(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2644; Pub. L. 96–448, title II, § 227(b),Oct. 14, 1980, 94 Stat. 1931; Pub. L. 104–88, title III, § 302(2),Dec. 29, 1995, 109 Stat. 943; Pub. L. 109–8, title XII, § 1218,Apr. 20, 2005, 119 Stat. 195.)
Historical and Revision Notes
Section 1172 of the House amendment is derived from section 1171 of the House bill in preference to section 1170 of the Senate amendment with the exception that section 1170(4) of the Senate amendment is incorporated into section 1172(a)(1) of the House amendment.
Section 1172(b) of the House amendment is derived from section 1171(c) of the Senate amendment. The section gives the Interstate Commerce Commission the exclusive power to approve or disapprove the transfer of, or operation of or over, any of the debtor’s rail lines over which the Commission has jurisdiction, subject to review under the Administrative Procedures Act [5
et seq. and 701 et seq.]. The section does not apply to a transfer of railroad lines to a successor of the debtor under a plan of reorganization by merger or otherwise.
The House amendment deletes section 1171(a) of the Senate amendment as a matter to be determined by the Rules of Bankruptcy Procedure. It is anticipated that the rules will specify the period of time, such as 18 months, within which a trustee must file with the court a proposed plan of reorganization for the debtor or a report why a plan cannot be formulated. Incorporation by reference of section
means that a party in interest will also have a right to file a plan of reorganization. This differs from the position taken in the Senate amendment which would have permitted the Interstate Commerce Commission to file a plan of reorganization.
senate report no. 95–989
adds to the general provisions required or permitted in reorganization plans by section
. Subsection (1) requires that a reorganization plan under the railroad subchapter specify the means by which the value of the claims of creditors and the interests of equity holders which are materially and adversely affected by the plan are to be realized. Subsection (2) permits a plan to include provisions for the issuance of warrants. Subsection (3) requires that the plan provide for fixed charges by probable earnings for their payment. Subsection (4) requires that the plan specify the means by which, and the extent to which, the debtor’s rail service is to be continued, and shall identify any rail service to be terminated. Subsection (5) permits other appropriate provisions not inconsistent with the chapter. With the exception of subsection (4), the requirements are comparable to those of present section
77(b) [section 205(b) of former title 11]; subsection (4) emphasizes the public interest in the preservation of rail transportation.
imposes on the court, rather than the Interstate Commerce Commission, as in present section
77 [section 205 of former title 11], the responsibility for the plan of reorganization. The Commission is empowered to make final decisions subject only to review by the court under the standards of the Administrative Procedure Act [5
et seq. and 701 et seq.] as to any part of the plan which deals with transportation matters, such as the grant of operating rights of or over, or transfer of, the debtor’s rail lines to other carriers.
Subsection (a) requires the trustee to file a plan of reorganization within 18 months after the petition is filed, and permits the court, for good cause shown, to extend such time limit. Subsection (b) permits a plan to be proposed by any interested person, and permits the trustee to revise his plan at any time before it is approved by the court.
Subsections (c), (d) and (e) require the court, when a plan is submitted by the trustee or, if the court deems it worthy of consideration, a plan submitted is proposed by any other person proposes the transfer of, or operation of or over, any of the debtor’s lines by other carriers, to refer to such provisions of the plan to the Interstate Commerce Commission. The Commission, within 240 days, and after a hearing if the Commission so determines, is to report to the court the effects of such provisions of the plan in the light of national transportation policy and sections
5(3)(f)(A), (B), and (D), (F)–(I) of the Interstate Commerce Act [49
U.S.C. 11350(b)(1), (2), (4), (6)–(9)]. The report of the Commission is conclusive in all further hearings on the plan by the court, subject only to review pursuant to 5
house report no. 95–595
(enacted as section
)] A plan in a railroad reorganization case may include provisions in addition to those required and permitted under an ordinary reorganization plan. It may provide for the transfer of any or all of the operating railroad lines of the debtor to another operating railroad.
Paragraph (1) contemplates a liquidating plan for the debtor’s rail lines, much as occurred in the Penn Central case by transfer of operating lines to ConRail. Such a liquidating plan is not per se contrary to the public interest, and the court will have to determine on a case-by-case basis, with the guidance of the Interstate Commerce Commission and of other parties in interest, whether the particular plan proposed is in the public interest, as required under proposed 11
The plan may also provide for abandonment in accordance with section
, governing abandonment generally. Neither of these provisions in a plan, transfer or abandonment of lines, requires ICC approval. Confirmation of the plan by the court authorizes the debtor to comply with the plan in accordance with section
notwithstanding any bankruptcy law to the contrary.
2005—Subsec. (c)(1). Pub. L. 109–8
11326(a)” for “section
1995—Subsecs. (b), (c)(1). Pub. L. 104–88
substituted “Board” for “Commission” wherever appearing.
1980—Subsec. (c). Pub. L. 96–448
added subsec. (c).
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 this title before such effective date, except as otherwise provided, see section 1501 ofPub. L. 109–8
, set out as a note under section
of this title.
Effective Date of 1995 Amendment
Amendment by Pub. L. 104–88
effective Jan. 1, 1996, see section 2 ofPub. L. 104–88
, set out as an Effective Date note under section
Effective Date of 1980 Amendment
Amendment by Pub. L. 96–448
effective Oct. 1, 1980, see section 710(a) ofPub. L. 96–448
, set out as a note under section
of this title.
Nonapplication of Subsec. (c)
For provision that subsec. (c) of this section does not apply to Amtrak and its employees, see section 142(d) ofPub. L. 105–134
, set out in an Employee Protection Reforms note under section