or the estate's liability for the same taxes.
Under the Internal Revenue Code (title 26), a suit for refund of Federal taxes cannot be filed until 6 months after a claim for refund is filed with the Internal Revenue Service (sec. 6532(a) (title 26)). Because of the bankruptcy aim to close the estate as expeditiously as possible, the House amendment shortens to 120 days the period for the Internal Revenue Service to decide the refund claim.
The rules are more complex where the debtor is an individual under chapter 7, 11, or 13. An individual debtor or the tax authority can, as under section 17c of the present Bankruptcy Act (section 35(c) of former title 11), file a request that the bankruptcy court determine the debtor's personal liability for the balance of any nondischargeable tax not satisfied from assets of the estate. The House amendment intends to retain these procedures and also adds a rule staying commencement or continuation of any proceeding in the Tax Court after the bankruptcy petition is filed, unless and until that stay is lifted by the bankruptcy judge under section 362(a)(8). The House amendment also stays assessment as well as collection of a prepetition claim against the debtor (sec. 362(a)(6)). A tax authority would not, however, be stayed from issuing a deficiency notice during the bankruptcy case (sec. (b)(7)) (sec. 362(b)(8)). The Senate amendment repealed the existing authority of the Internal Revenue Service to make an immediate assessment of taxes upon bankruptcy (sec. 6871(a) of the code (title 26). See section 321 of the Senate bill. As indicated, the substance of that provision, also affecting State and local taxes, is contained in section 362(a)(6) of the House amendment. The statute of limitations is tolled under the House amendment while the bankruptcy case is pending.
Where a proceeding is pending in the Tax Court at the commencement of the bankruptcy case, the commencement of the bankruptcy case automatically stays further action in the Tax Court case unless and until the stay is lifted by the bankruptcy court. The Senate amendment repealed a provision of the Internal Revenue case barring a debtor from filing a petition in the Tax Court after commencement of a bankruptcy case (sec. 6871(b) of the code (26 U.S.C. 6871(b))). See section 321 of the Senate bill. As indicated earlier, the equivalent of the code amendment is embodied in section 362(a)(8) of the House amendment, which automatically stays commencement or continuation of any proceeding in the Tax Court until the stay is lifted or the case is terminated. The stay will permit sufficient time for the bankruptcy trustee to determine if he desires to join the Tax Court proceeding on behalf of the estate. Where the trustee chooses to join the Tax Court proceeding, it is expected that he will seek permission to intervene in the Tax Court case and then request that the stay on the Tax Court proceeding be lifted. In such a case, the merits of the tax liability will be determined by the Tax Court, and its decision will bind both the individual debtor as to any taxes which are nondischargeable and the trustee as to the tax claim against the estate.
The bankruptcy judge could, however, lift the