(a)Except as otherwise provided in this section, any transfer by the debtor of property that, but for such transfer, would have been customer property, may be avoided by the trustee, and such property shall be treated as customer property, if and to the extent that the trustee avoids such transfer under section
724(a) of this title. For the purpose of such sections, the property so transferred shall be deemed to have been property of the debtor, and, if such transfer was made to a customer or for a customer’s benefit, such customer shall be deemed, for the purposes of this section, to have been a creditor.
724(a) of this title, the trustee may not avoid a transfer made before seven days after the order for relief, if such transfer is approved by the Commission by rule or order, either before or after such transfer, and if such transfer is—
(1)a transfer of a commodity contract entered into or carried by or through the debtor on behalf of a customer, and of any cash, securities, 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 debtor on behalf of a customer.
Section 764 of the House amendment is derived from the House bill.
senate report no. 95–989
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
house report no. 95–595
764 indicates the extent to which the avoiding powers may be used by the trustee under subchapter 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 enables the Commission to exercise its discretion to protect the integrity of the market by insuring that transactions cleared with other brokers will not be undone on a preference or a fraudulent transfer theory.
Subsection (c) insulates variation margin payments and other deposits from the avoiding powers except to the extent of actual fraud under section
548(a)(1). This facilitates prepetition transfers and protects the ordinary course of business in the market.
2009—Subsec. (b). Pub. L. 111–16substituted “seven days” for “five days” in introductory provisions.
1984—Subsec. (a). Pub. L. 98–353substituted “any transfer by the debtor” for “any transfer”.
1982—Subsec. (a). Pub. L. 97–222, § 17(a), substituted “but” for “except”, inserted “such property” after “trustee, and”, and substituted “shall be” for “is” wherever appearing.
Subsec. (b). Pub. L. 97–222, § 17(b), substituted “order for relief” for “date of the filing of the petition”.
Subsec. (c). Pub. L. 97–222, § 17(c), struck out subsec. (c) which provided that the trustee could not avoid a transfer that was a margin payment to or deposit with a commodity broker or forward contract merchant or was a settlement payment made by a clearing organization and that occurred before the commencement of the case.
Amendment by Pub. L. 98–353effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) ofPub. L. 98–353, set out as a note under section
101 of this title.
The table below lists the classification updates, since Jan. 3, 2012, for this section. Updates to a broader range of sections may be found at the update page for containing chapter, title, etc.
The most recent Classification Table update that we have noticed was Tuesday, August 13, 2013
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