11 U.S.C. § 345 — Money of estates

Page 66 TITLE 11—BANKRUPTCY § 345 § 345. Money of estates (a) A trustee in a case under this title may make such deposit or investment of the money of the estate for which such trustee serves as will yield the maximum reasonable net return on such money, taking into account the safety of such deposit or investment. (b) Except with respect to a deposit or invest- ment that is insured or guaranteed by the United States or by a department, agency, or in- strumentality of the United States or backed by the full faith and credit of the United States, the trustee shall require from an entity with which such money is deposited or invested— (1) a bond— (A) in favor of the United States; (B) secured by the undertaking of a cor- porate surety approved by the United States trustee for the district in which the case is pending; and (C) conditioned on— (i) a proper accounting for all money so deposited or invested and for any return on such money; (ii) prompt repayment of such money and return; and (iii) faithful performance of duties as a depository; or (2) the deposit of securities of the kind speci- fied in section 9303 of title 31; unless the court for cause orders otherwise. (c) An entity with which such moneys are de- posited or invested is authorized to deposit or invest such moneys as may be required under this section. (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2565; Pub. L. 97–258, § 3(c), Sept. 13, 1982, 96 Stat. 1064; Pub. L. 98–353, title III, § 437, July 10, 1984, 98 Stat. 370; Pub. L. 99–554, title II, § 214, Oct. 27, 1986, 100 Stat. 3099; Pub. L. 103–394, title II, § 210, Oct. 22, 1994, 108 Stat. 4125.) HISTORICAL AND REVISION NOTES LEGISLATIVE STATEMENTS The House amendment moves section 345(c) of the House bill to chapter 15 as part of the pilot program for the U.S. trustees. The bond required by section 345(b) may be a blanket bond posted by the financial deposi- tory sufficient to cover deposits by trustees in several cases, as is done under current law. SENATE REPORT NO. 95–989 This section is a significant departure from section 61 of the Bankruptcy Act [section 101 of former title 11]. It permits a trustee in a bankruptcy case to make such deposit of investment of the money of the estate for which he serves as will yield the maximum reasonable net return on the money, taking into account the safe- ty of such deposit or investment. Under current law, the trustee is permitted to deposit money only with banking institutions. Thus, the trustee is generally un- able to secure a high rate of return on money of estates pending distribution, to the detriment of creditors. Under this section, the trustee may make deposits in savings and loans, may purchase government bonds, or make such other deposit or investment as is appro- priate. Under proposed 11 U.S.C. 541(a)(6), and except as provided in subsection (c) of this section, any interest or gain realized on the deposit or investment of funds under this section will become property of the estate, and will thus enhance the recovery of creditors. In order to protect the creditors, subsection (b) re- quires certain precautions against loss of the money so deposited or invested. The trustee must require from a person with which he deposits or invests money of an estate a bond in favor of the United States secured by approved corporate surety and conditioned on a proper accounting for all money deposited or invested and for any return on such money. Alternately, the trustee may require the deposit of securities of the kind speci- fied in section 15 of title 6 of the United States Code [31 U.S.C. 9303], which governs the posting of security by banks that receive public moneys on deposit. These bonding requirements do not apply to deposits or in- vestments that are insured or guaranteed the United States or a department, agency, or instrumentality of the United States, or that are backed by the full faith and credit of the United States. These provisions do not address the question of ag- gregation of funds by a private chapter 13 trustee and are not to be construed as excluding such possibility. The Rules of Bankruptcy Procedure may provide for aggregation under appropriate circumstances and ade- quate safeguards in cases where there is a significant need, such as in districts in which there is a standing chapter 13 trustee. In such case, the interest or return on the funds would help defray the cost of admin- istering the cases in which the standing trustee serves. Editorial Notes AMENDMENTS 1994—Subsec. (b). Pub. L. 103–394 substituted semi- colon for period at end of par. (2) and inserted con- cluding provisions after par. (2). 1986—Subsec. (b). Pub. L. 99–554 amended subsec. (b) generally, substituting ‘‘approved by the United States trustee for the district’’ for ‘‘approved by the court for the district’’ in par. (1)(B). 1984—Subsec. (c). Pub. L. 98–353 added subsec. (c). 1982—Subsec. (b)(2). Pub. L. 97–258 substituted ‘‘sec- tion 9303 of title 31’’ for ‘‘section 15 of title 6’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103–394 effective Oct. 22, 1994, and not applicable with respect to cases commenced under this title before Oct. 22, 1994, see section 702 of Pub. L. 103–394, set out as a note under section 101 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Effective date and applicability of amendment by Pub. L. 99–554 dependent upon the judicial district in- volved, see section 302(d), (e) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title. § 346. Special provisions related to the treatment of State and local taxes (a) Whenever the Internal Revenue Code of 1986 provides that a separate taxable estate or entity is created in a case concerning a debtor under this title, and the income, gain, loss, de- ductions, and credits of such estate shall be taxed to or claimed by the estate, a separate taxable estate is also created for purposes of any State and local law imposing a tax on or meas- ured by income and such income, gain, loss, de- ductions, and credits shall be taxed to or