Bankruptcy Code Chapter 14: a) Define Financial ...

1 2/28/12 Bankruptcy Code Chapter 14: A Proposal Contents Introduction I. Creation of a New Chapter 14 a) Define Financial Institution b) Create Chapter 14 c) Assign Chapter 14 Cases and Proceedings to Designated Art III District Judges II. Commencing a Chapter 14 Case a) Allow the Entire Covered Financial Institution (Including Subsidiaries) to be Resolved in Bankruptcy b) Give the Primary Regulator the Power to File an Involuntary Petition c) Allow the Primary Regulator to File Based on Balance Sheet Insolvency III. Role of the Primary Regulator in Chapter 14; DIP Funding a) Regulator Standing b) Motions for the Use, Sale, or Lease of Property c) Debtor in Possession (DIP) Financing d) Filing Plans of Reorganization IV. Qualified Financial Contacts in Chapter 14 Introduction a) Repos and the Automatic Stay b) Derivatives/Swaps and the Automatic Stay c) Repos, Derivatives/Swaps and Trustee Avoiding Powers Summary of Proposed Revisions 2 Introduction This paper describes several proposed changes to the Bankruptcy Code that are designed for and limited to the reorganization or liquidation of the nation s largest Financial institutions.

3 In the following sections, we explain the features of this new Chapter 14 by (a) outlining existing bankrupt cy provisions that we propose to amend or replace, (b)

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