An Act to amend the Bankruptcy Act, approved July 1, 1898, and acts amendatory thereof and supplementary thereto; and to repeal subdivision b of section 64, subdivision h of section 70, and sections 118, 354, and 643 thereof and all acts and parts of acts inconsistent therewith
PL 82-456 (S.2234), enacted 07/07/1952

PUBLIC LAW 456-JULY 7, 1952 
[66 ST A T , 
July 7, 1952 
[S. 2234] 
Public Law 456 
CHAPTER 579 
AN ACT 
To amend the Bankruptcy Act, approved July 1, 1898, and Acts amendatory 
thereof and supplementary thereto; and to repeal subdivision b of section 64, 
subdivision h of section 70, and sections 118, 354, and 643 thereof and all Acts 
and parts of Acts inconsistent therewith. 
Bankruptcy Act, 
amendments. 
30 Stat. 544. 
11 use 1. 
Definitions. 
11 u s e 11. 
B a n k r up t c y 
c o u r t s . 
Jurisdiction. 
Estates. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assemhled^ That (a) paragraph 
(3) of section 1 of the Bankruptcy Act, approved July 1, 1898, as 
amended, is amended to read as follows: 
"(3) 'Appellate courts' shall include the United States courts 
of appeals and the Supreme Court of the United States;". 
(b) Paragraph (5a) of such section is amended to read as follows: 
"(5a) 'Circuit' shall mean judicial circuit;". 
(c) Paragraph (7a) of such section is amended to read as follows: 
"(7a) 'Conference' shall mean the Judicial Conference of the 
United States;". 
(d) Paragraph (8a) of such section is amended to read as follows: 
" (8a) 'Council' shall mean the Judicial Council of the circuit;". 
(e) Paragraph (10) of such section is amended to read as follows: 
"(10) 'Courts of bankruptcy' shall include the United States 
district courts and the district courts of the Territories and pos-
sessions to which this Act is or may hereafter be applicable;". 
(f) Paragraph (14a) of such section is amended to read as follows: 
"(14a) 'Director' shall mean the Director of the Administra-
tive Office of the United States Courts;". 
(g) Paragraph (24) of such section is amended to read as follows: 
"(24) 'Petition' shall mean a document filed in a court of bank-
ruptcy or with a clerk thereof initiating a proceeding under this 
Act;". 
(h) Paragraph (30) of such section is amended to read as follows: 
"(30) 'Transfer' shall include the sale and every other and 
different mode, direct or indirect, of disposing of or of parting 
with property or with an interest therein or with the possession 
thereof or of fixing a lien upon property or upon an interest 
therein, absolutely or conditionally, voluntarily or involuntarily, 
by or without judicial proceedings, as a conveyance, sale, assign-
ment, payment, pledge, mortgage, lien, encumbrance, 
gift, 
security, or otherwise; the retention of a security title to property 
delivered to a debtor shall be deemed a transfer suffered by such 
debtor;". 
SEC. 2. (a) Paragraph (1) of subdivision a of section 2 of such 
Act, as amended, is amended to read as follows: 
"(1) Adjudge persons bankrupt who have had their principal 
place of business, resided or had their domicile within their respec-
tive territorial jurisdictions for the preceding six months, or for 
a longer portion of the preceding six months than in any other 
jurisdiction, or w4io do not have their principal place of business, 
reside, or have their domicile within the United States, but have 
property w^ithin their jurisdictions, or who have been adjudged 
bankrupts by courts of competent jurisdiction without the United 
States, and have property within their jurisdictions, or in any 
cases transferred to them pursuant to this Act;". 
(b) Paragraph (7) of subdivision a of such section is amended 
to read as follows: 
"(7) Cause the estates of bankrupts to be collected, reduced to 
money, and distributed, and determine controversies in relation 
thereto, except as herein otherwise provided, and determine and 
R e c e i v e r s o r 
trustees. 
1 1 u s e 
205 
66 S T A T . ] 
PUBLIC LAW 4 5 6 - J U L Y 7, 1952 
421 
liquidate all inchoate or vested interests of the bankrupt's spouse 
in the property of any estate whenever, under the applicable laws 
of the State, creditors are empowered to compel such spouse to 
accept a money satisfaction for such interest; and where in a 
controversy arising in a proceeding under this Act an adverse 
party does not interpose objection to the summary jurisdiction of 
the court of bankruptcy, by answer or motion filed before the 
expiration of the time prescribed by law or rule of court or fixed or 
extended by order of court for the filing of an answer to the 
petition, motion or other pleading to which he is adverse, he 
shall be deemed to have consented to such jurisdiction;". 
(c) Paragraph (21) of subdivision a of such section is amended 
to read as follows: 
"(21) Kequire receivers or trustees appointed in proceedings 
not under this Act, assignees for the benefit of creditors, and 
agents authorized to take possession of or to liquidate a person's 
property to deliver the property in their possession or under their 
control to the receiver or trustee appointed under this Act or, 
where an arrangement or a plan under this Act has been con-
firmed and such property has not prior thereto been delivered to a 
receiver or trustee appointed under this Act, to deliver such prop-
erty to the debtor or other person entitled to such property 
according to the provisions of the arrangement or plan, and in 
all such cases to account to the court for the disposition by them 
of the property of such bankrupt or debtor: Provided^ however^ 
That such delivery and accounting shall not be required, except 
in proceedings under section 77 and chapters X and X I I of this chs.^o'^if. 
Act, if the receiver or trustee was appointed, the assignment was 
made, or the agent was authorized more than four months prior 
to the date of bankruptcy. Upon such accounting, the court shall 
reexamine and determine the propriety and reasonableness of all 
disbursements made out of such property by such receiver, trustee, 
assignee, or agent, either to himself or to others, for services and 
expenses under such receivership, trusteeship, assignment, or 
agency, and shall, unless such disbursements have been approved, 
upon notice to creditors and other parties in interest, by a court 
of competent jurisdiction prior to the proceeding under this Act, 
surcharge such receiver, trustee, assignee, or agent the amount of 
any disbursement determined by the court to have been improper 
or excessive." 
SEC. 3. (a) Subdivision a of section 3 of such Act, as amended, is 
^ use 21. 
amended to read as follows: 
"a. Acts of bankruptcy by a person shall consist of his having 
(1) concealed, removed, or permitted to be concealed or removed any 
part of his property, with intent to hinder, delay, or defraud his 
creditors or any of them, or made or suffered a transfer of any of 
his property, fraudulent under the provisions of section 67 or 70 of 
n use 107,110.. 
this Act; or (2) made or suffered a preferential transfer, as defined in 
subdivision a of section 60 of this Act; or (3) suffered or permitted, 
^^ "^^ ^^• 
while insolvent, any creditor to obtain a lien upon any of his property 
through legal proceedings or distraint and not having vacated or dis-
charged such lien within thirty days from the date thereof or at least 
five days before the date set for any sale or other disposition of such 
property; or (4) made a general assignment for the benefit of his 
creditors; or (5) while insolvent or unable to pay his debts as they 
mature, procured, permitted, or suffered voluntarily or involuntarily 
the appointment of a receiver or trustee to take charge of his property; 
or (6) admitted in writing his inability to pay his debts and his will-
ingness to be adjudged a bankrupt." 
A c t s of bank-
ruptcy. 
PUBLIC LAW 456-JULY 7, 1952 
[66 STAT. 
(b) Subdivision b of such section is amended to read as follows: 
Petition. 
"b. A petition may be filed against a person within four months 
after the commission of an act of bankruptcy. 
Such time with respect 
to the third act of bankruptcy shall expire four months after the 
date the lien through legal proceedings or distraint was obtained 
and, with respect to the first or fourth act of bankruptcy, such time 
shall not expire until four months after the date when the transfer 
or assignment became so far perfected that no bona fide purchaser 
from the debtor could thereafter have acquired any rights in the 
property so transferred or assigned superior to the rights of the trans-
feree or assignee therein, and such time with respect to the second 
act of bankruptcy shall not expire until four months after the date 
when the transfer became perfected as prescribed in subdivision 
11 use 96. 
a of section 60 of this Act. 
For the purposes of this section, it is 
sufficient if intent to hinder, delay or defraud under the first act of 
bankruptcy, where such intent is an element of such act, or if insol-
vency under the second act of bankruptcy, exists either at the time 
when the transfer was made or at the time when it became pel fected, 
as hereinabove provided." 
11 use 25. 
gj;c. 4. Clause (8) of subdivision a of section 7 of such Act, as 
amended, is amended to read as follows: 
ruS:""^^ °^ ^^"^' 
"(^) prepare, make oath to, and file in court within five days 
after adjudication, if an involuntary bankrupt, and with his peti-
tion, if a voluntary bankrupt, a schedule of his property, showing 
the amount and kind of property, the location thereof and its 
money value, in detail; and a list of all his creditors, including all 
' ) <' . 
persons asserting contingent, unliquidated, or disputed claims, 
showing their residences or places of business, if known, or if 
unknown that fact to be stated, the amount due to or claimed by 
each of them, the consideration thereof, the security held by 
them, if any, and what claims, if any, are contingent, unliquidated, 
or disputed; and a claim for such exemptions as he may be entitled 
to; all in triplicate, one copy for the clerk, one for the referee, 
and one for the trustee: Provided, however, That the court may 
for cause shown grant further time for the filing of such sched-
ules if, with his petition in a voluntary proceeding or with his 
application to have such time extended in an involuntary pro-
ceeding, the bankrupt files a list of all such creditors and their 
addresses;". 
11 use 29. 
gj^c 5^ Subdivision a of section 11 of such Act, as amended, is 
amended to read as follows: 
S""S' 
"a. A suit which is founded upon a claim from which a discharge 
would be a release, and which is pending against a person at the time 
of the filing of a petition by or against him, shall be stayed until an 
adjudication or the dismissal of the petition; if such person is 
adjudged bankrupt, such action may be further stayed until the ques-
tion of his discharge is determined by the court after a hearing, or 
. . 1 
by the bankrupt's filing a waiver of, or having lost, his right to a 
discharge, or, in the case of a corporation, by its failure to file an 
application for a discharge within the time prescribed under this 
Act: Provided, however, That such stay shall be vacated by the court 
if, in a proceeding under this Act commenced within six years prior 
to the date of the filing of the petition in bankruptcy, such person 
has been granted a discharge, or has had a composition confirmed, or 
has had an arrangement by way of composition confirmed, or has had 
a wage earner's plan by way of composition confirmed." 
11 use 32. 
SEC. 6. (a) Clause (5) of subdivision c of section 14 of such Act, as 
amended, is amended to read as follows: 
66 
S T A T . ] 
PUBLIC LAW 456-JULY 7, 1952 
423 
"(5) in a proceeding under this Act commenced within six 
years prior to the date of the filing of the petition in bankruptcy 
had been granted a discharge, or had a composition or an arrange-
ment by v/ay of composition or a wage earner's plan by way of 
composition confirmed under this Act;". 
(b) Subdivision e of such section is amended to read as follows: 
"e. If the bankrupt fails to appear at the hearing upon the objec-
tions to his application for a discharge, or having appeared refuses to 
submit himself to examination, or if the court finds after hearing upon 
notice that the bankrupt has failed without sufficient excuse to appear 
and submit himself to examination at the first meeting of creditors or 
at any meeting specially called for his examination, he shall be deemed 
to have waived his right to a discharge, and the court shall enter an 
order to that effect." 
SEC. 7. Subdivision a of section 18 of such Act, as amended, is 
amended to read as follows: 
"a. Upon the filing of a petition for involuntary bankruptcy, service 
thereof, with a writ of subpena, shall be made upon the person therein 
named as defendant. Upon the filing of a voluntary petition in behalf 
of a partnership by less than all of the general partners, service thereof, 
with a writ of subpena, shall be made upon the general partner or 
partners not parties to the filing of such petition. Such service shall 
be returnable within ten days, unless the court shall, for cause shown, 
fix a longer time, and shall be made at least five days prior to the return 
day, and in other respects shall be made in the same manner that 
service of summons is had upon the commencement of a civil action 
in the courts of the United States; but in case personal service cannot 
be made within the time allowed, then notice shall be given by publica-
tion in the same manner as provided by law for notice by publication 
in suits to enforce a legal or equitable lien in courts of the United 
States, except that, unless the court shall otherwise direct, the order 
shall be published only once and the return day shall be five days 
after such publication." 
SEC. 8. Subdivision k of section 21 of such Act, as amended, is 
amended to read as follows: 
"k. In all proceedings under this Act, the parties in interest shall 
be entitled to all rights and remedies granted by the Rules of Civil 
Procedure for the United States District Courts established from time 
to time by the Supreme Court pertaining to discovery, interrogatories, 
inspection and production of documents, and to the admission of 
execution and genuineness of instruments: Provided^ however^ That 
the limitations of time therein prescribed may be shortened by the 
court to expedite hearings." 
SEC. 9. (a) Subdivision a of section 24 of such Act, as amended, is 
amended to read as follows: 
"a. The United States courts of appeals, in vacation, in chambers, 
and during their respective terms, as now or as they may be hereafter 
held, are hereby invested with appellate jurisdiction from the several 
courts of bankruptcy in their respective jurisdictions in proceedings in 
bankruptcy, either interlocutory or final, and in controversies arising 
in proceedings in bankruptcy, to review, affirm, revise, or reverse, both 
in matters of law and in matters of fact: Provided^ however^ That the 
jurisdiction upon appeal from a judgment on a verdict rendered by a 
jury shall extend to matters of law only: And provided further^ That 
when any order, decree, or judgment involves less than $500, an appeal 
therefrom may be taken only upon allowance of the appellate court." 
(b) Subdivision c of such section is amended to read as follows: 
"c. The Supreme Court of the United States is hereby vested with 
jurisdiction to review judgments, decrees, and orders of the United 
Discharges. 
11 u s e 41. 
P r o c e s s after 
filing of petition. 
11 use 44. 
Evidence. 
11 u s e 47. 
e o u r t s of ap-
peals. 
Supreme eourt. 
424 
PUBLIC LAW 456-JULY 7, 1952 
[66 ST A T , 
n use 55. 
T r a n s f 
cases. 
e r of 
11 u s e 67. 
D u t i e s of ref-
erees. 
' - 
States courts of appeals in proceedings under this Act in accordance 
with the provisions of the laws of the United States now in force or 
such as may hereafter bs enacted." 
11 use 48. 
SEC. 10. Subdivision a of section 25 of such Act, as amended, is 
amended to read as follows: 
Appeals. 
"a. Appeals under this Act to the United States courts of appeals 
shall be taken within thirty days after written notice to the aggrieved 
party of the entry of the judgment, order or decree complained of, 
proof of which notice shall be filed within five days after service or, 
if such notice be not served and filed, then within forty days from 
such entry." 
SEC. 11. Section 32 of such Act, as amended, is amended by letter-
ing the present section 32 as subdivision a and inserting in the 
section the following two subdivisions: 
"b. Where venue in any case filed under this Act is laid in the wrong 
court of bankruptcy, the judge may, in the interest of justice, upon 
timely and sufficient objection to venue being made, transfer the case 
to any other court of bankruptcy in which it could have been brought. 
"c. The judge may transfer any case under this Act to a court of 
bankruptcy in any other district, regardless of the location of the prin-
cipal assets of the bankrupt, or his principal place of business, or his 
residence, if the interests of the parties will be best served by such 
transfer." 
SEC. 12. Clause (9) of subdivision a of section 39 of such Act as 
amended, is amended to read as follows: 
"(9) transmit forthwith to the clerks all bonds filed with and 
approved by them, the originals of all orders made by them grant-
ing adjudications or dismissing the petitions as provided in this 
Act, and certified copies of all orders made by them, granting, 
denying, or revoking discharges or adjudging that bankrupts have 
waived their right to a discharge, confirming or refusing to con-
firm, or setting aside the confirmation of, arrangements or wage 
earner plans, and reinstating the proceedings or cases;". 
SEC. 13. Subdivision a of section 42 of such Act, as amended, is 
amended to read as follows: 
"a. The records of all proceedings in each case before a referee shall 
be kept in the manner as prescribed by the Supreme Court of the 
United States." 
SEC. 14. (a) Subdivision j of section 57 of such Act, as amended, 
is amended to read as follows: 
s- 
" j . Debts owing to the United States or to any State or any sub-
division thereof as a penalty or forfeiture shall not be allowed, except 
for the amount of the pecuniary loss sustained by the act, transaction, 
i 
or proceeding out of which the penalty or forfeiture arose, with 
reasonable and actual costs occasioned thereby and such interest as 
may have accrued on the amount of such loss according to law." 
(b) Subdivision n of such section is amended to read as follows: 
"n. Except as otherwise provided in this Act, all claims provable 
under this Act, including all claims of the United States and of any 
State or any subdivision thereof, shall be proved and filed in the 
manner provided in this section. 
Claims which are not filed within 
six months after the first date set for the first meeting of creditors 
shall not be allowed: Provided, however, That the court may, upon 
application before the expiration of such period and for cause shown, 
grant a reasonable fixed extension of time for the filing of claims by 
the United States or any State or any subdivision thereof: Provided 
further, That the right of infants and insane persons without guard-
« : 
ians, without notice of the bankruptcy proceedings, may continue six 
months longer: And provided further, That a claim arising in favor 
11 u s e 70. 
Records o f 
erees. 
11 u s e 93. 
Debts to U. 
ref-
Claims. 
66 S T A T . ] 
PUBLIC LAW 456-JULY 7, 1952 
425 
of a person by reason of the recovery by the trustee from such person 
of money or property, or the avoidance by the trustee of a lien held by 
such person, may be filed within thirty days from the date of such 
recovery or avoidance, but if the recovery is by way of a proceeding 
in which a final judgment has been entered against such person, the 
claim shall not be allowed if the money is not paid or the property 
is not delivered to the trustee within thirty days from the date of the 
rendering of such final judgment, or within such further time as the 
court may allow. 
When in any case all claims which have been duly 
allowed have been paid in full, claims not filed within the time here-
inabove prescribed may nevertheless be filed within such time as the 
court may fix or for cause shown extend and, if duly proved, shall be 
allowed against any surplus remaining in such case." 
SEC. 15. Clause (8) of subdivision a of section 58 of such Act, as 
amended, is amended to read as follows: 
" (8) all applications by receivers, ancillary receivers, marshals, 
trustees, committees, and attorneys for compensation from the 
estate for services rendered, specifying the amount and by whom 
made: Provided^ hoiDever, That where a creditors' committee has 
been appointed pursuant to this Act, the notice required by clauses 
(1), (4), and (6) of this subdivision shall be sent only to such 
committee and to the creditors w^ho have filed with the court a 
demand that all notices under this subdivision be mailed to them." 
SEC. 16. Subdivision b of section 59 of such Act, as amended, is 
amended to read as follows: 
"b. Three or more creditors who have provable claims liquidated as 
to amount and not contingent as to liability against any person which 
amount in the aggregate in excess of the value of securities held by 
them, if any, to $500 or over, or, if all of the creditors of such person 
are less than twelve in number, then one or more of such creditors 
whose claim or claims equal such amount, may file a petition to have 
him adjudged a bankrupt." 
SEC. 16a. Section 61 of such Act, as amended, is amended to read 
as follows: 
"SEC. 61. DEPOSITORIES FOR MONEY.—The judges of the several courts 
of bankruptcy shall designate, by order, banking institutions as 
depositories for the money of estates under this Act, as convenient 
as may be to the residences of receivers and trustees, and shall require 
from each such banking institution a good and sufficient bond with 
surety, to secure the prompt repayment of the deposit. Said judges 
may, in accordance with the provisions of, and the authority conferred 
in title 6, United States Code, section 15, accept the deposit of the 
securities therein designated, in lieu of a surety or sureties upon 
such bond and may, from time to time as occasion may require, by 
like order increase or decrease the number of depositories or the 
amount of any bond or other security or change such depositories: 
Provided^ That no security in the form of a bond or otherwise shall be 
required in the case of such part of the deposits as are insured under 
title 12, United States Code, section 1821: And provided further^ That 
depository banks shall place such securities, accepted for deposit in lieu 
of a surety or sureties upon depository bonds, in the custody of Federal 
Reserve banks or branches thereof designated by the judges of the 
several courts of bankruptcy, subject to the orders of such judges. 
All national banking associations designated as depositories, pursuant 
to the provisions of this section of this Act, are authorized to give 
such security as may be required. All pledges of securities hereto-
fore made for the purposes herein named are hereby ratified, validated, 
and approved. 
11 use 94. 
Notices. 
11 use 95. 
Petition for bank-
ruptcy. 
11 use 101. 
40 Stat. 1148. 
64 Stat. 884. 
426 
PUBLIC LAW 4 5 6-JULY 7, 1952 
[66 S T A T , 
11 use 102. 
Sharing of fees. 
11 use 103. 
Breach of con-
tract. 
11 use 104. 
Order of payment 
62 Stat. 689. 
18 use 151-155. 
11 use 105. 
Dividends. 
SEC. 17. Subdivision d of section 62 of such Act, as amended, is 
amended to read as follows: 
"d. A receiver or trustee or the attorney for any of them, or any 
other attorney, seeking compensation for services rendered by him 
in a proceeding under this Act or in connection with such proceeding, 
shall file with the court his petition setting forth the value and extent 
of the services rendered, the amount requested, and what allowances, 
if any, have theretofore been made to him. Such petition shall be 
accompanied by his aiSdavit stating whether an agreement or under-
standing exists between the petitioner and any other person for a 
division of compensation and, if so, the nature and particulars thereof. 
If satisfied that the petitioner has, in any form or guise, shared or 
agreed to share his compensation or in the compensation of any other 
person contrary to the provisions of subdivision c of this section, the 
court shall withhold all compensation from such petitioner." 
SEC. 18. Subdivision c of section 63 of such Act, as amended, is 
amended to read as follows: 
"c. Notwithstanding any State law to the contrary, the rejection 
of an executory contract or unexpired lease, as provided in this Act, 
shall constitute a breach of such contract or lease as of the date of 
the filing of the petition initiating a proceeding under this Act." 
SEC. 19. (a) Clause (1) of subdivision a of section 64 of such Act, 
as amended, is amended to read as follows: 
"(1) the actual and necessary costs and expenses of preserving 
the estate subsequent to filing the petition; the fees for the ref-
erees' salary fund and for the referees' expense fund; the filing 
fees paid by creditors in involuntary cases or by persons other 
than the bankrupts in voluntary cases; where property of the 
bankrupt, transferred or concealed by him either before or after 
the filing of the petition, shall have been recovered for the benefit 
of the estate of the bankrupt by the efforts and at the cost and 
expense of one or more creditors, the reasonable costs and expenses 
of such recovery; the costs and expenses of administration, in-
cluding the trustee's expenses in opposing the bankrupt's dis-
charge or in connection with the criminal prosecution of an 
offense punishable under chapter 9 of title 18 of the United States 
Code, or an offense concerning the business or property of the 
bankrupt punishable under other laws. Federal or State; the 
fees and mileage payable to witnesses as now or hereafter pro-
vided by the laws of the United States, and one reasonable attor-
ney's fee, for the professional services actually rendered, irre-
spective of the number of attorneys employed, to the petitioning 
creditors in involuntary cases and to the bankrupt in voluntary 
and involuntary cases, as the court may allow: Provided^ hovy-
ever, That where an order is entered in a proceeding under any 
chapter of this Act directing that bankruptcy be proceeded with, 
the costs and expenses of administration incurred in the ensuing 
bankruptcy proceeding shall have priority in advance of pay-
ment of the unpaid costs and expenses of administration, in-
cluding the allowances provided for in such chapter, incurred in 
the superseded proceeding and in the suspended bankruptcy pro-
ceeding, if any;", 
(b) Subdivision b of such section is hereby repealed. 
SEC. 20. Subdivision d of section 65 of such Act, as amended, is 
amended to read as follows: 
"d. Whenever a person shall have been adjudged a bankrupt by a 
court without the United States and also by a court of bankruptcy, 
all creditors with claims allowed by the court of bankruptcy who 
have not had a dividend paid or declared in their favor by the court 
66 S T A T . ] 
PUBLIC LAW 456-JULY 7, 1952 
427 
without the United States shall first be paid a dividend equal to that 
paid or declared in such foreign court in favor of other creditors of 
the same class under this Act, before creditors who have had a divi-
dend paid or declared in their favor by such foreign court shall be 
paid any amount in the court of bankruptcy." 
SEC. 21. (a) Paragraph (1) of subdivision a of section 67 of such 
Act, as amended, is amended to read as follows: 
"a. (1) Every lien against the property of a person obtained by 
attachment, judgment, levy, or other legal or equitable process or 
proceedings within four months before the filing of a petition initiat-
ing a proceeding under this Act by or against such person shall be 
deemed null and void (a) if at the time when such lien was obtained 
such person was insolvent or (b) if such lien was sought and per-
mitted in fraud of the provisions of this Act: Promded^ however^ 
That if such person is not finally adjudged a bankrupt in any pro-
ceeding under this Act and if no arrangement or plan is proposed and 
confirmed, such lien shall be deemed reinstated with the same effect 
as if it had not been nullified and voided." 
(b) Paragraph (2) of subdivision a of such section is amended to 
read as follows: 
"(2) If any lien deemed null and void under the provisions of 
paragraph (1) of this subdivision a, has been dissolved by the furnish-
ing of a bond or other obligation, the surety on which has been in-
demnified directly or indirectly by the transfer of or the creation of a 
lien upon any of the nonexempt property of a person before the filing 
of a petition initiating a proceeding under this Act by or against him, 
such indemnifying transfer or lien shall also be deemed null and void: 
Provided^ however^ That if such person is not finally adjudged a bank-
rupt in any proceeding under this Act, and if no arrangement or plan 
is proposed and confirmed, such transfer or lien shall be deemed rein-
stated with the same effect as if it had not been nullified and voided." 
(c) Subdivision b of such section is amended to read as follows: 
"b. The provisions of section 60 of this Act to the contrary not-
withstanding, statutory liens in favor of employees, contractors, 
mechanics, landlords, or other classes of persons, and statutory liens 
for taxes and debts owing to the United States or to any State 
or any subdivision thereof, created or recognized by the laws of the 
United States or of any State, may be valid against the trustee, even 
though arising or perfected while the debtor is insolvent and within 
four months prior to the filing of the petition initiating a proceed-
ing under this Act by or against him. 
Where by such laws such 
liens are required to be perfected and arise but are not perfected 
before bankruptcy, they may nevertheless be valid, if perfected 
within the time permitted by and in accordance with the require-
ments of such laws, except that if such laws require the liens to be 
perfected by the seizure of property, they shall instead be perfected by 
filing notice thereof with the court". 
(d) Subdivision c of such section is amended to read as follows: 
"c. Where not enforced by sale before the filing of a petition initiat-
ing a proceeding under this Act, and except where the estate of the 
bankrupt is solvent: (1) though valid against the trustee under sub-
division b of this section, statutory liens, including liens for taxes or 
debts owing to the United States or to any State or any subdivision 
thereof, on personal property not accompanied by possession of such 
property, and liens, whether statutory or not, of distress for rent shall 
be postponed in payment to the debts specified in clauses (1) and (2) 
of subdivision a of section 64 of this Act and such liens for wages or for 
rent shall be restricted in the amount of their payment to the same 
extent as provided for wages and rent respectively in subdivision a of 
11 use 107. 
Liens. 
Statutory liens. 
11 use 96. 
11 use 104. 
11 use ch. 10 
11 use 205. 
Fraudulent trans 
fers, etc. 
PUBLIC LAW 456-JULy 7, 1952 
[66 STAT. 
11 use 104. 
section 64 of this Act; and (2) the provisions of subdivision b of this 
section to the contrary notwithstanding, statutory liens created or 
recognized by the laws of any State for debts owing to any person, 
including any State or any subdivision thereof, on personal property 
not accompanied by possession of, or by levy upon or by sequestration 
"i - 
QY distraint of, such property, shall not be valid against the trustee: 
Promded, however, That so much of clause (1) of this subdivision c 
as restricts liens for wages and rent and clause (2) of this subdivision 
c shall not apply in proceedings under chapter X of this Act, unless 
an order shall be entered therein directing that bankruptcy be pro-
ceeded with, or in proceedings under section 77 of this Act. The court 
may on due notice order so much of any lien in excess of the restricted 
amount under clause (1) and any lien invalid under clause (2) of this 
subdivision c to be preserved for the benefit of the estate and, in any 
such event, such lien for the excess and such invalid lien, as the case 
may be, shall pass to the trustee," 
(e) Paragraph (2) of subdivision d of such section is amended to 
read as follows: 
" (2) Every transfer made and every obligation incurred by a debtor 
within one year prior to the filing of a petition initiating a proceeding 
under this Act by or against him is fraudulent (a) as to creditors 
existing at the time of such transfer or obligation, if made or incurred 
without fair consideration by a debtor who is or will be thereby 
rendered insolvent, without regard to his actual intent; or (b) as to 
then existing creditors and as to other persons who become creditors 
during the continuance of a business or transaction, if made or incurred 
without fair consideration by a debtor who is engaged or is about to 
engage in such business or transaction, for which the property remain-
ing in his hands is an unreasonably small capital, without regard to 
his actual intent; or (c) as to then existing and future creditors, if 
made or incurred without fair consideration by a debtor who intends 
to incur or believes that he will incur debts beyond his ability to pay 
as they mature; or (d) as to then existing and future creditors, if 
made or incurred with actual intent as distinguished from intent pre- • 
sumed in law, to hinder, delay, or defraud either existing or future 
creditors." 
(f) Paragraph (3) of subdivision d of such section is amended to 
read as follows: 
"(3) Every transfer made and every obligation incurred by a 
debtor who is or will thereby be rendered insolvent, within four 
months prior to the filing of a petition initiating a proceeding under 
this Act by or against him is fraudulent, as to then existing and future 
creditors: (a) if made or incurred in contemplation of the filing of a 
petition initiating a proceeding under this Act by or against the 
debtor or in contemplation of liquidation of all or the greater portion 
of the debtor's property, w^th intent to use the consideration obtained 
for such transfer or obligation to enable any creditor of such debtor 
to obtain a greater percentage of his debt than some other creditor of 
the same class, and (b) if the transferee or obligee of such transfer or 
obligation, at the time of such transfer or obligation, knew or believed 
that the debtor intended to make such use of such consideration. The 
remedies of the trustee for the avoidance of such transfer or obligation 
and of any ensuing preference shall be cumulative: Provided, 
however, 
That the trustee shall be entitled to only one satisfaction with respect 
thereto." 
66 
S T A T . ] 
PUBLIC LAW 456-JULY 7, 1952 
429 
(g) Paragraph (4) of subdivision d of such section is amended to 
read as follows: 
'' (4) Every transfer of partnership property and every partnership 
obligation incurred within one year prior to the filing of a petition 
initating a proceeding under this Act by or against the partnership, 
when the partnership is insolvent or will be thereby rendered insolvent, 
is fraudulent as to partnership creditors existing at the time of such 
transfer or obligation, without regard to actual intent if made or 
incurred (a) to a partner, whether with or without a promise by him 
to pay partnership debts, or (b) to a person not a partner without 
fair consideration to the partnership as distinguished from considera-
tion to the individual partners." 
(h) Paragraph (5) of subdivision d of such section is amended to 
read as follows: 
"(5) For the purposes of this subdivision d, a transfer shall be 
deemed to have been made at the time when it became so far perfected 
that no bona fide purchaser from the debtor could thereafter have 
acquired any rights in the property so transferred superior to the 
rights of the transferee therein, but, if such transfer is not so perfected 
prior to the filing of the petition initiating a proceeding under this 
Act, it shall be deemed to have been made immediately before the filing 
of such petition." 
(i) Paragraph (6) of subdivision d of such section is amended to 
read as follows: 
"(6) A transfer made or an obligation incurred by a debtor 
adjudged a bankrupt under this Act, which is fraudulent under this 
subdivision d against creditors of such debtor having claims provable 
under this Act, shall be null and void against the trustee, except as 
to a bona fide purchaser, leinor, or obligee for a present fair equivalent 
value: Provided^ however^ That the court may, on due notice, order 
such transfer or obligation to be preserved for the benefit of the 
estate and, in such event, the trustee shall succeed to and may enforce 
the rights of such transferee or obligee: And provided further^ That 
such purchaser, leinor, or obligee, who without actual fraudulent 
intent has given a consideration less than fair, as defined in this sub-
division d, for such transfer, lien, or obligation, may retain the 
property, lien, or obligation as security for repayment." 
SEC. 22. Subdivision d of section 69 of such Act, as amended, is 
amended to read as follows: 
"d. Upon the filing of a petition under this Act, a receiver or trustee, 
appointed in proceedings not under this Act, of any of the property 
of a bankrupt, an assignee for the benefit of creditors of a bankrupt, or 
an agent authorized to take possession of or to liquidate any of the 
property of a bankrupt shall be accountable to the bankruptcy court, 
in which the proceeding under this Act is pending, for any action 
taken by him subsequent to the filing of such bankruptcy petition, and 
shall file in such bankruptcy court a sworn schedule setting forth a 
summary of the property in his charge and of the liabilities of the 
estate, both as of the time of and since becoming receiver, trustee, as-
signee, or agent, and a sworn statement of his administration of the 
estate. Such receiver, trustee, assignee, or agent, with knowledge of 
the filing of such bankruptcy proceeding, shall not make any disburse-
ments or take any action in the administration of such property with-
out first obtaining authorization therefor from the bankruptcy court." 
SEC. 23. (a) The introductory clauses of subdivision a of section 70 
of such Act, as amended, are amended to read as follows: 
"a. The trustee of the estate of a bankrupt and his successor or suc-
cessors, if any, upon his or their appointment and qualification, shall 
in turn be vested by operation of law with the title of the bankrupt 
P artnership prop-
erty, etc. 
11 u s e 109. 
R e c e i v e r s 
of 
property. 
11 u s e 110. 
Title to property. 
mo 
PUBLIC LAW 456-JULY 7, 1952 
[66 S T A T . 
11 u s e 110. 
Property held at 
time of bankruptcy. 
Title of trustee. 
11 u s e 518. 
11 u s e 624. 
eonfirmation 
plan. 
of 
as of the date of the filing of the petition initiating a proceeding under 
this Act, except insofar as it is to property which is held to be exempt, 
to all of the following kinds of property wherever located (1) 
(b) The second sentence of such subdivision a is amended to be a 
separate unlettered paragraph to read as follows: 
"All property, wherever located, except insofar as it is property 
which is held to be exempt, which vests in the bankrupt within six 
months after bankruptcy by bequest, devise or inheritance shall vest 
in the trustee and his successor or successors, if any, upon his or their 
appointment and qualification, as of the date when it vested in the 
bankrupt, and shall be free and discharged from any transfer made or 
suffered by the bankrupt after bankruptcy." 
(c) The third sentence of such subdivision a is amended to be a 
separate unlettered paragraph to read as follows: 
"All property, wherever located, except insofar as it is property 
which is held to be exempt, in which the bankrupt has at the date of 
bankruptcy an estate or interest by the entirety and which within six 
months after bankruptcy becomes transferable in whole or in part 
solely by the bankrupt shall, to the extent it becomes so transferable, 
vest in the trustee and his successor or successors, if any, upon his or 
their appointment and qualification, as of the date of bankruptcy." 
(d) The fourth sentence of such subdivision a is amended to be a 
separate unlettered paragraph, as follows: 
"The title of the trustee shall not be affected by the prior possession 
of a receiver or other officer of any court." 
(e) Subdivision c of such section is amended to read as follows: 
"c. The trustee may have the benefit of all defenses available to the 
bankrupt as against third persons, including statutes of limitation, 
statutes of frauds, usury, and other personal defenses; and a waiver 
of any such defense by the bankrupt after bankruptcy shall not bind 
the trustee. The trustee, as to all property, whether or not coming 
into possession or control of the court, upon which a creditor of the 
bankrupt could have obtained a lien by legal or equitable proceedings 
at the date of bankruptcy, shall be deemed vested as of such date 
with all the rights, remedies, and powers of a creditor then holding a 
lien thereon by such proceedings, whether or not such a creditor 
actually exists." 
(f) Paragraph (2) of subdivision e of such section is amended to 
read as follows: 
"(2) All property of the debtor affected by any such transfer shall 
be and remain a part of his assets and estate, discharged and released 
from such transfer and shall pass to, and every such transfer or obliga-
tion shall be avoided by, the trustee for the benefit of the estate: Pro-
vided, however, That the court may on due notice order such transfer 
or obligation to be preserved for the benefit of the estate and in such 
Gvent the trustee shall succeed to and may enforce the rights of such 
transferee or obligee. 
The trustee shall reclaim and recover such 
property or collect its value from and avoid such transfer or obligation 
against whoever may hold or have received it, except a person as to 
whom the transfer or obligation specified in paragraph (1) of this 
subdivision e is valid under applicable Federal or State laws." 
(g) Subdivision h of such section is hereby repealed. 
SEC. 24. Section 118 of such Act, as amended, is hereby repealed. 
SEC. 25. Paragraph (4) of section 224 of such Act, as amended, 
is amended to read as follows: 
"(4) distribution shall be made, in accordance with the pro-
visions of the plan, to creditors and stockholders (a) proofs of 
whose claims or stock have been filed prior to the date fixed by 
66 S T A T . ] 
PUBLIC LAW 4 5 6 - J U L Y 7, 1952 
" 
4-31 
the judge and are allowed, or (b) if not so filed, whose claims or 
stock have been listed by the trustee or scheduled by the debtor 
in possession and are not contingent, unliquidated or disputed." 
SEC. 26. Chapter X of such Act, as amended, is amended by inserting 
n use eai-eas. 
at the end of article X I of such chapter the following section: 
"SEC. 229. a. A plan shall be deemed to have been substantially con- pun""^"""^**'' 
summated if, insofar as applicable, each of the following events has 
occurred: 
"(1) transfer, sale or other disposition of all or substantially 
all of the property dealt with by the plan pursuant to the provi-
sions of the plan; 
"(2) assumption of operation of the business and management 
of all or substantially all of the property dealt with by the plan 
by the debtor or by the corporation used for the purpose of carry-
ing out the plan; and 
"(3) commencement of the distribution to creditors and stock-
holders, affected by the plan, of the cash and securities specified 
in the plan as provided for in section 224 of this Act. 
ii use 624. 
"b. Upon notice to the trustee, the debtor, the Securities and 
Exchange Commission and such other persons as the judge may desig-
nate, the trustee, the debtor in possession, the corporation to which 
the assets of the debtor are to be transferred under the plan, or any 
other party in interest may apply to the judge for an order declaring 
the plan to have been substantially consummated under the provisions 
of subdivision a of this section. 
"c. When a plan has been substantially consummated as defined 
in subdivision a of this section, or an order has been entered under 
subdivision b of this section, the plan may not thereafter be altered 
or modified if the proposed alteration or modification materially and 
adversely affects the participation provided for any class of creditors 
or stockholders by the plan. 
SEC. 27. Paragraph (3) of section 238 of such Act, as amended, is 
ii use ess. 
amended to read as follows: 
"(3) only claims for taxes legally due and owing to the United 
AiiowaWeclaims 
States or any State or any subdivision thereof at the time of the 
filing of the original petition under this Act and such claims as 
are provable under section 63 of this Act shall be allowed; and, as 
^^ use io3. 
to any such claims not already duly filed, where the petition was 
filed under section 127 of this Act and an order setting the first n use 527. 
date for the first meeting of creditors was made before the filing 
of such petition, the date of mailing of notice to creditors of the 
entry of the order directing that bankruptcy be proceeded with 
shall, for the purposes of subdivision n of section 57 of this Act, 
^^ use 93. 
be deemed to be the first date set for the first meeting of creditors: 
Provided^ however^ That if the time for filing claims in a pending 
bankruptcy proceeding had expired prior to the filing of a peti-
tion under this chapter, claims not filed within the time prescribed 
or as permitted by subdivision n of section 57 of this Act, shall 
not be allowed in the reinstated bankruptcy proceeding." 
SEC. 28. Clause (11) of subdivision a of section 265 of such Act, 
^^ use ees. 
as amended, is amended to read as follows: 
"(11) the orders directing that bankruptcy be proceeded with, 
Notices to SEC. 
or adjudging the debtors bankrupt and directing that bankruptcy 
be proceeded with, or dismissing proceedings;". 
432 
PUBLIC LAW 456-JULY 7, 1952 
[66 S T A T . 
11 use 724. 
Statements and 
fees accompanying 
petition. 
11 use 721-727. 
Dismissal of pro-
ceedings, etc. 
11 use ch. 10. 
11 use 532. 
11 use 737. 
Arrangement of 
certain payments. 
11 use 738. 
11 use 72. 
11 use 738. 
Creditors' c o ra-
mi 
ttee . 
SEC. 29. Section 324 of such Act, as amended, is amended to read 
as follows: 
"SEC. 324. The petition shall be accompanied by— 
" (1) a statement of the executory contracts of the debtor, and 
the schedules and statement of affairs, if not previously filed: 
Provided^ however^ That if the debtor files with the petition a 
list of his creditors and their addresses and a summary of his 
assets and liabilities, the court may, on application by the debtor, 
grant for cause shown further time, not exceeding ten days, for 
filing the statement of the executory contracts and the schedules 
and statements of affairs, and such time shall not further be ex-
tended except for cause shown and on such notice and to such 
persons as the court may direct; and 
"(2) payment to the clerk of the fees, if not already paid, 
required by this Act." 
SEC. 30. Chapter X I of such Act, as amended, is amended by insert-
ing at the end of article IV of such chapter the following section 328: 
"SEC. 328. The judge may, upon application of the Securities and 
Exchange Commission or any party in interest, and upon such notice 
to the debtor, to the Securities and Exchange Commission, and to such 
other persons as the judge may direct, if he finds that the proceedings 
should have been brought under chapter X of this Act, enter an order 
dismissing the proceedings under this chapter, unless, within such time 
as the judge shall fix, the petition be amended to comply with the 
requirement of chapter X for the filing of a debtor's petition or a 
creditors' petition under such chapter, be filed. Upon the filing of 
such amended petition, or of such creditors' petition, and the payment 
of such additional fees as may be required to comply with section 
132 of this Act, such amended petition or creditors' petition shall there-
after, for all purposes of chapter X of this Act, be deemed to have 
been originally filed under such chapter." 
SEC. 31. Paragraph (2) of section 337 of such Act, as amenaed, is 
amended to read as follows: 
"(2) fix a time within which the debtor shall deposit, in such 
place as shall be designated by and subject to the order of the 
court, the consideration, if any, to be distributed to the creditors, 
the money necessary to pay all debts which have priority, unless 
such priority creditors shall have waived their claims or such 
deposit, or consented in writing to any provision of the arrange-
ment for otherwise dealing with such claims, and the money 
necessary to pay the costs and expenses of the proceedings, and 
the actual and necessary expenses, in such amount as the court may 
allow, incurred after its appointment by a committee appointed 
pursuant to section 388 of this Act, or incurred before or after the 
filing of the petition under this chapter by a committee designated 
in writings filed with the court and signed and acknowledged by a 
majority in amount of unsecured creditors whose claims have been 
scheduled otherwise than as contingent, unliquidated or disputed 
and who would not be disqualified by section 44 of this Act to 
participate in the appointment of a trustee: Provided^ however^ 
That in fixing any such allowances the court shall give considera-
tion only to the services which contributed to the arrangement 
confirmed or to the refusal of confirmation of an arrangement, 
or which were beneficial in the administration of the estate, and 
the proper costs and expenses incidental thereto; and". 
SEC. 32. Section 338 of such Act, as amended, is amended to read 
as follows: 
"SEC. 338. At such meeting the creditors may appoint a com-
mittee, if none has previously been designated or appointed under 
66 
S T A T . ] 
PUBLIC LAW 456-JULY 7, 1952 
433 
this Act, and, if a trustee has not previously been appointed, may 
nominate a trustee who shall thereafter be appointed by the court in 
case it shall become necessary to administer the estate in bankruptcy 
as provided under this chapter." 
SEC. 33. Section 354 of such Act, as amended, is hereby repealed. 
SEC. 34. Section 355 of such Act, as amended, is hereby renumbered 
section 354 and amended to read as follows: 
"SEC. 354. Upon the entry of an order under the provisions of this 
chapter directing that bankruptcy be proceeded with, only claims for 
taxes legally due and owing to the United States or any State or any 
subdivision thereof at the time of the filing of the original petition 
under this Act and such claims as are provable under section 63 of 
this Act shall be allowed; and, as to any such claims not already 
duly filed, where the petition was filed under section 321 of this Act 
and an order setting the first date for the first meeting of creditors 
was made before the filing of such petition, the date of mailing of 
notice to creditors of the entry of the order directing that bankruptcy 
be proceeded with shall, for the purposes of subdivision n of section 
57 of this Act, be deemed to be the first date set for the first meeting 
of creditors: Provided^ however^ That if the time for filing claims in 
a pending bankruptcy proceeding had expired prior to the filing of a 
petition under this chapter, claims not filed within the time prescribed 
or as permitted by subdivision n of section 57 of this Act shall not be 
allowed in the reinstated bankruptcy proceeding." 
SEC. 35. Section 366 of such Act, as amended, is amended to read as 
follows: 
"SEC. 366. The court shall confirm an arrangement if satisfied 
that— 
"(1) the provisions of this chapter have been complied with; 
"(2) it is for the best interests of the creditors and is feasible; 
" (3) the debtor has not been guilty of any of the acts or failed 
to perform any of the duties which would be a bar to the discharge 
of a bankrupt; and 
" (4) the proposal and its acceptance are in good faith and have 
not been made or procured by any means, promises, or acts for-
bidden by this Act. 
"Confirmation of an arrangement shall not be refused solely because 
the interest of a debtor, or if the debtor is a corporation, the interests 
of its stockholders or members will be preserved under 
the 
arrangement." 
SEC. 36. Paragraph (3) of section 367 of such Act, as amended, is 
amended to read as follows: 
"(3) the consideration deposited, if any, shall be distributed 
and the rights provided by the arrangement shall inure to the 
creditors affected by the arrangement whose claims (a) have been 
filed prior to the date of confirmation and are allowed or (b) 
whether or not filed have been scheduled by the debtor and are 
not contingent, unliquidated, or disputed; and". 
SEC. 37. The first unnumbered paragraph of section 369 of such Act, 
as amended, is amended to read as follows: 
"The court shall in any event retain jurisdiction until the final allow-
ance or disallowance of all debts affected by the arrangement which—". 
SEC. 38. Section 371 of such Act, as amended, is amerfded to read 
as follows: 
"SEC. 371. The confirmation of an arrangement shall discharge a 
debtor from all his unsecured debts and liabilities provided for by 
the arrangement, except as provided in the arrangement or the order 
confirming the arrangement, but excluding such debts as, under sec-
tion 17 of this Act, are not dischargeable." 
11 use 754. 
11 use 755. 
A l l o w a b l e 
claims. 
11 use 103. 
11 use 721. 
11 use 93. 
11 use 766. 
R e qu i s ites for 
confirmation. 
11 use 767. 
D i s t r ibution of 
deposit. 
11 use 769. 
11 use 771. 
Unsecured debts. 
11 use 35. 
434 
PUBLIC LAW 456-JULY 7, 1952 
[66 S T A T , 
11 use 776. 
11 use 724. 
11 use ch. 11. 
eonfirmation 
arrangement. 
11 use chs. 1-7. 
11 use 824. 
Statement and 
fees to accompany 
petition. 
11 use 859. 
A l l o w a b l 
claims. 
SEC. 39. The introductory clauses of section 376 of such Act, as 
amended, are amended to read as follows: 
"SEC. 376. If the statement of the executory contracts and the 
schedules and statement of affairs, as provided by paragraph (1) of 
section 324 of this Act, are not duly filed, or if an arrangement is 
withdrawn or abandoned prior to its acceptance, or is not accepted 
at the meeting of creditors or within such further time as the court 
may fix, or if the money or other consideration required to be deposited 
is not deposited or the application for confirmation is not filed within 
the time fixed by the court, or if confirmation of the arrangement is 
refused, the court shall—". 
SEC. 40. Chapter X I of such Act, as amended, is amended by insert-
ing in its numerical order the following section: 
"SEC. 381. Where, after the confirmation of an arrangement, the 
court shall enter an order directing that bankruptcy be proceeded 
with— 
" (1) the trustee shall, upon his appointment and qualification, 
be vested with the title to all the property of the debtor as of the 
date of the entry of the order directing that bankruptcy be 
proceeded with ; 
"(2) the unsecured debts incurred by the debtor after the con-
firmation of the arrangement and before the date of the entry of 
the final order directing that bankruptcy be proceeded with shall, 
unless and except as otherwise provided in the arrangement or in 
the order confirming the arrangement, share on a parity with the 
prior unsecured debts of the sanie classes, provable in the ensuing 
bankruptcy proceeding, and for such purpose the prior unsecured 
debts shall be deemed to be reduced to the amounts respectively 
provided for them in the arrangement or in the order confirming 
the arrangement, less any payment made thereunder; and 
"(3) the provisions of chapters I to VII, inclusive, of this Act, 
shall, insofar as they are not inconsistent or in conflict with the 
provisions of this section, apply to the rights, duties, and liabilities 
of the creditors holding debts incurred by the debtor after the 
confirmation of the arrangement and before the date of the final 
order directing that bankruptcy be proceeded with, and of all 
persons with respect to the property of the debtor, and, for the 
purposes of such application, the date of bankruptcy shall be 
taken to be the date of the entry of the order directing that bank-
ruptcy be proceeded with." 
SEC. 41. Section 424 of such Act, as amended, is amended to read as 
follows: 
"SEC. 424. The petition shall be accompanied by— 
"(1) a statement of the executory contracts of the debtor, and 
the schedules and statement of affairs, if not previously filed: 
Provided.^ hoicever^ That if the debtor files with the petition a list 
of his creditors and their addresses and a summary of his assets 
and liabilities, the court may, on application by the debtor, grant 
for cause shown further time, not exceeding ten days, for filing the 
statement of the executory contracts and the schedules and state-
ments of affairs, and such time shall not further be extended except 
for cause shown and on such notice and to such persons as the court 
may direct; and 
"(2) payment to the clerk of the fees, if not already paid, 
required by this Act." 
SEC. 42. Section 459 of such Act, as amended, is amended to read as 
follows: 
"SEC. 459. Upon the entry of an order under the provisions of this 
chapter directing that bankruptcy be proceeded with, only claims for 
66 
S T A T . ] 
PUBLIC LAW 456-JULY 7, 1952 
435 
taxes legally due and owing to the United States or any State or any 
subdivision thereof at the time of the filing of the original petition 
under this Act and such claims as are provable under section 63 of this 
Act shall be allowed, and claims not already filed may be filed in ac-
cordance with the provisions of subdivision n of section 57 of this 
Act." 
SEC. 43. Section 472 of such Act, as amended, is amended to read 
as follows: 
"SEC. 472. The court shall confirm an arrangement if satisfied that— 
" (1) the provisions of this chapter have been complied with; 
"(2) it is for the best interests of creditors and is feasible; 
"(3) the debtor has not been guilty of any of the acts or failed 
to perform any of the duties which would be a bar to the discharge 
of a bankrupt; 
" (4) the proposal and its acceptance are in good faith and have 
not been made or procured by any means, promises, or acts for-
bidden by this Act; and 
" (5) all payments made or promised by the debtor, by any per-
son issuing securities or acquiring property under the arrange-
ment or by any other person, for services and for costs and expenses 
in, or in connection with, the proceeding or in connection with 
and incident to the arrangement, have been fully disclosed to the 
court and are reasonable, or, if to be fixed after confirmation of the 
arrangement, will be subject to the approval of the court. 
"Confirmation of an arrangement shall not be refused solely because 
the interest of a debtor will be preserved under the arrangement." 
SEC. 44. Paragraph (3) of section 473 of such Act, as amended, is 
amended to read as follows: 
"(3) distribution shall be made, in accordance with the pro-
visions of the arrangement, to the creditors, proofs of whose 
claims have been filed prior to the date fixed by the court and are 
allowed, or, if not so filed, whose claims have been scheduled by 
the debtor and are not contingent, unliquidated, or disputed: Pro-
vided^ however, That where such debts are objected to by any 
party in interest, the objections shall be heard and summarily 
determined by the court." 
SEC. 45. The introductory clauses of section 481 of such Act, as 
amended, are amended to read as follows: 
"SEC. 481. If the statement of the executory contracts and the sched-
ules and statement of affairs, as provided by paragraph (1) of section 
424 of this Act, are not duly filed, or if an arrangement is withdrawn 
or abandoned prior to its acceptance and no other arrangement is 
pending, or if no arrangement is accepted at the meeting of creditors 
or within such further time as the court may fix, or if the money or 
other consideration required to be deposited is not deposited or the 
application for confirmation is not filed within the time fixed by the 
court, or if confirmation of the arrangement is refused, the court 
shall—". 
SEC. 46. Chapter X I I of such Act, as amended, is amended by insert-
ing in its numerical order the following section: 
"SEC. 486. Where, after the confirmation of an arrangement, the 
court shall enter an order directing that bankruptcy be proceeded 
with— 
"(1) the trustee shall, upon his appointment and qualification, 
be vested with the title to all the property of the debtor as of the 
date of the entry of the order directing that bankruptcy be pro-
ceeded with; 
"(2) the unsecured debts incurred by the debtor after the con-
firmation of the arrangement and before the date of the entry of 
11 use 103. 
11 use 93. 
11 use 872. 
eonfirmation o f 
arrangement. 
11 u s e 873. 
Distribution to 
creditors. 
11 use 881. 
Withdrawal of 
arrangement, etc. 
11 u s e 824. 
11 u s e ch. 12. 
eonf irmation of 
arrangement. 
93300 O - 53 - 31 
436 
PUBLIC LAW 456-JULY 7, 1952 
[66 S T A T . 
11 use chs. 1-7-
11 u s e 1024. 
Statements and 
f e e s accompany-
ing petition. 
11 use 1022. 
11 u s e 68, 80. 
11 use 
11 use 
A l i o 
claims. 
11 use 
11 use 
1043. 
1044. 
w a b 1 
103. 
1021. 
11 use 93. 
:.!! the final order directing that bankruptcy be proceeded with shall, 
unless and except as otherwise provided in the arrangement or 
in the order confirming the arrangement, share on a parity with 
the prior unsecured debts of the same classes, provable in the 
ensuing bankruptcy proceeding, and for such purpose the prior 
unsecured debts shall be deemed to be reduced to the amounts 
i H respectively provided for them in the arrangement or in the order 
confirming the arrangement, less any payment made thereunder; 
and 
"(3) the provisions of chapters I to VII, inclusive, of this Act 
shall, insofar as they are not inconsistent or in conflict with the 
j ' 
provisions of this section, apply to the rights, duties, and liabilities 
of the creditors holding debts incurred by the debtor after the con-
firmation of the arrangement and before the date of the final 
- 
order directing that bankruptcy be proceeded with, and of all 
persons with respect to the property of the debtor, and, for the 
purposes of such application, the date of bankruptcy shall be 
taken to be the date of entry of the order directing that bank-
ruptcy be proceeded with." 
SEC. 47. Section 624 of such Act, as amended, is amended to read 
as follows: 
"SEC. 624. The petition shall be accompanied— 
"(1) by a statement of the executory contracts of the debtor, 
and the schedules and statement of affairs, if not previously filed: 
»;; Provided^ however^ That if the debtor files with the petition a list 
of his creditors and their addresses and a summary of his assets 
-r 
and liabilities, the court may, on application by the debtor, grant 
for cause shown further time, not exceeding ten days, for filing 
'the statement of the executory contracts and the schedules and 
statement of affairs, and such time shall not further be extended 
except for cause shown and on such notice and to such persons 
as the court may direct; and 
"(2) where a petition is filed under section 622 of this Act, 
by payment to the clerk of $15 to be distributed, $10 to the 
Treasury of the United States for deposit in the referees' salary 
fund and $5 to the clerk, in lieu of the fees of $17 and $8 as pre-
scribed in sections 40 and 52 of this Act: Provided^ however^ That 
such fees may be paid in installments, if so authorized by general 
order of the Supreme Court of the United States." 
SEC. 48. Section 643 of such Act, as amended, is hereby repealed. 
SEC. 49. Section 644 of such Act, as amended, is hereby renumbered 
section 643 and amended to read as follows: 
"SEC. 643. Upon the entry of an order under the provisions of this 
chapter directing that bankruptcy be proceeded with, only claims for 
taxes legally due and owing to the United States or any State or 
any subdivision thereof at the time of the filing of the original petition 
under this Act and such claims as are provable under section 63 of this 
Act shall be allowed; and, as to any such claims not already duly filed, 
where the petition under this chapter was filed under section 621 of this 
Act, and an order setting the first date for the first meeting of creditors 
was made before the filing of such petition, the date of mailing of 
notice to creditors of the entry of the order directing that bankrutpcy 
be proceeded with shall, for the purposes of subdivision n of section 
57 of this Act, be deemed to be the first date set for the first meeting 
of creditors: Provided^ however^ That if the time for filing claims in a 
pending bankruptcy proceeding had expired prior to the filing of a 
petition under this chapter, claims not filed within the time prescribed 
or as permitted by subdivision n of section 57 of this Act shall not be 
allowed in the reinstated bankruptcy proceeding." 
66 
S T A T . ] 
PUBLIC LAW 4 56-JULY 7, 1952 
m 
SEC. 50. Subdivision a of section 656 of such Act, as amended, is 
n use lose. 
amended to read as follows: 
"a. The Court shall confirm a plan if satisfied that— 
"(1) the provisions of this chapter have been complied with; 
"(2) it is for the best interests of the creditors and is feasible; 
" (3) the debtor has not been guilty of any of the acts or failed 
to perform any of the duties which would be a bar to the discharge 
of the bankrupt; and 
"(4) the proposal and its acceptance are in good faith and 
have not been made or procured by any means, promises, or acts 
forbidden by this Act. 
"Confirmation of a plan shall not be refused solely because the inter-
est of a debtor will be preserved under the plan." 
SEC. 51. Section 660 of such Act, as amended, is amended to read 
as follows: 
"SEC. 660. Upon compliance by the debtor with the provisions of 
the plan and upon completion of all payments to be made thereunder, 
the court shall enter an order discharging the debtor from all his 
debts and liabilities provided for by the plan, but excluding such 
debts as are not dischargeable under section 17 of this Act held by 
creditors who have not accepted the plan." 
SEC. 52. Section 661 of such Act, as amended, is amended to read 
as follows: 
"SEC. 661. If at the expiration of three years after the confirmation 
of a plan the debtor has not completed his payments thereunder, the 
court may nevertheless, upon the application of the debtor and after 
hearing upon notice, if satisfied that the failure of the debtor to com-
plete his payments was due to circumstances for which he could not be 
justly held accountable, enter an order discharging the debtor from 
all his debts and liabilities provided for by the plan, but excluding 
such debts as are not dischargeable under section 17 of this Act held 
by creditors who have not accepted the plan." 
SEC. 53. The introductory clauses of section 666 of such Act, as 
amended, are amended to read as follows: 
"SEC. 666. If the statement of the executory contracts and the 
schedules and statement of affairs, as provided by paragraph (1) of 
section 624 of this Act, are not duly filed, or if a plan is not proposed 
at the meeting of creditors or within such further time as the court 
may fix, or if the plan is withdrawn or abandoned prior to its accept-
ance, or if the plan is not accepted at the meeting of creditors or 
within such further time as the court may fix, or if the deposit required 
under this chapter and under the plan is not made or the application 
for confirmation is not filed within the time fixed by the court, or if 
confirmation of the plan is refused, or if after confirmation, a debtor 
defaults in any of the terms of the plan, or if the plan terminates by 
reason of the happening of a condition specified in the plan, the 
court shall—." 
SEC. 54. Chapter X I I I of such Act, as amended, is amended by 
inserting in its numerical order the following section: 
"SEC. 669. Where, after the confirmation of a plan, the court shall 
enter an order directing that bankruptcy be proceeded with— 
" (1) the trustee shall, upon his appointment and qualification, 
be vested with the title to all the property of the debtor as of the 
date of the entry of the order directing that bankrupcy be pro-
ceeded with; 
"(2) the unsecured debts incurred by the debtor after the con-
firmation of the plan and before the date of the entry of the 
final order directing that bankruptcy be proceeded with shall, 
unless and except as otherwise provided in the plan or in the 
Confirmation o f 
plan. 
11 use 1060. 
D i s c h a r g e of 
debtor. 
11 use 35. 
11 use 1061. 
11 u s e 35. 
11 use 1066. 
Abandonment of 
plan, etc. 
11 u s e 1024. 
llUSech. 13. 
eonf irmation o f 
plan. 
438 
PUBLIC LAW 457-JULY 7, 1952 
[66 S T A T . 
11 u s e chs. 1-7. 
Separability. 
30 Stat 
11 
prec use 
1. 
544. 
Effective 
date. 
order confirming the plan, share on a parity with the prior un-
secured debts of the same classes, provable in the ensuing bank-
ruptcy proceeding, and for such purpose the prior unsecured 
debts shall be deemed to be reduced to the amounts respectively 
provided for them in the plan or in the order confirming the plan, 
less any payment made thereunder; and 
"(3) the provisions of chapters I to VII, inclusive, of this Act 
shall, insofar as they are not inconsistent or in conflict with the 
provisions of this section, apply to the rights, duties, and liabil-
ities of the creditors holding debts incurred by the debtor after 
the confirmation of the plan and before the date of the final order 
directing that bankruptcy be proceeded with, and of all persons 
with respect to the property of the debtor, and, for the purposes 
of such application, the date of bankruptcy shall be taken to be 
the date of the entry of the order directing that bankruptcy be 
proceeded with." 
SEC. 55. (a) All Acts or parts of Acts inconsistent with any provi-
sions of this amendatory Act are hereby repealed. 
(b) If any provision of this amendatory Act or the application 
thereof to any person or circumstances is held invalid, such invalidity 
shall not affect other provisions or applications of this amendatory 
Act which can be given effect without the invalid provision or appli-
cation, and to this end the provisions of this amendatory Act are 
declared to be severable. 
SEC. 56. EFFECT OF THIS AMENDATORY ACT.^—(a) Nothing herein con-
tained shall have the effect to release or extinguish any penalty, for-
feiture, or liability incurred under any Act or Acts of which this Act 
is amendatory. 
(b) The provisions of this amendatory Act shall govern proceedings 
so far as practicable and applicable in cases pending when it takes 
effect; but proceedings in cases then pending to which the provisions 
of this amendatory Act are not applicable shall be disposed of con-
formably to the provisions of said Act approved July 1,1898, and the 
Acts amendatory thereof and supplementary thereto. 
SEC. 57. This amendatory Act shall take effect and be in force on and 
after three months from the date of its approval. 
Approved July 7, 1952. 
July 7, 1952 
[S. 2240] 
Public Law 457 
CHAPTER 580 
AN ACT 
To amend section 40 of the Bankruptcy Act, so as to increase and fix the salary 
of full-time referees and to authorize increased salaries for part-time referees. 
Bankruptcy Act, 
amendment. 
80 Stat. 556. 
11 u s e 68. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress a^sembled^ That section 40a of 
the Act entitled "An Act to establish a uniform system of bankruptcy 
throughout the United States", approved July 1, 1898, as amended, is 
amended to read as follows : 
"SEC. 40. COMPENSATION OF REFEREE'S SALARY AND EXPENSE FUNDS ; 
RETIREMENT OF REFEREES, a. Referees shall receive as full compensa-
tion for their services salaries to be fixed by the conference, in the light 
of the recommendations of the councils, made after advising with the 
district judges of their respective circuits, and of the Director, at 
rates not more than $12,500 per annum for full-time referees, and not 
more than $6,000 per annum for part-time referees. 
In fixing the 
amount of salary to be paid to a referee, consideration shall be given