11 U.S.C. § 747

Current through P.L. 118-47 (published on www.congress.gov on 03/23/2024)

Section 747 - Subordination of certain customer claims

Except as provided in section 510 of this title, unless all other customer net equity claims have been paid in full, the trustee may not pay in full or pay in part, directly or indirectly, any net equity claim of a customer that was, on the date the transaction giving rise to such claim occurred-

(1) an insider;

(2) a beneficial owner of at least five percent of any class of equity securities of the debtor, other than-

(A) nonconvertible stock having fixed preferential dividend and liquidation rights; or

(B) interests of limited partners in a limited partnership;

(3) a limited partner with a participation of at least five percent in the net assets or net profits of the debtor; or

(4) an entity that, directly or indirectly, through agreement or otherwise, exercised or had the power to exercise control over the management or policies of the debtor.

11 U.S.C. § 747

Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2613; Pub. L. 97-222, §13, July 27, 1982, 96 Stat. 238.

HISTORICAL AND REVISION NOTES

SENATE REPORT NO. 95-989Section 747 subordinates to other customer claims, all claims of a customer who is an insider, a five percent owner of the debtor, or otherwise in control of the debtor.

EDITORIAL NOTES

AMENDMENTS1982- Pub. L. 97-222 substituted "the transaction giving rise to such claim occurred" for "such claim arose" in provisions preceding par. (1).

claim: The term "claim" means-(A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or(B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured.
debtor: The term "debtor" means person or municipality concerning which a case under this title has been commenced.(13A) The term "debtor's principal residence"-(A) means a residential structure if used as the principal residence by the debtor, including incidental property, without regard to whether that structure is attached to real property; and(B) includes an individual condominium or cooperative unit, a mobile or manufactured home, or trailer if used as the principal residence by the debtor.
entity: The term "entity" includes person, estate, trust, governmental unit, and United States trustee.
insider: The term "insider" includes-(A) if the debtor is an individual-(i) relative of the debtor or of a general partner of the debtor;(ii) partnership in which the debtor is a general partner;(iii) general partner of the debtor; or(iv) corporation of which the debtor is a director, officer, or person in control;(B) if the debtor is a corporation-(i) director of the debtor;(ii) officer of the debtor;(iii) person in control of the debtor;(iv) partnership in which the debtor is a general partner;(v) general partner of the debtor; or(vi) relative of a general partner, director, officer, or person in control of the debtor;(C) if the debtor is a partnership-(i) general partner in the debtor;(ii) relative of a general partner in, general partner of, or person in control of the debtor;(iii) partnership in which the debtor is a general partner;(iv) general partner of the debtor; or(v) person in control of the debtor;(D) if the debtor is a municipality, elected official of the debtor or relative of an elected official of the debtor;(E) affiliate, or insider of an affiliate as if such affiliate were the debtor; and(F) managing agent of the debtor.