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[See main edition for text of (1) to (3)]

(4) the debtor is not prohibited by law from taking any action necessary to carry out the plan;

(5) except to the extent that the holder of a particular claim has agreed to a different treatment of such claim, the plan provides that on the effective date of the plan each holder of a claim of a kind specified in section 507(a)(1) of this title will receive on account of such claim cash equal to the allowed amount of such claim; and

(6) the plan is in the best interests of creditors and is feasible.

(As amended Pub. L. 98-353, title III, § 497, July 10, 1984, 98 Stat. 384.)

AMENDMENTS.

1984-Subsec. (b)(4). Pub. L. 98-353, § 497(1), struck out "to be taken" after "necessary".

Subsec. (b)(5). Pub. L. 98-353, § 497(2), substituted provisions requiring the plan to provide payment of cash in an amount equal to the allowed amount of a claim except to the extent that the holder of a particular claim has agreed to different treatment of such claim, for provisions which required the plan to provide for payment of property of a value equal to the allowed amount of such claim except to the extent that the holder of a particular claim has waived such payment on such claim.

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.

§ 945. Continuing jurisdiction and closing of the case (a) The court may retain jurisdiction over the case for such period of time as is necessary for the successful implementation of the plan.

[See main edition for text of (b)]

(As amended Pub. L. 98-353, title III, § 498, July 10, 1984, 98 Stat. 384.)

[blocks in formation]

CHAPTER REFERRED TO IN OTHER SECTIONS This chapter is referred to in sections 103, 109, 303, 326, 327, 329, 346, 347, 362, 363, 365, 502, 503, 706, 1102, 1203, 1301, 1306, 1307 of this title; title 26 sections 108, 1398, 6012; title 28 sections 157, 586, 1930; title 29 sections 1341, 1342.

SUBCHAPTER I-OFFICERS AND

ADMINISTRATION

§ 1102. Creditors' and equity security holders' committees

(a)(1) As soon as practicable after the order for relief under chapter 11 of this title, the United States trustee shall appoint a committee of creditors holding unsecured claims and may appoint additional committees of creditors or of equity security holders as the United States trustee deems appropriate.

(2) On request of a party in interest, the court may order the appointment of additional committees of creditors or of equity security holders if necessary to assure adequate representation of creditors or of equity security holders. The United States trustee shall appoint any such committee.

(b)(1) A committee of creditors appointed under subsection (a) of this section shall ordinarily consist of the persons, willing to serve, that hold the seven largest claims against the debtor of the kinds represented on such committee, or of the members of a committee organized by creditors before the commencement of the case under this chapter, if such committee was fairly chosen and is representative of the different kinds of claims to be represented.

[See main edition for text of (2)]

[(c) Repealed. Pub. L. 99-554, title II, § 221(2), Oct. 27, 1986, 100 Stat. 3101.]

(As amended Pub. L. 98-353, title III, § 499, July 10, 1984, 98 Stat. 384; Pub. L. 99-554, title II, § 221, Oct. 27, 1986, 100 Stat. 3101.)

AMENDMENTS

1986-Subsec. (a). Pub. L. 99-554, § 221(1), amended subsec. (a) generally, substituting “chapter 11 of this title, the United States trustee shall appoint a committee of creditors holding unsecured claims and may appoint additional committees of creditors or of equity security holders as the United States trustee deems appropriate" for "this chapter, the court shall appoint a committee of creditors holding unsecured claims" in par. (1) and "United States trustee" for "court" in par. (2).

Subsec. (c). Pub. L. 99-554, § 221(2), struck out subsec. (c) which read as follows: "On request of a party in interest and after notice and a hearing, the court may change the membership or the size of a committee appointed under subsection (a) of this section if the membership of such committee is not representative of the different kinds of claims or interests to be represented."

1984-Subsec. (b)(1). Pub. L. 98-353 substituted "commencement of the case" for "order for relief".

EFFECTIVE DATE OF 1986 AMENDMENT Effective date and applicability of amendment by Pub. L. 99-554 dependent upon the judicial district involved, 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.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 101, 328, 348, 503, 901, 1103 of this title.

§ 1103. Powers and duties of committees

[See main edition for text of (a)]

(b) An attorney or accountant employed to represent a committee appointed under section 1102 of this title may not, while employed by such committee, represent any other entity having an adverse interest in connection with the case. Representation of one or more creditors of the same class as represented by the committee shall not per se constitute the representation of an adverse interest.

(c) A committee appointed under section 1102 of this title may

[See main edition for text of (1) and (2)]

(3) participate in the formulation of a plan, advise those represented by such committee of such committee's determinations as to any plan formulated, and collect and file with the court acceptances or rejections of a plan;

(4) request the appointment of a trustee or examiner under section 1104 of this title; and

[See main edition for text of (5); (d)]

(As amended Pub. L. 98-353, title III, §§ 324, 500, July 10, 1984, 98 Stat. 358, 384.)

AMENDMENTS

1984 Subsec. (b). Pub. L. 98–353, §§ 324, 500(a), substituted "An attorney or accountant" for "A person", substituted "entity having an adverse interest" for "entity", and inserted provision that representation of one or more creditors of the same class as represented by the committee shall not per se constitute the representation of an adverse interest.

Subsec. (c)(3). Pub. L. 98-353, § 500(b)(1), substituted "determinations" for "recommendations", and "acceptances or rejections" for "acceptances".

Subsec. (c)(4). Pub. L. 98–353, § 500(b)(2), struck out "if a trustee or examiner, as the case may be, has not previously been appointed under this chapter in the case" after "section 1104 of this title".

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.

§ 1104. Appointment of trustee or examiner

(a) At any time after the commencement of the case but before confirmation of a plan, on request of a party in interest or the United States trustee, and after notice and a hearing, the court shall order the appointment of a trustee

[See main edition for text of (1) and (2)] (b) If the court does not order the appointment of a trustee under this section, then at any time before the confirmation of a plan, on

request of a party in interest or the United States trustee, and after notice and a hearing, the court shall order the appointment of an examiner to conduct such an investigation of the debtor as is appropriate, including an investigation of any allegations of fraud, dishonesty, incompetence, misconduct, mismanagement, or irregularity in the management of the affairs of the debtor of or by current or former management of the debtor, if—

[See main edition for text of (1) and (2)]

(c) If the court orders the appointment of a trustee or an examiner, if a trustee or an examiner dies or resigns during the case or is removed under section 324 of this title, or if a trustee fails to qualify under section 322 of this title, then the United States trustee, after consultation with parties in interest 1 shall appoint, subject to the court's approval, one disinterested person other than the United States trustee to serve as trustee or examiner, as the case may be, in the case.

(As amended Pub. L. 99-554, title II, § 222, Oct. 27, 1986, 100 Stat. 3102.)

AMENDMENTS

1986-Subsecs. (a), (b). Pub. L. 99-554, § 222(1), (2), inserted "or the United States trustee" after "party in interest".

Subsec. (c). Pub. L. 99-554, § 222(3), substituted “the United States trustee, after consultation with parties in interest shall appoint, subject to the court's approval, one disinterested person other than the United States trustee to serve" for "the court shall appoint one disinterested person to serve".

EFFECTIVE DATE OF 1986 AMENDMENT

Effective date and applicability of amendment by Pub. L. 99-554 dependent upon the judicial district involved, 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.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 322, 546, 557, 1103, 1106, 1161 of this title.

§ 1105. Termination of trustee's appointment

At any time before confirmation of a plan, on request of a party in interest or the United States trustee, and after notice and a hearing, the court may terminate the trustee's appointment and restore the debtor to possession and management of the property of the estate and of the operation of the debtor's business.

(As amended Pub. L. 98-353, title III, § 501, July 10, 1984, 98 Stat. 384; Pub. L. 99-554, title II, § 223, Oct. 27, 1986, 100 Stat. 3102.)

AMENDMENTS

1986-Pub. L. 99-554 inserted "or the United States trustee" after "party in interest". 1984-Pub. L. 98-353 substituted "estate and of the" for "estate, and".

EFFECTIVE Date of 1986 AMENDMENT Effective date and applicability of amendment by Pub. L. 99-554 dependent upon the judicial district in

'So in original. Probably should be followed by a comma.

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.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1161 of this title.

§ 1106. Duties of trustee and examiner

(a) A trustee shall

(1) perform the duties of a trustee specified in sections 704(2), 704(5), 704(7), 704(8), and 704(9) of this title;

[See main edition for text of (2) to (4)]

(5) as soon as practicable, file a plan under section 1121 of this title, file a report of why the trustee will not file a plan, or recommend conversion of the case to a case under chapter 7, 12, or 13 of this title or dismissal of the case;

[See main edition for text of (6) and (7)]

(b) An examiner appointed under section 1104(c) of this title shall perform the duties specified in paragraphs (3) and (4) of subsection (a) of this section, and, except to the extent that the court orders otherwise, any other duties of the trustee that the court orders the debtor in possession not to perform.

(As amended Pub. L. 98-353, title III, §§ 311(b)(1), 502, July 10, 1984, 98 Stat. 355, 384; Pub. L. 99-554, title II, § 257(c), Oct. 27, 1986, 100 Stat. 3114.)

AMENDMENTS

1986-Subsec. (a)(5). Pub. L. 99-554 inserted reference to chapter 12.

1984-Subsec. (a)(1). Pub. L. 98-353, § 311(b)(1), substituted "704(5), 704(7), 704(8), and 704(9)” for “704(4), 704(6), 704(7) and 704(8)".

Subsec. (b). Pub. L. 98-353, § 502, inserted ", except to the extent that the court orders otherwise,”.

EFFECTIVE DATE OF 1986 AMENDMENT

Amendment by Pub. L. 99-554 effective 30 days after Oct. 27, 1986, but not applicable to cases commenced under this title before that date, see section 302(a), (c)(1) 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.

PAYMENT OF CERTAIN BENEFITS TO RETIRED FORMER EMPLOYEES

Pub. L. 99-656, § 2, Nov. 14, 1986, 100 Stat. 3668, as amended by Pub. L. 100-41, May 15, 1987, 101 Stat. 309; Pub. L. 100-99, Aug. 18, 1987, 101 Stat. 716, provided that:

"(a) Notwithstanding any other provision of chapter 11 of title 11, United States Code, the bankruptcy trustee in each case described in subsection (b) shall pay benefits until October 15, 1987, to retired former

employees under a plan, fund, or program maintained or established by the debtor in such case prior to filing a petition (through the purchase of insurance or otherwise) for the purpose of providing medical, surgical, or hospital care benefits, or benefits in the event of sickness, accident, disability, or death.

"(b) This section is effective with respect to

"(1) cases commenced under chapter 11 of title 11, United States Code, in which a plan for reorganization has not been confirmed by the court and in which any such benefit is still being paid on October 2, 1986;

"(2) in cases under which an order for relief is entered under chapter 11 of title 11, United States Code, after October 2, 1986, while such case is a case under chapter 11; or

"(3) in cases under title 11, United States Code, involving a partnership which was in existence prior to July 17, 1986, and was the subject of a petition under chapter 11 of title 11, United States Code, upon which an order for relief was entered by a bankruptcy court on August 7, 1986, and where one of the partners received bankruptcy court authorization on August 6, 1986, approving rejection of a partnership agreement.

"(c) If any provision of this section or the application thereof to any person or circumstance is held invalid, the provisions of every other part of this section and the first section shall not be affected thereby."

Similar provisions were contained in Pub. L. 99–500, § 101(b) [title VI, § 608], Oct. 18, 1986, 100 Stat. 1783-39, 1783-74, and Pub. L. 99-591, § 101(b) [title VI, § 608], Oct. 30, 1986, 100 Stat. 3341-39, 3341-74, as amended by Pub. L. 100-41, May 15, 1987, 101 Stat. 309; Pub. L. 100-99, Aug. 18, 1987, 101 Stat. 716.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1107, 1111, 1202, 1203, 1301 of this title.

§ 1107. Rights, powers, and duties of debtor in possession

(a) Subject to any limitations on a trustee serving in a case under this chapter, and to such limitations or conditions as the court prescribes, a debtor in possession shall have all the rights, other than the right to compensation under section 330 of this title, and powers, and shall perform all the functions and duties, except the duties specified in sections 1106(a)(2), (3), and (4) of this title, of a trustee serving in a case under this chapter.

[See main edition for text of (b)] (As amended Pub. L. 98-353, title III, § 503, July 10, 1984, 98 Stat. 384.)

AMENDMENTS

1984-Subsec. (a). Pub. L. 98-353 substituted “on a trustee serving in a case” for “on a trustee".

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.

§ 1108. Authorization to operate business

Unless the court, on request of a party in interest and after notice and a hearing, orders otherwise, the trustee may operate the debtor's business.

(As amended Pub. L. 98-353, title III, § 504, July 10, 1984, 98 Stat. 384.)

AMENDMENTS

1984-Pub. L. 98-353 inserted ", on request of a party in interest and after notice and a hearing,”.

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.

§ 1110. Aircraft equipment and vessels

(a) The right of a secured party with a purchase-money equipment security interest in, or of a lessor or conditional vendor of, whether as trustee or otherwise, aircraft, aircraft engines, propellers, appliances, or spare parts, as defined in section 101 of the Federal Aviation Act of 1958 (49 U.S.C. 1301), or vessels of the United States, as defined in subsection B(4) of the Ship Mortgage Act, 1920 (46 U.S.C. 911(4)),3 that are subject to a purchase-money equipment security interest granted by, leased to, or conditionally sold to, a debtor that is an air carrier operating under a certificate of convenience and necessity issued by the Civil Aeronautics Board, or a water carrier that holds a certificate of public convenience and necessity or permit issued by the Interstate Commerce Commission, as the case may be, to take possession of such equipment in compliance with the provisions of a purchase-money equipment security agreement, lease, or conditional sale contract, as the case may be, is not affected by section 362 or 363 of this title or by any power of the court to enjoin such taking of possession, unless

[See main edition for text of (1) and (2); (b); credits]

CODIFICATION

Part of subsec. (a) is set out in this supplement to reflect the transfer of subsection B(4) of the Ship Mortgage Act, 1920, referred to in text, to Title 46, Appendix, Shipping.

TERMINATION OF CIVIL AERONAUTICS BOARD AND
TRANSFER OF CERTAIN FUNCTIONS

All functions, powers, and duties of the Civil Aeronautics Board were terminated or transferred by section 1551 of Title 49, Appendix, Transportation, effective in part on Dec. 31, 1981, in part on Jan. 1, 1983, and in part on Jan. 1, 1985.

§ 1112. Conversion or dismissal

(a) The debtor may convert a case under this chapter to a case under chapter 7 of this title unless

(1) the debtor is not a debtor in possession; (2) the case originally was commenced as an involuntary case under this chapter; or

(3) the case was converted to a case under this chapter other than on the debtor's request.

(b) Except as provided in subsection (c) of this section, on request of a party in interest or

"Now (49 App. U.S.C. 1301). "Now (46 App. U.S.C. 911(4)).

the United States trustee, and after notice and a hearing, the court may convert a case under this chapter to a case under chapter 7 of this title or may dismiss a case under this chapter, whichever is in the best interest of creditors and the estate, for cause, including—

[See main edition for text of (1) to (4)]

(5) denial of confirmation of every proposed plan and denial of a request made for additional time for filing another plan or a modification of a plan;

[See main edition for text of (6) and (7)] (8) material default by the debtor with respect to a confirmed plan;

(9) termination of a plan by reason of the occurrence of a condition specified in the plan; or

(10) nonpayment of any fees or charges required under chapter 123 of title 28.

[See main edition for text of (c)]

(d) The court may convert a case under this chapter to a case under chapter 12 or 13 of this title only if—

(1) the debtor requests such conversion; (2) the debtor has not been discharged under section 1141(d) of this title; and

(3) if the debtor requests conversion to chapter 12 of this title, such conversion is equitable.

(e) Except as provided in subsections (c) and (f), the court, on request of the United States trustee, may convert a case under this chapter to a case under chapter 7 of this title or may dismiss a case under this chapter, whichever is in the best interest of creditors and the estate if the debtor in a voluntary case fails to file, within fifteen days after the filing of the petition commencing such case or such additional time as the court may allow, the information required by paragraph (1) of section 521, including a list containing the names and addresses of the holders of the twenty largest unsecured claims (or of all unsecured claims if there are fewer than twenty unsecured claims), and the approximate dollar amounts of each of such claims.

(f) Notwithstanding any other provision of this section, a case may not be converted to a case under another chapter of this title unless the debtor may be a debtor under such chapter. (As amended Pub. L. 98-353, title III, § 505, July 10, 1984, 98 Stat. 384; Pub. L. 99-554, title II, §§ 224, 256, Oct. 27, 1986, 100 Stat. 3102, 3114.)

AMENDMENTS

1986-Subsec. (b). Pub. L. 99-554, § 224(1)(A), inserted "or the United States trustee" after “party in interest".

Subsec. (b)(10). Pub. L. 99-554, § 224(1)(B)–(D), added par. (10).

Subsec. (d). Pub. L. 99-554, § 256, inserted reference to chapter 12 and added par. (3).

Subsecs. (e), (f). Pub. L. 99-554, § 224(2), (3), added subsec. (e) and redesignated former subsec. (e) as (f).

1984-Subsec. (a)(2). Pub. L. 98-353, § 505(a)(1), substituted "originally was commenced as an involuntary case" for "is an involuntary case originally commenced".

Subsec. (a)(3). Pub. L. 98-353, § 505(a)(2), substituted "other than on" for "on other than".

Subsec. (b)(5). Pub. L. 98-353, § 505(b)(1), inserted "a request made for" before "additional".

Subsec. (b)(8). Pub. L. 98-353, § 505(b)(2), substituted "or" for "and".

EFFECTIVE DATE OF 1986 AMENDMENT Amendment by section 256 of Pub. L. 99-554 effective 30 days after Oct. 27, 1986, but not applicable to cases commenced under this title before that date, see section 302(a), (c)(1) of Pub. L. 99-554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure.

Effective date and applicability of amendment by section 224 of Pub. L. 99-554 dependent upon the judicial district involved, see section 302(d), (e) of Pub. L. 99-554.

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.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 348, 365, 706, 726, 728, 1208, 1307 of this title.

§ 1113. Rejection of collective bargaining agreements (a) The debtor in possession, or the trustee if one has been appointed under the provisions of this chapter, other than a trustee in a case covered by subchapter IV of this chapter and by title I of the Railway Labor Act, may assume or reject a collective bargaining agreement only in accordance with the provisions of this section.

(b)(1) Subsequent to filing a petition and prior to filing an application seeking rejection of a collective bargaining agreement, the debtor in possession or trustee (hereinafter in this section "trustee" shall include a debtor in possession), shall—

(A) make a proposal to the authorized representative of the employees covered by such agreement, based on the most complete and reliable information available at the time of such proposal, which provides for those necessary modifications in the employees benefits and protections that are necessary to permit the reorganization of the debtor and assures that all creditors, the debtor and all of the affected parties are treated fairly and equitably; and

(B) provide, subject to subsection (d)(3), the representative of the employees with such relevant information as is necessary to evaluate the proposal.

(2) During the period beginning on the date of the making of a proposal provided for in paragraph (1) and ending on the date of the hearing provided for in subsection (d)(1), the trustee shall meet, at reasonable times, with the authorized representative to confer in good faith in attempting to reach mutually satisfactory modifications of such agreement.

(c) The court shall approve an application for rejection of a collective bargaining agreement only if the court finds that

(1) the trustee has, prior to the hearing, made a proposal that fulfills the requirements of subsection (b)(1);

(2) the authorized representative of the employees has refused to accept such proposal without good cause; and

(3) the balance of the equities clearly favors rejection of such agreement.

(d)(1) Upon the filing of an application for rejection the court shall schedule a hearing to be held not later than fourteen days after the date of the filing of such application. All interested parties may appear and be heard at such hearing. Adequate notice shall be provided to such parties at least ten days before the date of such hearing. The court may extend the time for the commencement of such hearing for a period not exceeding seven days where the circumstances of the case, and the interests of justice require such extension, or for additional periods of time to which the trustee and representative agree.

(2) The court shall rule on such application for rejection within thirty days after the date of the commencement of the hearing. In the interests of justice, the court may extend such time for ruling for such additional period as the trustee and the employees' representative may agree to. If the court does not rule on such application within thirty days after the date of the commencement of the hearing, or within such additional time as the trustee and the employees' representative may agree to, the trustee may terminate or alter any provisions of the collective bargaining agreement pending the ruling of the court on such application.

(3) The court may enter such protective orders, consistent with the need of the authorized representative of the employee to evaluate the trustee's proposal and the application for rejection, as may be necessary to prevent disclosure of information provided to such representative where such disclosure could compromise the position of the debtor with respect to its competitors in the industry in which it is engaged.

(e) If during a period when the collective bargaining agreement continues in effect, and if essential to the continuation of the debtor's business, or in order to avoid irreparable damage to the estate, the court, after notice and a hearing, may authorize the trustee to implement interim changes in the terms, conditions, wages, benefits, or work rules provided by a collective bargaining agreement. Any hearing under this paragraph shall be scheduled in accordance with the needs of the trustee. The implementation of such interim changes shall not render the application for rejection moot.

(f) No provision of this title shall be construed to permit a trustee to unilaterally terminate or alter any provisions of a collective bargaining agreement prior to compliance with the provisions of this section.

(Added Pub. L. 98-353, title III, § 541(a), July 10, 1984, 98 Stat. 390.)

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