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11 U.S.C. § 766 — Treatment of customer property
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
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Source file: Laws/federal/codes/united-states-code/title-11/section-766-treatment-of-customer-property--88961ad96d.md
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Source location: Title 11, Chapter 7, § 766; chapter-007-liquidation.md
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**(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 subsection (h) or (i) of this section if such security, property, or commodity contract were not returned or transferred under this subsection.
**(d)** If the value of a specifically identifiable security, property, or commodity contract exceeds the amount to which the customer of the debtor is entitled under subsection (h) or (i) of this section, then such customer to whom such security, property, or commodity contract is specifically identified may deposit cash with the trustee equal to the difference between the value of such security, property, or commodity contract and such amount, and the trustee then shall—
(1) return promptly such security, property, or commodity contract to such customer; or
(2) 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.
**(e)** Subject to subsection (b) of this section, the trustee shall liquidate any commodity contract that—
(1) is identified to a particular customer and with respect to which such customer has not timely instructed the trustee as to the desired disposition of such commodity contract;
(2) cannot be transferred under subsection (c) of this section; or
(3) cannot be identified to a particular customer.
**(f)** As soon as practicable after the commencement of the case, the trustee shall reduce to money, consistent with good market practice, all securities and other property, other than commodity contracts, held as property of the estate, except for specifically identifiable securities or property distributable under subsection (h) or (i) of this section.
**(g)** The trustee may not distribute a security or other property except under subsection (h) or (i) of this section.
**(h)** Except as provided in subsection (b) of this section, 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 a 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 customer property. Such distribution shall be in the form of—
(1) cash;
(2) the return or transfer, under subsection (c) or (d) of this section, of specifically identifiable customer securities, property, or commodity contracts; or
(3) payment of margin calls under subsection (a) of this section.
Notwithstanding any other provision of this subsection, a customer net equity claim based on a proprietary account, as defined by Commission rule, regulation, or order, may not be paid either in whole or in part, directly or indirectly, out of customer property unless all other customer net equity claims have been paid in full.
**(i)** If the debtor is a clearing organization, the trustee shall distribute—
(1) customer property, other than member property, ratably to customers on the basis and to the extent of such customers’ allowed net equity claims based on such customers’ accounts other than proprietary accounts, and in priority to all other claims, except claims of a 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; and
(2) member property ratably to customers on the basis and to the extent of such customers’ allowed net equity claims based on such customers’ proprietary accounts, and in priority to all other claims, except claims of a 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 member property or customer property.
**(j)**
(1) The trustee shall distribute customer property in excess of that distributed under subsection (h) or (i) 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).
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Federal law — U.S. Code and appendices · legal_authorities
**(a)** Except as provided in sections 765 and 766 of this title and in subsections (b), (c), and (d) of this section, the trustee, subject to the court’s approval, may assume or reject any executory contract or unexpired lease of the debtor.
**(b)**
(1) If there has been a default in an executory contract or unexpired lease of the debtor, the trustee may not assume such contract or lease unless, at the time of assumption of such contract or lease, the trustee—
(A) cures, or provides adequate assurance that the trustee will promptly cure, such default other than a default that is a breach of a provision relating to the satisfaction of any provision (other than a penalty rate or penalty provision) relating to a default arising from any failure to perform nonmonetary obligations under an unexpired lease of real property, if it is impossible for the trustee to cure such default by performing nonmonetary acts at and after the time of assumption, except that if such default arises from a failure to operate in accordance with a nonresidential real property lease, then such default shall be cured by performance at and after the time of assumption in accordance with such lease, and pecuniary losses resulting from such default shall be compensated in accordance with the provisions of this paragraph;
(B) compensates, or provides adequate assurance that the trustee will promptly compensate, a party other than the debtor to such contract or lease, for any actual pecuniary loss to such party resulting from such default; and
(C) provides adequate assurance of future performance under such contract or lease.
(2) Paragraph (1) of this subsection does not apply to a default that is a breach of a provision relating to—
(A) the insolvency or financial condition of the debto
Source: Supplied U.S. Code snapshot — release unconfirmed · 11 U.S.C. § 365
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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.
Source: Supplied U.S. Code snapshot — release unconfirmed · 11 U.S.C. § 510
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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
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
In this subchapter—
(1) “Act” means Commodity Exchange Act;
(2) “clearing organization” means a derivatives clearing organization registered under the Act;
(3) “Commission” means Commodity Futures Trading Commission;
(4) “commodity contract” means—
(A) with respect to a futures commission merchant, contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a contract market or board of trade;
(B) with respect to a foreign futures commission merchant, foreign future;
(C) with respect to a leverage transaction merchant, leverage transaction;
(D) with respect to a clearing organization, contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a contract market or board of trade that is cleared by such clearing organization, or commodity option traded on, or subject to the rules of, a contract market or board of trade that is cleared by such clearing organization;
(E) with respect to a commodity options dealer, commodity option;
(F)
(i) any other contract, option, agreement, or transaction that is similar to a contract, option, agreement, or transaction referred to in this paragraph; and
(ii) with respect to a futures commission merchant or a clearing organization, any other contract, option, agreement, or transaction, in each case, that is cleared by a clearing organization;
(G) any combination of the agreements or transactions referred to in this paragraph;
(H) any option to enter into an agreement or transaction referred to in this paragraph;
(I) a master agreement that provides for an agreement or transaction referred to in subparagraph (A), (B), (C), (D), (E), (F), (G), or (H), together with all supplements to such master agreement, without reg
Source: Supplied U.S. Code snapshot — release unconfirmed · 11 U.S.C. § 761
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Federal law — U.S. Code and appendices · legal_authorities
**(a)** The notice required by [section 342 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section342&num=0&edition=prelim) to customers shall instruct each customer—
(1) to file a proof of such customer’s claim promptly, and to specify in such claim any specifically identifiable security, property, or commodity contract; and
(2) to instruct the trustee of such customer’s desired disposition, including transfer under [section 766 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section766&num=0&edition=prelim) or liquidation, of any commodity contract specifically identified to such customer.
**(b)** The trustee shall comply, to the extent practicable, with any instruction received from a customer regarding such customer’s desired disposition of any commodity contract specifically identified to such customer. If the trustee has transferred, under [section 766 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section766&num=0&edition=prelim), such a commodity contract, the trustee shall transmit any such instruction to the commodity broker to whom such commodity contract was so transferred.
Source: Supplied U.S. Code snapshot — release unconfirmed · 11 U.S.C. § 765
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Regulations respecting commodity broker debtors** Notwithstanding title 11, the Commission may provide, with respect to a commodity broker that is a debtor under chapter 7 of title 11, by rule or regulation—
(1) that certain cash, securities, other property, or commodity contracts are to be included in or excluded from customer property or member property;
(2) that certain cash, securities, other property, or commodity contracts are to be specifically identifiable to a particular customer in a specific capacity;
(3) the method by which the business of such commodity broker is to be conducted or liquidated after the date of the filing of the petition under such chapter, including the payment and allocation of margin with respect to commodity contracts not specifically identifiable to a particular customer pending their orderly liquidation;
(4) any persons to which customer property and commodity contracts may be transferred under [section 766 of title 11](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title11-section766&num=0&edition=prelim); and
(5) how the net equity of a customer is to be determined.
**(b) Definitions** As used in this section, the terms “commodity broker”, “commodity contract”, “customer”, “customer property”, “member property”, “net equity”, and “security” have the meanings assigned such terms for the purposes of subchapter IV of chapter 7 of title 11.
**(c) Portfolio margining accounts** The Commission shall exercise its authority to ensure that securities held in a portfolio margining account carried as a futures account are customer property and the owners of those accounts are customers for the purposes of subchapter IV of chapter 7 of title 11.
Source: Supplied U.S. Code snapshot — release unconfirmed · 7 U.S.C. § 24
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Federal law — U.S. Code and appendices · legal_authorities
Page 220
TITLE 11—BANKRUPTCY
§ 765
by the Commission by rule or order, either be-
fore or after such transfer, and if such transfer
is—
(1) a transfer of a commodity contract en-
tered into or carried by or through the debtor
on behalf of a customer, and of any cash, secu-
rities, or other property margining or securing
such commodity contract; or
(2) the liquidation of a commodity contract
entered into or carried by or through the debt-
or on behalf of a customer.
(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2618; Pub. L.
97–222, § 17, July 27, 1982, 96 Stat. 240; Pub. L.
98–353, title III, § 487, July 10, 1984, 98 Stat. 383;
Pub. L. 111–16, § 2(9), May 7, 2009, 123 Stat. 1607.)
HISTORICAL AND REVISION NOTES
LEGISLATIVE STATEMENTS
Section 764 of the House amendment is derived from
the House bill.
SENATE REPORT NO. 95–989
Section 764 permits the trustee to void any transfer
of property that, except for such transfer, would have
been customer property, to the extent permitted under
section 544, 545, 547, 548, 549, or 724(a).
HOUSE REPORT NO. 95–595
Section 764 indicates the extent to which the avoid-
ing powers may be used by the trustee under sub-
chapter IV of chapter 7. If property recovered would
have been customer property if never transferred, then
subsection (a) indicates that it will be so treated when
recovered.
Subsection (b) prohibits avoiding any transaction
that occurs before or within five days after the petition
if the transaction is approved by the Commission and
concerns an open contractual commitment. This en-
ables the Commission to exercise its discretion to pro-
tect the integrity of the market by insuring that trans-
actions cleared with other brokers will not be undone
on a preference or a fraudulent transfer theory.
Subsectio
Source: Supplied 2024 U.S. Code historical extraction · 11 U.S.C. § 766
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