CITE

    15 USC Sec. 78fff                                           01/08/2008

EXPCITE

    TITLE 15 - COMMERCE AND TRADE
    CHAPTER 2B091 - SECURITIES INVESTOR PROTECTION

HEAD

    Sec. 78fff. General provisions of a liquidation proceeding

STATUTE

    (a) Purposes
      The purposes of a liquidation proceeding under this chapter shall
    be -
        (1) as promptly as possible after the appointment of a trustee
      in such liquidation proceeding, and in accordance with the
      provisions of this chapter -
          (A) to deliver customer name securities to or on behalf of
        the customers of the debtor entitled thereto as provided in
        section 78fff-2(c)(2) of this title; and
          (B) to distribute customer property and (in advance thereof
        or concurrently therewith) otherwise satisfy net equity claims
        of customers to the extent provided in this section;
        (2) to sell or transfer offices and other productive units of
      the business of the debtor;
        (3) to enforce rights of subrogation as provided in this
      chapter; and
        (4) to liquidate the business of the debtor.
    (b) Application of title 11
      To the extent consistent with the provisions of this chapter, a
    liquidation proceeding shall be conducted in accordance with, and
    as though it were being conducted under chapters 1, 3, and 5 and
    subchapters I and II of chapter 7 of title 11. For the purposes of
    applying such title in carrying out this section, a reference in
    such title to the date of the filing of the petition shall be
    deemed to be a reference to the filing date under this chapter.
    (c) Determination of customer status
      In a liquidation proceeding under this chapter, whenever a person
    has acted with respect to cash or securities with the debtor after
    the filing date and in a manner which would have given him the
    status of a customer with respect to such cash or securities had
    the action occurred prior to the filing date, and the trustee is
    satisfied that such action was taken by the customer in good faith
    and prior to the appointment of the trustee, the date on which such
    action was taken shall be deemed to be the filing date for purposes
    of determining the net equity of such customer with respect to such
    cash or securities.
    (d) Apportionment
      In a liquidation proceeding under this chapter, any cash or
    securities remaining after the liquidation of a lien or pledge made
    by a debtor shall be apportioned between his general estate and
    customer property in the proportion in which the general property
    of the debtor and the cash and securities of the customers of such
    debtor contributed to such lien or pledge. Securities apportioned
    to the general estate under this subsection shall be subject to the
    provisions of section 78lll(5)(A) of this title.
    (e) Costs and expenses of administration
      All costs and expenses of administration of the estate of the
    debtor and of the liquidation proceeding shall be borne by the
    general estate of the debtor to the extent it is sufficient
    therefor, and the priorities of distribution from the general
    estate shall be as provided in section 726 of title 11. Costs and
    expenses of administration shall include payments pursuant to
    section 78fff-2(e) of this title and section 78fff-3(c)(1) of this
    title (to the extent such payments recovered securities which were
    apportioned to the general estate pursuant to subsection (d) of
    this section) and costs and expenses of SIPC employees utilized by
    the trustee pursuant to section 78fff-1(a)(2) of this title. All
    funds advanced by SIPC to a trustee for such costs and expenses of
    administration shall be recouped from the general estate under
    section 507(a)(2) of title 11.

SOURCE

    (Pub. L. 91-598, Sec. 6, Dec. 30, 1970, 84 Stat. 1646; Pub. L. 95-
    283, Sec. 8, May 21, 1978, 92 Stat. 259; Pub. L. 95-598, title
    III, Sec. 308(g), (h), Nov. 6, 1978, 92 Stat. 2675; Pub. L. 109-8,
    title XV, Sec. 1502(b), Apr. 20, 2005, 119 Stat. 217.)

REFERENCES IN TEXT

      This chapter, referred to in subsecs. (a)(1), (3), (b), (c), and
    (d), was in the original "this Act", meaning Pub. L. 91-598, Dec.
    30, 1970, 84 Stat. 1636. For complete classification of this Act to
    the Code, see Tables.

AMENDMENTS

      2005 - Subsec. (e). Pub. L. 109-8 substituted "507(a)(2)" for
    "507(a)(1)".
      1978 - Pub. L. 95-283 substituted "General provisions of a
    liquidation proceeding" for "Liquidation proceedings" in section
    catchline.
      Subsec. (a). Pub. L. 95-283 in heading substituted "Purposes" for
    "General purposes of liquidation proceeding", in introductory text
    substituted provisions relating to purposes of liquidation
    proceedings under this chapter, for provisions relating to purposes
    of any proceeding in which a trustee has been appointed under
    section 78eee(b)(3) of this title, in par. (1) substituted
    provisions requiring execution of authorities to deliver customer
    name securities and distribute customer property in accordance with
    this chapter, for provisions requiring execution of authorities to
    return specifically identifiable property and distribute the single
    and separate fund in accordance with this section, and in par. (2)
    substituted provisions authorizing sale, etc., of productive units
    of the debtor, for provisions authorizing operation of the business
    of the debtor.
      Subsec. (b). Pub. L. 95-598, Sec. 308(g), in heading substituted
    "title 11" for "Bankruptcy Act" and in text "under chapters 1, 3,
    and 5 and subchapters I and II of chapter 7 of title 11. For the
    purposes of applying such title in carrying out this section, a
    reference in such title to the date of the filing of the petition
    shall be deemed to be a reference to the filing date under this
    chapter." for "under, the Bankruptcy Act. For purposes of applying
    the Bankruptcy Act to this chapter, any reference in the Bankruptcy
    Act to the date of commencement of proceedings under the Bankruptcy
    Act shall be deemed to be a reference to the filing date under this
    chapter."
      Pub. L. 95-283 in heading substituted "Application of Bankruptcy
    Act" for "Powers and Duties of Trustee", and in text substituted
    provisions relating to applicability of Bankruptcy Act to
    liquidation proceedings, for provisions relating to the powers and
    duties of trustees. See section 78fff-1 of this title.
      Subsec. (c). Pub. L. 95-283 in heading substituted "Determination
    of customer status" for "Application of Bankruptcy Act", and in
    text substituted provisions relating to determination of status of
    a customer with respect to cash or securities, for provisions
    setting forth general and special provisions of the Bankruptcy Act
    applicable to liquidation proceedings, and defining terms for
    purposes of such applicability and the provisions of this section.
    See subsec. (b) of this section and section 78fff-2(c) of this
    title.
      Subsec. (d). Pub. L. 95-283 in heading substituted
    "Apportionment" for "Completion of open contractual commitments",
    and in text substituted provisions relating to apportionment of
    cash or securities remaining after the liquidation of a lien or
    pledge made by a debtor, for provisions relating to completion by
    the trustee of open contractual commitments, which were made in the
    ordinary course of the debtor's business and which were outstanding
    on the filing date. See section 78fff-2(e) of this title.
      Subsec. (e). Pub. L. 95-598, Sec. 308(h), substituted in first
    sentence "section 726 of title 11" for "the Bankruptcy Act" and in
    last sentence "under section 507(a)(1) of title 11" for "as a first
    priority under the Bankruptcy Act".
      Pub. L. 95-283 in heading substituted "Costs and expense of
    administration" for "Notice", and in text substituted provisions
    relating to costs and expenses of administration of the estate of
    the debtor and of the liquidation proceeding, for provisions
    relating to notice requirements for the trustee subsequent to
    appointment as trustee. See section 78fff-2(a)(l) of this title.
      Subsec. (f). Pub. L. 95-283 struck out subsec. (f) requiring
    advances by the SIPC to the trustee for customers' claims and
    completion of open contractual commitments, and authorizing
    discretionary advances to the trustee for compensation of personnel
    deemed necessary for the liquidation proceeding. See section 78fff-
    3 of this title.
      Subsec. (g). Pub. L. 95-283 struck out subsec. (g) setting forth
    provisions relating to payments to customers by the trustee, and
    provisions respecting the quantum of proof of claim required for
    such payment. See section 78fff-2(a)(2) and (b) of this title.
      Subsec. (h). Pub. L. 95-283 struck out subsec. (h) relating to
    nonapplicability of provisions to proof of claim by associates and
    others connected in some way with the debtor. See section 78fff-
    2(a)(2) of this title.
      Subsec. (i). Pub. L. 95-283 struck out subsec. (i) setting forth
    provisions relating to reports by the trustee to the court. See
    section 78fff-1(c) of this title.
      Subsec. (j). Pub. L. 95-283 struck out subsec. (j) which related
    to nonapplicability of provisions to rights of persons to establish
    by formal proof such claims as they may have to payment or delivery
    of specific securities. See section 78fff-2(a)(4) of this title.
                     EFFECTIVE DATE OF 2005 AMENDMENT
      Amendment by Pub. L. 109-8 effective 180 days after Apr. 20,
    2005, and not applicable with respect to cases commenced under
    Title 11, Bankruptcy, before such effective date, except as
    otherwise provided, see section 1501 of Pub. L. 109-8, set out as a
    note under section 101 of Title 11.
                     EFFECTIVE DATE OF 1978 AMENDMENT
      Amendment by Pub. L. 95-598 effective Oct. 1, 1979, see section
    402(a) of Pub. L. 95-598, set out as an Effective Date note
    preceding section 101 of Title 11, Bankruptcy.