[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1840 Introduced in Senate (IS)]
114th CONGRESS
1st Session
S. 1840
To amend title 11, United States Code, to provide for the liquidation,
reorganization, or recapitalization of a covered financial corporation,
and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 22, 2015
Mr. Cornyn (for himself, Mr. Toomey, Mr. Crapo, and Mr. Lee) introduced
the following bill; which was read twice and referred to the Committee
on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend title 11, United States Code, to provide for the liquidation,
reorganization, or recapitalization of a covered financial corporation,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Taxpayer Protection and Responsible
Resolution Act''.
SEC. 2. GENERAL PROVISIONS RELATING TO COVERED FINANCIAL CORPORATIONS.
(a) Definition.--Section 101 of title 11, United States Code, is
amended by inserting the following after paragraph (9):
``(9A) The term `covered financial corporation' means any
corporation incorporated or organized under any Federal or
State law, other than a stockbroker, a commodity broker, or an
entity of the kind specified in paragraph (2) or (3) of section
109(b), that is--
``(A) a bank holding company, as defined in section
2(a) of the Bank Holding Company Act of 1956 (12 U.S.C.
1841(a)); or
``(B) a corporation that exists for the primary
purpose of owning, controlling, and financing
subsidiaries that are predominantly engaged in
activities that the Board of Governors of the Federal
Reserve System has determined are financial in nature
or incidental to such financial activity for purposes
of section 4(k) of the Bank Holding Company Act of 1956
(12 U.S.C. 1843(k)).''.
(b) Applicability of Chapters.--Section 103 of title 11, United
States Code, is amended--
(1) in subsection (a)--
(A) by striking ``section 1161'' and inserting
``sections 1161 and 1401''; and
(B) by striking ``or 13'' and inserting ``13, or
14'';
(2) in subsection (g), by inserting ``subsection (m) and''
before ``section''; and
(3) by adding at the end the following:
``(l) Chapter 14 of this title applies only in a case under such
chapter.
``(m) Except as otherwise provided in chapter 14 of this title,
chapter 11 of this title applies in a case under chapter 14 of this
title.''.
(c) Who May Be a Debtor.--Section 109 of title 11, United States
Code, is amended--
(1) in subsection (d)--
(A) by striking ``and'';
(B) by striking ``or a'' and inserting ``or''; and
(C) by inserting ``, or a covered financial
corporation'' after ``Federal Deposit Insurance
Corporation Improvement Act of 1991''; and
(2) by adding at the end the following:
``(i) Only a covered financial corporation may be a debtor in a
case under chapter 14.''.
(d) Distribution of Property of the Estate.--Section 726(a)(1) of
title 11, United States Code, is amended by inserting ``in payment of
any unpaid fees, costs, and expenses of a special trustee appointed
under section 1406, and then'' after ``first,''.
(e) Confirmation of Plan.--Section 1129(a) of title 11, United
States Code, is amended by adding at the end the following:
``(17) In a case under chapter 14, all payable fees, costs,
and expenses of the special trustee have been paid or the plan
provides for the payment of all such fees, costs, and expenses,
as of the effective date of the plan.
``(18) In a case under chapter 14, confirmation of the plan
is not likely to cause serious adverse effects on financial
stability in the United States.''.
(f) Qualification of Trustee.--Section 322(b)(2) of title 11,
United States Code, is amended by striking ``The'' and inserting ``In
cases under chapter 14, the United States trustee shall recommend to
the court, and in all other cases, the''.
SEC. 3. LIQUIDATION, REORGANIZATION, OR RECAPITALIZATION OF A COVERED
FINANCIAL CORPORATION.
(a) In General.--Title 11, United States Code, is amended by
inserting before chapter 15 the following:
``CHAPTER 14--LIQUIDATION, REORGANIZATION, OR RECAPITALIZATION OF A
COVERED FINANCIAL CORPORATION
``Sec.
``1401. Inapplicability of other sections.
``1402. Definitions for this chapter.
``1403. Commencement of a case concerning a covered financial
corporation.
``1404. Regulators.
``1405. Special transfer of property of the estate.
``1406. Special trustee.
``1407. Automatic stay; assumed debt.
``1408. Treatment of qualified financial contracts and affiliate
contracts.
``1409. Licenses, permits, and registrations.
``1410. Conversion to chapter 7.
``1411. Exemption from securities laws.
``1412. Inapplicability of certain avoiding powers.
``1413. Consideration of financial stability.
``Sec. 1401. Inapplicability of other sections
``Sections 303 and 321(c) do not apply in a case under this
chapter.
``Sec. 1402. Definitions for this chapter
``In this chapter, the following definitions shall apply:
``(1) The term `Board' means the Board of Governors of the
Federal Reserve System.
``(2) The term `bridge company' means a newly formed
corporation to which property of the estate may be transferred
under section 1405(a) and the equity securities of which may be
transferred to a special trustee under section 1406(a).
``(3) The term `capital structure debt' means all unsecured
debt of the debtor for borrowed money for which the debtor is
the primary obligor, other than a qualified financial contract
and other than debt secured by a lien on property of the estate
that is to be transferred to a bridge company pursuant to an
order of the court under section 1405(a).
``(4) The term `contractual right' means a contractual
right of a kind described in section 555, 556, 559, 560, or
561.
``(5) The term `qualified financial contract' means any
contract of a kind defined in paragraph (25), (38A), (47), or
(53B) of section 101, section 741(7), or paragraph (4), (5),
(11), or (13) of section 761.
``(6) The term `special trustee' means a trustee appointed
under section 1406(a)(2)(A).
``(7) The term `trustee' means a person who is--
``(A) appointed or elected under section 1104; and
``(B) qualified under section 322 to serve as
trustee in the case or, in the absence of such person,
the debtor in possession.
``Sec. 1403. Commencement of a case concerning a covered financial
corporation
``(a) In General.--A case under this chapter may be commenced by
the filing of a petition with the court by an entity that may be a
debtor under section 301 if the entity states to the best of its
knowledge, under penalty of perjury, in the petition that the entity is
a covered financial corporation.
``(b) Order for Relief.--The commencement of a case under
subsection (a) constitutes an order for relief under this chapter.
``(c) Liability.--The members of the board of directors (or body
performing similar functions) of a covered financial corporation shall
not be liable to shareholders, creditors or other parties in interest
for--
``(1) a good faith filing of a case under this chapter; or
``(2) for any reasonable action taken, before or after the
date on which a case is commenced under this chapter, in good
faith in contemplation of or in connection with such a filing
or a transfer under section 1405 or section 1406.
``(d) Notice to Court.--Counsel to the entity that may be a debtor
shall provide, to the greatest extent practicable, sufficient
confidential notice to the Director of the Administrative Office of the
United States Courts and the chief judge of the court of appeals
embracing the district in which the case is pending regarding the
potential commencement of a case under this chapter without disclosing
the identity of the potential debtor to allow the Director and chief
judge to designate and ensure the ready availability of 1 of the
bankruptcy judges designated under section 298(b)(1) of title 28 to be
available to preside over the case.
``Sec. 1404. Regulators
``The Board, the Securities and Exchange Commission, the
Comptroller of the Currency, and the Federal Deposit Insurance
Corporation may raise and may appear and be heard on any issue in any
case or proceeding under this chapter.
``Sec. 1405. Special transfer of property of the estate
``(a) In General.--
``(1) Transfer.--On request of the trustee, and after
notice and hearing not less than 24 hours after the order for
relief, the court may order a transfer under this section of
property of the estate, and the assignment of debt, executory
contracts, unexpired leases, qualified financial contracts, and
agreements of the debtor, to a bridge company. Except as
provided under this section, the provisions of sections 363 and
365 shall apply to a transfer and assignment under this
section.
``(2) Property of estate.--Upon the entry of an order
approving a transfer under this section, any property
transferred, and any debt, executory contract, unexpired
leases, qualified financial contract, or agreement assigned
under such order shall no longer be property of the estate.
``(b) Notice.--Unless the court orders otherwise, notice of a
request for an order under subsection (a) shall consist of electronic
or telephonic notice of not less than 24 hours to--
``(1) the holders of the 20 largest secured claims against
the debtor;
``(2) the holders of the 20 largest unsecured claims
against the debtor;
``(3) counterparties to any debt, executory contract,
unexpired lease, qualified financial contract, or agreement
requested to be transferred under this section;
``(4) the Board;
``(5) the Federal Deposit Insurance Corporation;
``(6) the Secretary of the Treasury;
``(7) the Comptroller of the Currency;
``(8) the Securities and Exchange Commission;
``(9) the United States trustee or bankruptcy
administrator; and
``(10) each primary financial regulatory agency (as defined
in section 2(12) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (12 U.S.C. 5301(12))) with respect to
any affiliate the equity securities of which are proposed to be
transferred under this section.
``(c) Determination.--The court may not order a transfer under this
section unless the court determines, based upon a preponderance of the
evidence, that--
``(1) the transfer under this section is necessary to
prevent serious adverse effects on financial stability in the
United States;
``(2) the transfer does not provide for the assumption of
any capital structure debt by the bridge company;
``(3) the transfer does not provide for the transfer to the
bridge company of any property of the estate that is subject to
a lien securing a debt, executory contract, unexpired lease, or
agreement of the debtor unless--
``(A)(i) the bridge company assumes such debt,
executory contract, unexpired lease, or agreement,
including any claims arising in respect thereof that
would not be allowed secured claims under section
506(a)(1), and after giving effect to such transfer,
such property remains subject to the lien securing such
debt, executory contract, unexpired lease, or
agreement; and
``(ii) the court has determined that assumption of
such debt, executory contract, unexpired lease, or
agreement by the bridge company is in the best interest
of the estate; or
``(B) such property is being transferred to the
bridge company in accordance with the provisions of
section 363;
``(4) the transfer does not provide for the assumption by
the bridge company of any debt, executory contract, unexpired
lease, or agreement of the debtor secured by a lien on property
in which the estate has an interest unless the transfer
provides for such property to be transferred to the bridge
company in accordance with paragraph (3)(A) of this subsection;
``(5) the transfer does not provide for the transfer of the
equity of the debtor;
``(6) the debtor has demonstrated that the bridge company
is not likely to fail to meet the obligations of any debt,
executory contract, qualified financial contract, unexpired
lease, or other agreement assumed and assigned to the bridge
company;
``(7) the transfer provides for the transfer to a special
trustee all of the equity securities in the bridge company and
appointment of a special trustee in accordance with section
1406;
``(8) after giving effect to the transfer, adequate
provision has been made for the payment of the fees, costs, and
expenses of the estate and special trustee; and
``(9) the bridge company will have governing documents, and
initial directors and senior officers, that are in the best
interest of creditors and the estate.
``(d) Requirements Before Transfer.--Immediately before a transfer
under this section, the bridge company that is the recipient of the
transfer shall--
``(1) not have any property, debts, executory contracts,
unexpired leases, qualified financial contracts, or agreements,
other than any property acquired or debts, executory contracts,
unexpired leases, qualified financial contracts, or agreements
assumed when acting as a transferee of a transfer under this
section; and
``(2) have equity securities that are property of the
estate, which may be sold or distributed in accordance with
this title.
``Sec. 1406. Special trustee
``(a) In General.--
``(1) Transfer to special trustee.--An order approving a
transfer under section 1405 shall require the trustee to
transfer to a special trustee all of the equity securities in
the bridge company that is the recipient of a transfer under
section 1405 to hold in trust for the sole benefit of the
estate subject to satisfaction of the special trustee's fees,
costs, and expenses. The trust of which the special trustee is
the trustee shall be a newly formed trust governed by a trust
agreement approved by the court as in the best interests of the
estate, and shall exist for the sole purpose of holding and
administering, and shall be permitted to dispose of, the equity
securities of the bridge company in accordance with the trust
agreement.
``(2) Appointment of special trustee.--
``(A) In general.--A special trustee shall be
qualified and independent and shall be appointed by the
court.
``(B) Proposal by trustee.--In connection with the
hearing to approve a transfer under section 1405, the
trustee may propose to the court a person to serve as
special trustee, if the trustee confirms to the court
that the Board has been consulted regarding the
identity of the proposed special trustee and advises
the court of the results of such consultation.
``(b) Trust Agreement.--The trust agreement governing a trust
formed under subsection (a)(1) shall provide--
``(1) for the payment of the fees, costs, expenses, and
indemnities of the special trustee from the assets of the
debtor's estate;
``(2) that the special trustee provide--
``(A) quarterly reporting to the estate, which
shall be filed with the court; and
``(B) information about the bridge company
reasonably requested by a party in interest to prepare
a disclosure statement for a plan providing for
distribution of any securities of the bridge company if
such information is necessary to prepare such
disclosure statement;
``(3) that for as long as the equity securities of the
bridge company are held by the trust, the special trustee shall
file a notice with the court in connection with--
``(A) any change in a director or senior officer of
the bridge company;
``(B) any modification to the governing documents
of the bridge company; or
``(C) any material corporate action of the bridge
company, including--
``(i) recapitalization;
``(ii) a material borrowing;
``(iii) termination of an intercompany debt
or guarantee;
``(iv) a transfer of a substantial portion
of the assets of the bridge company; or
``(v) the issuance or sale of any
securities of the bridge company;
``(4) that any sale of any equity securities of the bridge
company shall not be consummated until the special trustee
consults with the Federal Deposit Insurance Corporation and the
Board regarding such sale and discloses the results of such
consultation with the court;
``(5) that, subject to reserves for payments permitted
under paragraph (1) provided for in the trust agreement, the
proceeds of the sale of any equity securities of the bridge
company by the special trustee be held in trust for the benefit
of or transferred to the estate;
``(6) the process and guidelines for the replacement of the
special trustee; and
``(7) that the property held in trust by the special
trustee is subject to distribution in accordance with
subsection (c).
``(c) Distribution of Assets Held in Trust.--
``(1) In general.--The special trustee shall distribute the
assets held in trust--
``(A) if the court confirms a plan in the case, in
accordance with the plan on the effective date of the
plan; or
``(B) if the case is converted to a case under
chapter 7 under section 1410.
``(2) Termination.--As soon as practicable after a final
distribution under paragraph (1), the office of the special
trustee shall terminate, except as may be necessary to wind up
and conclude the business and financial affairs of the trust.
``(d) Applicability.--After a transfer to the special trustee under
this section, the special trustee shall be subject only to applicable
nonbankruptcy law, and the actions and conduct of the special trustee
shall no longer be subject to approval by the court in the case under
this chapter.
``Sec. 1407. Automatic stay; assumption
``(a) Automatic Stay.--
``(1) In general.--A petition filed under section 1403
operates as a stay, applicable to all entities, of the
acceleration, termination, or modification of any debt,
contract, lease, or agreement of the kind described in
paragraph (2), or of any right or obligation under any such
debt, contract, lease, or agreement, solely because of--
``(A) a default by the debtor under any such debt,
contract, lease, or agreement; or
``(B) a provision in such debt, contract, lease, or
agreement, or in applicable nonbankruptcy law, that is
conditioned on--
``(i) the insolvency or financial condition
of the debtor at any time before the closing of
the case;
``(ii) the commencement of a case under
this title concerning the debtor;
``(iii) the appointment of or taking
possession by a trustee in a case under this
title concerning the debtor or by a custodian
before the commencement of the case; or
``(iv) a credit rating agency rating, or
absence or withdrawal of a credit rating agency
rating of--
``(I) the debtor at any time after
the commencement of the case;
``(II) an affiliate during the 48
hours after the commencement of the
case;
``(III) the bridge company while
the trustee or the special trustee is a
direct or indirect beneficial holder of
more than 50 percent of the equity
securities of--
``(aa) the bridge company;
or
``(bb) an affiliate, if all
of the direct or indirect
interests in the affiliate that
are property of the estate are
transferred under section 1406;
or
``(IV) an affiliate while the
trustee or the special trustee is a
direct or indirect beneficial holder of
more than 50 percent of the equity
securities of--
``(aa) the bridge company;
or
``(bb) the affiliate, if
all of the direct or indirect
interests in the affiliate that
are property of the estate are
transferred under section 1405.
``(2) Debt, contract, lease, or agreement.--A debt,
contract, lease, or agreement described in this paragraph--
``(A) is--
``(i) any debt, executory contract, or
unexpired lease of the debtor;
``(ii) any agreement under which the debtor
issued or is obligated for debt;
``(iii) any debt, executory contract, or
unexpired lease of an affiliate; and
``(iv) any agreement under which an
affiliate issued or is obligated for debt; and
``(B) does not include capital structure debt or
qualified financial contracts.
``(3) Termination of stay.--A stay under this subsection
terminates--
``(A) as to the debtor, upon the earliest of--
``(i) 48 hours after the commencement of
the case;
``(ii) assumption of the debt, contract,
lease, or agreement by the bridge company under
an order authorizing a transfer under section
1405;
``(iii) a final order of the court denying
the request for a transfer of the debt,
contract, lease, or agreement under section
1405; or
``(iv) the time the case is dismissed; and
``(B) as to an affiliate, upon the earliest of--
``(i) 48 hours after the commencement of
the case, if the court has not ordered a
transfer under section 1405;
``(ii) the entry of an order authorizing a
transfer under section 1405 in which the direct
or indirect interests in the affiliate that are
property of the estate are not transferred
under section 1405;
``(iii) a final order of the court denying
the request for a transfer under section 1405;
or
``(iv) the time the case is dismissed.
``(4) Applicability.--Sections (d), (e), (f), and (g) of
section 362 apply to a stay under this subsection.
``(b) Assumption by Bridge Company.--A debt, executory contract,
unexpired lease of the debtor, or any other agreement described in
subsection (a)(2), may be assumed by a bridge company in a transfer
under section 1405 notwithstanding any provision in an agreement or in
applicable nonbankruptcy law that--
``(1) prohibits, restricts, or conditions the assignment of
the debt, contract, lease, or agreement; or
``(2) accelerates, terminates, or modifies, or permits a
party other than the debtor to accelerate, terminate, or
modify, the debt, contract, lease, or agreement on account of--
``(A) the assignment of the debt, contract, lease,
or agreement; or
``(B) a change in control of any party to the debt,
contract, lease, or agreement.
``(c) No Acceleration, Termination, or Modification of Agreements
of Debtor.--
``(1) In general.--A debt, contract, lease, or agreement of
the kind described in subsection (a)(2) may not be accelerated,
terminated, or modified, and any right or obligation under such
debt, contract, lease, or agreement may not be accelerated,
terminated, or modified, as to the bridge company solely
because of a provision in the debt, contract, lease, or
agreement or in applicable nonbankruptcy law--
``(A) of the kind described in subsection (a)(1)(B)
as applied to the debtor;
``(B) that prohibits, restricts, or conditions the
assignment of the debt, contract, lease, or agreement;
or
``(C) that accelerates, terminates, or modifies, or
permits a party other than the debtor to accelerate,
terminate, or modify, the debt, contract, lease or
agreement, on account of--
``(i) the assignment of the debt, contract,
lease, or agreement; or
``(ii) a change in control of any party to
the debt, contract, lease, or agreement.
``(2) Default.--If there has been a default by the debtor
under a provision other than the kind described in paragraph
(1) in a debt, contract, lease, or agreement of the kind
described in subsection (a)(2), the bridge company may assume
such debt, contract, lease, or agreement only if the bridge
company--
``(A) cures, or provides adequate assurance in
connection with a transfer under section 1405 that the
bridge company will promptly cure, the default;
``(B) compensates, or provides adequate assurance
in connection with a transfer under section 1405 that
the bridge company will promptly compensate, a party
other than the debtor to the debt, contract, lease, or
agreement, for any actual pecuniary loss to the party
resulting from the default; and
``(C) provides adequate assurance in connection
with a transfer under section 1405 of future
performance under the debt, contract, lease, or
agreement, as determined by the court under section
1405(c)(4).
``Sec. 1408. Treatment of qualified financial contracts and affiliate
contracts
``(a) In General.--Notwithstanding sections 362(b)(6), 362(b)(7),
362(b)(17), 362(b)(27), 362(o), 555, 556, 559, 560, and 561, a petition
filed under section 1403 operates as a stay, during the period
specified in section 1407(a)(3)(A), applicable to all entities, of the
exercise of a contractual right--
``(1) to cause the acceleration, termination, modification,
or liquidation of a qualified financial contract of the debtor
or an affiliate;
``(2) to offset or net out any termination value, payment
amount, or other transfer obligation arising under or in
connection with a qualified financial contract of the debtor or
an affiliate; or
``(3) under any security agreement or arrangement or other
credit enhancement forming a part of or related to a qualified
financial contract of the debtor or an affiliate.
``(b) Payment and Delivery Obligations.--
``(1) In general.--During the period specified in section
1407(a)(3)(A), the trustee or the affiliate shall perform all
payment and delivery obligations under a qualified financial
contract of the debtor or the affiliate, as the case may be,
that become due after the commencement of the case. The stay
provided under subsection (a) terminates as to a qualified
financial contract of the debtor or an affiliate immediately
upon the failure of the trustee or the affiliate, as the case
may be, to perform any such obligation during such period.
``(2) Failure to perform.--Any failure by a counterparty to
any qualified financial contract of the debtor or any affiliate
to perform any payment or delivery obligation under such
qualified financial contract, including during the pendency of
the stay provided under subsection (a), shall constitute a
breach of such qualified financial contract by the
counterparty.
``(c) Assignment or Assumption.--Notwithstanding any provision of
subsection 1407(b) or applicable nonbankruptcy law, subject to the
court's approval, a qualified financial contract between an entity and
the debtor may be assigned to or assumed by the bridge company in a
transfer under section 1405 only if--
``(1) all qualified financial contracts between the entity
and the debtor are assigned to and assumed by the bridge
company in the transfer under section 1405;
``(2) all claims of the entity against the debtor under any
qualified financial contract between the entity and the debtor
(other than any claim that, under the terms of the qualified
financial contract, is subordinated to the claims of general
unsecured creditors) are assigned to and assumed by the bridge
company;
``(3) all claims of the debtor against the entity under any
qualified financial contract between the entity and the debtor
are assigned to and assumed by the bridge company; and
``(4) all property securing or any other credit enhancement
furnished by the debtor for any qualified financial contract
described in paragraph (1) or any claim described in paragraph
(2) or (3) under any qualified financial contract between the
entity and the debtor is assigned to and assumed by the bridge
company.
``(d) No Acceleration, Termination, or Modification of Qualified
Financial Contracts.--Notwithstanding any provision of a qualified
financial contract or of applicable nonbankruptcy law, a qualified
financial contract of the debtor that is assumed by or assigned to the
bridge company in a transfer under section 1405 may not be accelerated,
terminated, modified, or liquidated after the entry of the order
approving a transfer under section 1405, and any right or obligation
under the qualified financial contract may not be accelerated,
terminated, or modified, after the entry of the order approving a
transfer under section 1405 solely because of a provision of the kind
described in section 1407(c)(1), other than a provision of the kind
described in section 1407(b) that occurs after property of the estate
no longer includes a direct beneficial interest or an indirect
beneficial interest through the special trustee, in more than 50
percent of the equity securities of the bridge company.
``(e) No Acceleration, Termination, Modification, or Liquidation of
Agreements of Affiliates.--Notwithstanding any provision in any
agreement or in applicable nonbankruptcy law, an agreement (including
an executory contract, unexpired lease, qualified financial contract,
or an agreement under which the affiliate issued or is obligated for
debt) of an affiliate that is assumed by or assigned to the bridge
company in a transfer under section 1405, and any right or obligation
under such agreement, may not be accelerated, terminated, modified, or
liquidated after the entry of the order approving a transfer under
section 1405 solely because of a provision of the kind described in
section 1407(c)(1), other than a provision of the kind described in
section 1407(b) that occurs after the bridge company is no longer a
direct or indirect beneficial holder of more than 50 percent of the
equity securities of the affiliate at any time after the commencement
of the case if--
``(1) all direct or indirect interests in the affiliate
that are property of the estate are transferred under section
1405 to the bridge company within the period specified in
subsection (a);
``(2) the bridge company assumes--
``(A) any guarantee or other credit enhancement
issued by the debtor relating to the agreement of the
affiliate; and
``(B) any right of setoff, netting arrangement, or
debt of the debtor that directly arises out of or
directly relates to the guarantee or credit
enhancement; and
``(3) any property of the estate that directly serves as
collateral for the guarantee or credit enhancement is
transferred to the bridge company.
``Sec. 1409. Licenses, permits, and registrations
``(a) In General.--Notwithstanding any otherwise applicable
nonbankruptcy law, if a request is made under section 1405 for a
transfer of property of the estate, any Federal, State, or local
license, permit, or registration that the debtor or an affiliate had
immediately before the commencement of the case and that is proposed to
be transferred under section 1405 may not be accelerated, terminated,
or modified at any time after the request solely on account of--
``(1) the insolvency or financial condition of the debtor
at any time before the closing of the case;
``(2) the commencement of a case under this title
concerning the debtor;
``(3) the appointment of or taking possession by a trustee
in a case under this title concerning the debtor or by a
custodian before the commencement of the case; or
``(4) a transfer under section 1405.
``(b) Validity of Certain Licenses, Permits, and Registrations.--
Notwithstanding any otherwise applicable nonbankruptcy law, any
Federal, State, or local license, permit, or registration that the
debtor had immediately before the commencement of the case that is
included in a transfer under section 1405 shall be valid and all rights
and obligations thereunder shall vest in the bridge company.
``Sec. 1410. Conversion to chapter 7
``Notwithstanding section 109(b), a court may convert a case under
this chapter to a case under chapter 7 if--
``(1) a transfer described in section 1405 has taken place;
``(2) the court has ordered the appointment of a special
trustee under section 1406; and
``(3) the court finds, after providing notice and
conducting a hearing, that the conversion of the case is in the
best interests of the creditors and the estate.
``Sec. 1411. Exemption from securities laws
``For purposes of section 1145, a security of the bridge company
shall be deemed to be a security of a successor to the debtor under a
plan if the court approves the disclosure statement for the plan as
providing adequate information (as defined in section 1125(a)) about
the bridge company and the security.
``Sec. 1412. Inapplicability of certain avoiding powers
``A transfer made or an obligation incurred by the debtor to an
affiliate prior to or after the commencement of the case, including any
obligation released by the debtor or the estate to or for the benefit
of an affiliate, in contemplation of or in connection with a transfer
under section 1405, is not avoidable under section 544, 547,
548(a)(1)(B), or 549, or under any similar nonbankruptcy law.
``Sec. 1413. Consideration of financial stability
``The court may consider the effect that any decision in connection
with this chapter may have on financial stability in the United
States.''.
(b) Technical and Conforming Amendment.--The table of chapters for
title 11, United States Code, is amended by inserting after the item
relating to chapter 13 the following:
``14. Liquidation, reorganization, or recapitalization of a 1401''.
covered financial corporation.
SEC. 4. AMENDMENTS TO TITLE 28, UNITED STATES CODE.
(a) Amendment to Chapter 13.--Chapter 13 of title 28, United States
Code, is amended by adding at the end the following:
``Sec. 298. Judge for a case under chapter 14 of title 11
``(a) Notwithstanding section 295, the Chief Justice of the United
States shall designate not fewer than 10 bankruptcy judges to be
available to hear a case under chapter 14 of title 11. Bankruptcy
judges may request to be considered by the Chief Justice of the United
States for such designation.
``(b)(1) Notwithstanding section 155, a case under chapter 14 of
title 11 shall be heard under section 157 by a bankruptcy judge
designated under subsection (a), who shall be assigned to hear such
case by the chief judge of the court of appeals for the circuit
embracing the district in which the case is pending.
``(2) If the bankruptcy judge assigned to hear a case under
paragraph (1) is not assigned to the district in which the case is
pending, the bankruptcy judge shall be temporarily assigned to the
district. To the greatest extent practicable, the approvals required
under section 155(a) shall be obtained.
``(c) A case under chapter 14 of title 11, and all proceedings in
the case, shall take place in the district in which the case is
pending.''.
(b) Amendment to Section 1334.--Section 1334 of title 28, United
States Code, is amended by adding at the end the following:
``(f) This section does not grant jurisdiction to the district
court after a transfer pursuant to an order under section 1405 of title
11 of any proceeding related to a special trustee appointed, or to a
bridge company formed to accomplish a transfer, under section 1405 of
title 11.''.
(c) Technical and Conforming Amendment.--The table of sections for
chapter 13 of title 28, United States Code, is amended by adding at the
end the following:
``298. Judge for a case under chapter 14 of title 11.''.
SEC. 5. REPEAL OF TITLE II OF DODD-FRANK WALL STREET REFORM AND
CONSUMER PROTECTION ACT.
(a) In General.--Title II of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (Public Law 111-203) is repealed and any
Federal law amended by such title shall, on and after the date of
enactment of this Act, be effective as if title II of the Dodd-Frank
Wall Street Reform and Consumer Protection Act had not been enacted.
(b) Conforming Amendments.--
(1) Dodd-frank wall street reform and consumer protection
act.--The Dodd-Frank Wall Street Reform and Consumer Protection
Act is amended--
(A) in the table of contents, by striking all items
relating to title II;
(B) in section 165(d)(6), by striking ``, a
receiver appointed under title II,'';
(C) in section 716(g), by striking ``or a covered
financial company under title II'';
(D) in section 1105(e)(5), by striking ``amount of
any securities issued under that chapter 31 for such
purpose shall be treated in the same manner as
securities issued under section 208(n)(5)(E)'' and
inserting ``issuances of such securities under that
chapter 31 for such purpose shall be treated as public
debt transactions of the United States, and the
proceeds from the sale of any obligations acquired by
the Secretary under this paragraph shall be deposited
into the Treasury of the United States as miscellaneous
receipts''; and
(E) in section 1106(c)(2)(A)--
(i) in clause (i), by inserting ``, other
than a covered financial corporation (as
defined in section 101(9A) of title 11, United
States Code),'' after ``company''; and
(ii) in clause (ii), by inserting ``, other
than a covered financial corporation (as
defined in section 101(9A) of title 11, United
States Code),'' after ``company''.
(2) Federal deposit insurance act.--Section 10(b)(3)(A) of
the Federal Deposit Insurance Act (12 U.S.C. 1820(b)(3)(A)) is
amended by striking ``, or of such nonbank financial company
supervised by the Board of Governors or bank holding company
described in section 165(a) of the Financial Stability Act of
2010, for the purpose of implementing its authority to provide
for orderly liquidation of any such company under title II of
that Act''.
(3) Federal reserve act.--Section 13(3) of the Federal
Reserve Act (12 U.S.C. 343(3)) is amended--
(A) in subparagraph (B)--
(i) in clause (ii), by striking ``,
resolution under title II of the Dodd-Frank
Wall Street Reform and Consumer Protection Act,
or'' and inserting ``or is subject to
resolution under''; and
(ii) in clause (iii), by striking ``,
resolution under title II of the Dodd-Frank
Wall Street Reform and Consumer Protection Act,
or'' and inserting ``or resolution under''; and
(B) by striking subparagraph (E).
SEC. 6. LIMITATION ON ADVANCES FROM A FEDERAL RESERVE BANK.
Section 10B(b) of the Federal Reserve Act (12 U.S.C. 347b(b)) is
amended--
(1) by redesignating paragraph (5) as paragraph (6);
(2) by inserting after paragraph (4) the following:
``(5) Limitation on advances to covered financial
corporations and bridge companies.--Notwithstanding paragraph
(2), a Federal Reserve bank may not make advances to any
covered financial corporation that is a debtor in a pending
case under chapter 14 of title 11, United States Code, or to a
bridge company, for the purpose of providing debtor-in-
possession financing pursuant to section 364 of such title.'';
and
(3) in paragraph (6), as redesignated--
(A) by redesignating subparagraphs (B) through (E)
as subparagraphs (D) through (G), respectively; and
(B) by inserting after subparagraph (A) the
following:
``(B) Bridge company.--The term `bridge company'
has the same meaning as in section 1402(2) of title 11,
United States Code.
``(C) Covered financial corporation.--The term
`covered financial corporation' has the same meaning as
in section 101(9A) of title 11, United States Code.''.
SEC. 7. LIMITATION ON USE OF FEDERAL FUNDS.
Notwithstanding any other provision of law, no funds appropriated
to the Federal Government may be paid to a covered financial
corporation (as defined in section 101(9A) of title 11, United States
Code, as amended by section 2(a) of this Act), or to a creditor of any
covered financial corporation, to satisfy a claim in a case under
chapter 14 of title 11, United States Code.
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