Professional Membership
TITLE 11 - BANKRUPTCY CHAPTER 7 - LIQUIDATION SUBCHAPTER III - STOCKBROKER LIQUIDATION -HEAD- Sec. 742. Effect of section 362 of this title in this subchapter -STATUTE- Notwithstanding section 362 of this title, SIPC may file an application for a protective decree under the Securities Investor Protection Act of 1970. The filing of such application stays all proceedings in the case under this title unless and until such application is dismissed. If SIPC completes the liquidation of the debtor, then the court shall dismiss the case. -SOURCE- (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2613; Pub. L. 97-222, Sec. 9, July 27, 1982, 96 Stat. 237; Pub. L. 103-394, title V, Sec. 501(d)(26), Oct. 22, 1994, 108 Stat. 4146.) HISTORICAL AND REVISION NOTES LEGISLATIVE STATEMENTS Section 742 of the House amendment deletes a sentence contained in the Senate amendment requiring the trustee in an interstate stock-brokerage liquidation to comply with the provisions of subchapter IV of chapter 7 if the debtor is also a commodity broker. The House amendment expands the requirement to require the SIPC trustee to perform such duties, if the debtor is a commodity broker, under section 7(b) of the Securities Investor Protection Act [15 U.S.C. 78ggg(b)]. The requirement is deleted from section 742 since the trustee of an intrastate stockbroker will be bound by the provisions of subchapter IV of chapter 7 if the debtor is also a commodity broker by reason of section 103 of title 11. SENATE REPORT NO. 95-989 Section 742 indicates that the automatic stay does not prevent SIPC from filing an application for a protective decree under SIPA. If SIPA does file such an application, then all bankruptcy proceedings are suspended until the SIPC action is completed. If SIPC completes liquidation of the stockbroker then the bankruptcy case is dismissed. -REFTEXT- REFERENCES IN TEXT The Securities Investor Protection Act of 1970, referred to in text, is Pub. L. 91-598, Dec. 30, 1970, 84 Stat. 1636, as amended, which is classified generally to chapter 2B-1 (Sec. 78aaa et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see section 78aaa of Title 15 and Tables. -MISC2- AMENDMENTS 1994 - Pub. L. 103-394 struck out "(15 U.S.C. 78aaa et seq.)" after "Act of 1970". 1982 - Pub. L. 97-222 substituted "title" for "chapter" after "all proceedings in the case under this". EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103-394 effective Oct. 22, 1994, and not applicable with respect to cases commenced under this title before Oct. 22, 1994, see section 702 of Pub. L. 103-394, set out as a note under section 101 of this title.