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11 U.S.C. § 510 — Subordination
Federal law — U.S. Code and appendices · legal_authorities
**(a)** A subordination agreement is enforceable in a case under this title to the same extent that such agreement is enforceable under applicable nonbankruptcy law.
**(b)** For the purpose of distribution under this title, a claim arising from rescission of a purchase or sale of a security of the debtor or of an affiliate of the debtor, for damages arising from the purchase or sale of such a security, or for reimbursement or contribution allowed under section 502 on account of such a claim, shall be subordinated to all claims or interests that are senior to or equal the claim or interest represented by such security, except that if such security is common stock, such claim has the same priority as common stock.
**(c)** Notwithstanding subsections (a) and (b) of this section, after notice and a hearing, the court may—
(1) under principles of equitable subordination, subordinate for purposes of distribution all or part of an allowed claim to all or part of another allowed claim or all or part of an allowed interest to all or part of another allowed interest; or
(2) order that any lien securing such a subordinated claim be transferred to the estate.
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Stable record: federal_law:legal_authorities:record_usc_3366f7a51d54ab062cfbcc92
Source file: Laws/federal/codes/united-states-code/title-11/section-510-subordination--6a0364d52d.md
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Source location: Title 11, Chapter 5, § 510; chapter-005-creditors-the-debtor-and-the-estate.md
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**(a)** A subordination agreement is enforceable in a case under this title to the same extent that such agreement is enforceable under applicable nonbankruptcy law.
**(b)** For the purpose of distribution under this title, a claim arising from rescission of a purchase or sale of a security of the debtor or of an affiliate of the debtor, for damages arising from the purchase or sale of such a security, or for reimbursement or contribution allowed under section 502 on account of such a claim, shall be subordinated to all claims or interests that are senior to or equal the claim or interest represented by such security, except that if such security is common stock, such claim has the same priority as common stock.
**(c)** Notwithstanding subsections (a) and (b) of this section, after notice and a hearing, the court may—
(1) under principles of equitable subordination, subordinate for purposes of distribution all or part of an allowed claim to all or part of another allowed claim or all or part of an allowed interest to all or part of another allowed interest; or
(2) order that any lien securing such a subordinated claim be transferred to the estate.
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Federal law — U.S. Code and appendices · legal_authorities
**(a)** The holder of a claim or interest allowed under [section 502 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section502&num=0&edition=prelim) may accept or reject a plan. If the United States is a creditor or equity security holder, the Secretary of the Treasury may accept or reject the plan on behalf of the United States.
**(b)** For the purposes of subsections (c) and (d) of this section, a holder of a claim or interest that has accepted or rejected the plan before the commencement of the case under this title is deemed to have accepted or rejected such plan, as the case may be, if—
(1) the solicitation of such acceptance or rejection was in compliance with any applicable nonbankruptcy law, rule, or regulation governing the adequacy of disclosure in connection with such solicitation; or
(2) if there is not any such law, rule, or regulation, such acceptance or rejection was solicited after disclosure to such holder of adequate information, as defined in [section 1125(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section1125/a&num=0&edition=prelim).
**(c)** A class of claims has accepted a plan if such plan has been accepted by creditors, other than any entity designated under subsection (e) of this section, that hold at least two-thirds in amount and more than one-half in number of the allowed claims of such class held by creditors, other than any entity designated under subsection (e) of this section, that have accepted or rejected such plan.
**(d)** A class of interests has accepted a plan if such plan has been accepted by holders of such interests, other than any entity designated under subsection (e) of this section, that hold at least two-thirds in amount of the allowed inter
Source: Supplied U.S. Code snapshot — release unconfirmed · 11 U.S.C. § 1126
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Federal law — U.S. Code and appendices · legal_authorities
In this title the following definitions shall apply:
(1) The term “accountant” means accountant authorized under applicable law to practice public accounting, and includes professional accounting association, corporation, or partnership, if so authorized.
(2) The term “affiliate” means—
(A) entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than an entity that holds such securities—
(i) in a fiduciary or agency capacity without sole discretionary power to vote such securities; or
(ii) solely to secure a debt, if such entity has not in fact exercised such power to vote;
(B) corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by the debtor, or by an entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than an entity that holds such securities—
(i) in a fiduciary or agency capacity without sole discretionary power to vote such securities; or
(ii) solely to secure a debt, if such entity has not in fact exercised such power to vote;
(C) person whose business is operated under a lease or operating agreement by a debtor, or person substantially all of whose property is operated under an operating agreement with the debtor; or
(D) entity that operates the business or substantially all of the property of the debtor under a lease or operating agreement.
(3) The term “assisted person” means any person whose debts consist primarily of consumer debts and the value of whose nonexempt property is less than $150,000.11 See Adjustment of Dollar Amounts not
Source: Supplied U.S. Code snapshot — release unconfirmed · 11 U.S.C. § 101
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Federal law — U.S. Code and appendices · legal_authorities
**(a)** The court shall confirm a plan only if all of the following requirements are met:
(1) The plan complies with the applicable provisions of this title.
(2) The proponent of the plan complies with the applicable provisions of this title.
(3) The plan has been proposed in good faith and not by any means forbidden by law.
(4) Any payment made or to be made by the proponent, by the debtor, or by a person issuing securities or acquiring property under the plan, for services or for costs and expenses in or in connection with the case, or in connection with the plan and incident to the case, has been approved by, or is subject to the approval of, the court as reasonable.
(5)
(A)
(i) The proponent of the plan has disclosed the identity and affiliations of any individual proposed to serve, after confirmation of the plan, as a director, officer, or voting trustee of the debtor, an affiliate of the debtor participating in a joint plan with the debtor, or a successor to the debtor under the plan; and
(ii) the appointment to, or continuance in, such office of such individual, is consistent with the interests of creditors and equity security holders and with public policy; and
(B) the proponent of the plan has disclosed the identity of any insider that will be employed or retained by the reorganized debtor, and the nature of any compensation for such insider.
(6) Any governmental regulatory commission with jurisdiction, after confirmation of the plan, over the rates of the debtor has approved any rate change provided for in the plan, or such rate change is expressly conditioned on such approval.
(7) With respect to each impaired class of claims or interests—
(A) each holder of a claim or interest of such class—
(i) has accepted the plan; or
(
Source: Supplied U.S. Code snapshot — release unconfirmed · 11 U.S.C. § 1129
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Federal law — U.S. Code and appendices · legal_authorities
**(a)** Except as provided in subsection (b) or (c) of this section, an entity that is liable with the debtor on, or that has secured, a claim of a creditor against the debtor, and that pays such claim, is subrogated to the rights of such creditor to the extent of such payment.
**(b)** Such entity is not subrogated to the rights of such creditor to the extent that—
(1) a claim of such entity for reimbursement or contribution on account of such payment of such creditor’s claim is—
(A) allowed under [section 502 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section502&num=0&edition=prelim);
(B) disallowed other than under [section 502(e) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section502/e&num=0&edition=prelim); or
(C) subordinated under [section 510 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section510&num=0&edition=prelim); or
(2) as between the debtor and such entity, such entity received the consideration for the claim held by such creditor.
**(c)** The court shall subordinate to the claim of a creditor and for the benefit of such creditor an allowed claim, by way of subrogation under this section, or for reimbursement or contribution, of an entity that is liable with the debtor on, or that has secured, such creditor’s claim, until such creditor’s claim is paid in full, either through payments under this title or otherwise.
Source: Supplied U.S. Code snapshot — release unconfirmed · 11 U.S.C. § 509
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Federal law — U.S. Code and appendices · legal_authorities
**(a)** Except as provided in [section 510 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section510&num=0&edition=prelim), property of the estate shall be distributed—
(1) first, in payment of claims of the kind specified in, and in the order specified in, [section 507 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section507&num=0&edition=prelim), proof of which is timely filed under [section 501 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section501&num=0&edition=prelim) or tardily filed on or before the earlier of—
(A) the date that is 10 days after the mailing to creditors of the summary of the trustee’s final report; or
(B) the date on which the trustee commences final distribution under this section;
(2) second, in payment of any allowed unsecured claim, other than a claim of a kind specified in paragraph (1), (3), or (4) of this subsection, proof of which is—
(A) timely filed under [section 501(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section501/a&num=0&edition=prelim);
(B) timely filed under section 501(b) or 501(c) of this title; or
(C) tardily filed under [section 501(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section501/a&num=0&edition=prelim), if—
(i) the creditor that holds such claim did not have notice or actual knowledge of the case in time for timely filing of a proof of such claim under [section 501(a) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section501/a&num=0&edition=prelim); and
(ii) proof of such claim is filed in time to permit payment of such claim;
(3) third, in payment of a
Source: Supplied U.S. Code snapshot — release unconfirmed · 11 U.S.C. § 726
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Federal law — U.S. Code and appendices · legal_authorities
Except as provided in [section 510 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section510&num=0&edition=prelim), unless all other customer net equity claims have been paid in full, the trustee may not pay in full or pay in part, directly or indirectly, any net equity claim of a customer that was, on the date the transaction giving rise to such claim occurred—
(1) an insider;
(2) a beneficial owner of at least five percent of any class of equity securities of the debtor, other than—
(A) nonconvertible stock having fixed preferential dividend and liquidation rights; or
(B) interests of limited partners in a limited partnership;
(3) a limited partner with a participation of at least five percent in the net assets or net profits of the debtor; or
(4) an entity that, directly or indirectly, through agreement or otherwise, exercised or had the power to exercise control over the management or policies of the debtor.
Source: Supplied U.S. Code snapshot — release unconfirmed · 11 U.S.C. § 747
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Federal law — U.S. Code and appendices · legal_authorities
**(a)** The trustee shall distribute customer property ratably to customers on the basis and to the extent of such customers’ allowed net equity claims and in priority to all other claims, except claims of the kind specified in [section 507(a)(2) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section507/a/2&num=0&edition=prelim) that are attributable to the administration of such customer property.
**(b)**
(1) The trustee shall distribute customer property in excess of that distributed under subsection (a) of this section in accordance with [section 726 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section726&num=0&edition=prelim).
(2) Except as provided in [section 510 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section510&num=0&edition=prelim), if a customer is not paid the full amount of such customer’s allowed net equity claim from customer property, the unpaid portion of such claim is a claim entitled to distribution under [section 726 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section726&num=0&edition=prelim).
**(c)** Any cash or security remaining after the liquidation of a security interest created under a security agreement made by the debtor, excluding property excluded under [section 741(4)(B) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section741/4/B&num=0&edition=prelim), shall be apportioned between the general estate and customer property in the same proportion as the general estate of the debtor and customer property were subject to such security interest.
Source: Supplied U.S. Code snapshot — release unconfirmed · 11 U.S.C. § 752
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Federal law — U.S. Code and appendices · legal_authorities
**(a)** The trustee shall answer all margin calls with respect to a specifically identifiable commodity contract of a customer until such time as the trustee returns or transfers such commodity contract, but the trustee may not make a margin payment that has the effect of a distribution to such customer of more than that to which such customer is entitled under subsection (h) or (i) of this section.
**(b)** The trustee shall prevent any open commodity contract from remaining open after the last day of trading in such commodity contract, or into the first day on which notice of intent to deliver on such commodity contract may be tendered, whichever occurs first. With respect to any commodity contract that has remained open after the last day of trading in such commodity contract or with respect to which delivery must be made or accepted under the rules of the contract market on which such commodity contract was made, the trustee may operate the business of the debtor for the purpose of—
(1) accepting or making tender of notice of intent to deliver the physical commodity underlying such commodity contract;
(2) facilitating delivery of such commodity; or
(3) disposing of such commodity if a party to such commodity contract defaults.
**(c)** The trustee shall return promptly to a customer any specifically identifiable security, property, or commodity contract to which such customer is entitled, or shall transfer, on such customer’s behalf, such security, property, or commodity contract to a commodity broker that is not a debtor under this title, subject to such rules or regulations as the Commission may prescribe, to the extent that the value of such security, property, or commodity contract does not exceed the amount to which such customer would be entitled under subs
Source: Supplied U.S. Code snapshot — release unconfirmed · 11 U.S.C. § 766
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Federal law — U.S. Code and appendices · legal_authorities
Page 126
TITLE 11—BANKRUPTCY
§ 510
claim, is subrogated to the rights of such cred-
itor to the extent of such payment.
(b) Such entity is not subrogated to the rights
of such creditor to the extent that—
(1) a claim of such entity for reimbursement
or contribution on account of such payment of
such creditor’s claim is—
(A) allowed under section 502 of this title;
(B) disallowed other than under section
502(e) of this title; or
(C) subordinated under section 510 of this
title; or
(2) as between the debtor and such entity,
such entity received the consideration for the
claim held by such creditor.
(c) The court shall subordinate to the claim of
a creditor and for the benefit of such creditor an
allowed claim, by way of subrogation under this
section, or for reimbursement or contribution,
of an entity that is liable with the debtor on, or
that has secured, such creditor’s claim, until
such creditor’s claim is paid in full, either
through payments under this title or otherwise.
(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2585; Pub. L.
98–353, title III, § 450, July 10, 1984, 98 Stat. 375.)
HISTORICAL AND REVISION NOTES
LEGISLATIVE STATEMENTS
Section 509 of the House amendment represents a sub-
stantial revision of provisions contained in H.R. 8200 as
passed by the House and in the Senate amendment.
Section 509(a) states a general rule that a surety or co-
debtor is subrogated to the rights of a creditor assured
by the surety or co-debtor to the extent the surety or
co-debtor pays such creditor. Section 509(b) states a
general exception indicating that subrogation is not
granted to the extent that a claim of a surety or co-
debtor for reimbursement or contribution is allowed
under section 502 or disallowed other than under sec-
tion 502(e). Addition
Source: Supplied 2024 U.S. Code historical extraction · 11 U.S.C. § 510
Stored review status: historical_2024_not_currentness_verified. Same stored citation; legal effect and authority still require review.