/* We continue with Chapter 7, part two. */

SECTION 727 (11 U.S.C, 727)

727. Discharge.

(a) The court shall grant the debtor a discharge, unless

(1) the debtor is not an individual;

/* This seemingly innocous section of the code results

corporations, limited partnership and other business entities

being incapable of receiving a discharge. In the best of lawyerly

tradition, of course, the section doesn't say, "corporations,

limited partnerships and limited liability companies are

ineligible for discharges. The point is that shells of bankruptcy

legal entities not be more attractive than starting new

companies. */

(2) the debtor, with intent to hinder, delay, or defraud a

creditor or an officer of the estate Charged with custody of

property under this title, has transferred, removed, destroyed,

mutilated, or concealed, or has permitted to be transferred,

removed, destroyed, mutilated, or concealed

(A) property of the debtor, within one year before the date of

the filing of the petition; or

/* And as a result, persons make legal transfers then lay low for

thirteen months. */

(B) property of the estate, after the date of the filing of the

petition;

(3) the debtor has concealed, destroyed, mutilated, falsified, or

failed to keep or preserve any recorded information, including

books, documents, records, and papers, from which the debtor's

financial condition or business transactions might be

ascertained, unless such act or failure to act was justified

under all of the circumstances of the case;

/* However, this section has been authoritatively construed as

meaning that a consumer bankrupt not need keep "books." */

(4) the debtor knowingly and fraudulently, in or in connection

with the case-

(A) made a false oath or account;

(B) presented or used a false claim;

(C) gave, offered, received, or attempted to obtain money,

property, or advantage, or a promise of money, property, or

advantage, for acting or forbearing to act; or

(D) withheld from an officer of the estate entitled to possession

under this title, any recorded information, including books,

documents, records, and papers, relating to the debtor's property

or financial affairs;

(5) the debtor has failed to explain satisfactorily, before

determination of denial of discharge under this paragraph, any

loss of assets or deficiency of assets to meet the debtor's

liabilities;

(6) the debtor has refused, in the case-

(A) to obey any lawful order of the court, other than an order to

respond to a material question or to testify;

(B) on the ground of privilege against self- incrimination, to

respond to a material question approved by the court or to

testify, after the debtor has been granted immunity with respect

to the matter concerning which such privilege was invoked; or

/* An important point. The debtor must be granted immunity first

before being required to testify. The U.S. Attorney must then be

contacted and receive permission from Washington to grant

immunity. As a practical matter if a debtor declines to answer a

question that is the end of the matter. */

(C) on a ground other than the properly invoked privilege against

self- incrimination, to respond to a material question approved

by the court or to testify;

(7) the debtor has committed any act specified in paragraph (2),

(3), (4), (5), or (6) of this subsection, on or within one year

before the date of the filing of the petition, or during the

case, in connection with another case, under this title or under

the Bankruptcy Act, concerning an insider;

(8) the debtor has been granted a discharge under this section,

under section 1141 of this title, or under sections 14, 371, or

476 of the Bankruptcy Act, in a case commenced within six years

before the date of the filing of the petition;

(9) the debtor has been granted a discharge under sections 1228

or 1328 of this title, or under sections 660 or 661 of the

Bankruptcy Act, in a case commenced within six years before the

date of the filing of the petition, unless payments under the

plan in such case totaled at least-

(A) 100 percent of the allowed unsecured claims in such case; or

(B)(i) 70 percent of such claims; and

(ii) the plan was proposed by the debtor in good faith, and was

the debtor's best effort; or

/* Therefore the general rule is that the debtor can only obtain

a discharge every six years. */

(10) the court approves a written waiver of discharge executed by

the debtor after the order for relief under this chapter.

(b) Except as provided in section 523 of this title, a discharge

under subsection (a) of this section discharges the debtor from

all debts that arose before the date of the order for relief

under this chapter, and any liability on a claim that is

determined under section 502 of this title as if such claim had

arisen before the commencement of the case, whether or not a

proof of claim based on any such debt or liability is filed under

section 501 of this title, and whether or not a claim based on

any such debt or liability is allowed under section 502 of this

title.

(c)(1) The trustee, a Creditor, or the United States trustee may

object to the granting of a discharge under subsection (a) of

this section.

/* This section is again of a complex one, although it appears

simple. Note that a "party in interest" may not object, just a

creditor, trustee or U.S. trustee. */

(2) On request of a party in interest, the court may order the

trustee to examine the acts and conduct of the debtor to

determine whether a ground exists for denial of discharge.

(d) On request of the trustee, a creditor, or the United States

trustee, and after notice and a hearing, the court shall revoke a

discharge granted under subsection (a) of this section if-

(1) such discharge was obtained through the fraud of the debtor,

and the requesting party did not know of such fraud until after

the granting of such discharge;

(2) the debtor acquired property that is property of the estate,

or became entitled to acquire property that would be property of

the estate, and knowingly and fraudulently failed to report the

acquisition of or entitlement to such property, or to deliver or

surrender such property to the trustee; or

/* Divorce, property settlement and inheritances received within

six months after the commencement of the case become property of

the estate, an exception to the general rule that the estate has

no interest in the post petition earnings or property of the

debtor. */

(3) the debtor committed an act specified in subsection (a)(6) of

this section.

(e) The trustee, a creditor, or the United States trustee may

request a revocation of a discharge --

(1) under subsection (d)(1) of this section within one year after

such discharge is granted; or

(2) under subsection (d)(2) or (d)(3) of this section before the

later of-

(A) one year after the granting of such discharge; and

(B) the date the case is closed.

SECTION 728 (11 U.S.C. 728)

728. Special tax provisions,

(a) For the purposes of any State or local law imposing a tax on

or measured by income, the taxable period of a debtor that is an

individual shall terminate on the date of the order for relief

under this chapter, unless the case was converted under section

1112 or 1208 of this title.

/* The principal that the estate is created when the case is

filed results in the taxable year of the debtor ending and an new

trust entity being created. */

(b) Notwithstanding any State or local law imposing a tax on or

measured by income, the trustee shall make tax returns of income

for the estate of an individual debtor in a case under this

chapter or for a debtor that is a corporation in a case under

this chapter only if such estate or Corporation has net taxable

income for the entire period after the order for relief under

this chapter during which the case is pending. If such entity has

such income, or if the debtor is a partnership, then the trustee

shall make and file a return of income for each taxable period

during which the case was pending after the order for relief

under this chapter.

(c) If there are pending a case under this chapter concerning a

partnership and a case under this chapter concerning a partner in

such partnership, a governmental unit's claim for any unpaid

liability of such partner for a State or local tax on or measured

by income, to the extent that such liability arose from the

inclusion in such partner's taxable income of earnings of such

partnership that were not withdrawn by such partner, is a claim

only against such partnership.

(d) Notwithstanding section 541 of this title, if there are

pending a case under this chapter concerning a partnership and a

case under this chapter concerning a partner in such partnership,

then any State or local tax refund or reduction of tax of such

partner that would have otherwise been property of the estate of

such partner under section 541 of this title-

(I) is property of the estate of such partnership to the extent

that such tax refund or reduction of tax is fairly apportionable

to losses sustained by such partnership and not reimbursed by

such partner; and

(2) is otherwise property of the estate of such partner.

SUBCHAPTER III

Stockbroker Liquidation

SECTION 741(11 U.S.C. 741)

741. Definitions for this subchapter. In this subchapter --

(1) "Commission" means Securities and Exchange Commission;

(2) "customer" includes-

(A) entity with whom a person deals as principal or agent and

that has a claim against such person on account of a security

received, acquired, or held by such person in the ordinary course

of such person's business as a stockbroker, from or for the

securities account or accounts of such entity --

(i) for safekeeping;

(ii) with a view to sale;

(iii) to cover a consummated sale;

(iv) pursuant to a purchase;

(v) as collateral under a security agreement; or (vi) for the

purpose of effecting registration of

transfer; and

(B) entity that has a claim against a person arising out of-

(i) a sale or conversion of a security received, acquired, or

held as specified in subparagraph (A) of this paragraph; or

(ii) a deposit of cash, a security, or other

property with such person for the purpose of purchasing or selling a security;

(3) "customer name security" means security --

(A) held for the account of a customer on the date of the filing

of the petition by or on behalf of the debtor;

(B) registered in such customer's name on such date or in the

process of being so registered under instructions from the

debtor; and

(C) not in a form transferable by delivery on such date;

(4) "customer property" means cash, security, or other property,

and proceeds of such cash, security, or property, received,

acquired, or held by or for the account of the debtor, from or

for the securities account of a customer

(A) including

(i) property that was unlawfully converted from and that is the

lawful property of the estate;

(ii) a security held as property of the debtor to the extent such

security is necessary to meet a net equity claim of a customer

based on a security of the same class and series of an issuer;

(iii) resources provided through the use or realization of a

customer's debit cash balance or a debit item includible in the

Formula for Determination of Reserve Requirement for Brokers and

Dealers as promulgated by the Commission under the Securities

Exchange Act of 1934 (15 U.S.C. 78a et seq.); and

(iv) other property of the debtor that any applicable law, rule,

or regulation requires to be set aside or held for the benefit of

a customer, unless including such property as customer property

would not significantly increase customer property; but

(B) not including --

(i) a customer name security delivered to or reclaimed by a

customer under section 751 of this title; or

(ii) property to the extent that a customer does not have a claim

against the debtor based on such property;

(5) "margin payment" means payment or deposit of cash, a

security, or other property, that is commonly known to the

securities trade as original margin, initial margin, maintenance

margin, or variation margin, or as a mark-to- market payment, or

that secures an obligation of a participant in a securities

clearing agency;

(6) "net equity" means, with respect to all accounts of a

customer that such customer has in the same capacity --

(A)(i) aggregate dollar balance that would remain in such

accounts after the liquidation, by sale or purchase, at the time

of the filing of the petition, of all securities positions in all

such accounts, except any customer name securities of such

customer; minus

(ii) any claim of the debtor against such customer in such

capacity that would have been owing immediately after such

liquidation; plus

(B) any payment by such customer to the trustee, within 60 days

after notice under section 342 of this title, of any business

related claim of the debtor against such customer in such

capacity;

(7) "securities contract" means contract for the purchase, sale,

or loan of a security, including an option for the purchase or

sale of a security, certificate of deposit, or group or index of

securities (including any interest therein or based on the value

thereof), or any option entered into on a national securities

exchange relating to foreign currencies, or the guarantee of any

settlement of cash or securities by or to a securities clearing

agency

(8) "settlement payment" means a preliminary settlement payment,

a partial settlement payment, an interim settlement payment, a

settlement payment on account, a final settlement payment, or any

other similar payment commonly used in the securities trade; and

(9) "SIPC" means Securities Investor Protection Corporation.

SECTION 742 (11 U.S.C. 742)

742. Effect of Section 362 of this title in this subchapter.

Notwithstanding section 362 of this title, SIPC may file an

application for a protective decree under the Securities Investor

Protection Act of 1970 (15 U.S.C. 78aaa et seq.) 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.

SECTION 743 (11 U.S.C. 743)

743.. Notice. The clerk shall give the notice required by

section 342 of this title to SIPC and to the Commission.

SECTION 744 (11 U.S.C. 744)

744. Executory contracts. Notwithstanding section 365(d)(1) of

this title, the trustee shall assume or reject, under section 365

of this title, any executory contract of the debtor for the

purchase or sale of a security in the ordinary course of the

debtor's business, within a reasonable time after the date of the

order for relief, but not to exceed 30 days. If the trustee does

not assume such a Contract within such time, such Contract is

rejected,

SECTION 745 (11 U.S.C. 745)

745. Treatment of accounts.

(a) Accounts held by the debtor for a particular customer in

separate capacities shall be treated as accounts of separate

customers.

(b) If a stockbroker or a bank holds a customer net equity claim

against the debtor that arose out of a transaction for a customer

of such stockbroker or bank, each such customer of such

stockbroker or bank shall be treated as a separate customer of

the debtor.

(c) Each trustee's account specified as such on the debtor's

books, and supported by a trust deed filed with, and qualified as

such by, the Internal Revenue Service, and under the Internal

Revenue Code of 1954 (26 U.S.C. 1 et seq.), shall be treated as a

separate customer account for each beneficiary under such trustee

account.

SECTION 746 (11 U.S.C. 746)

746. Extent of customer claims.

(a) If, after the date of the filing of the petition, an entity

enters into a transaction with the debtor, in a manner that would

have made such entity a customer had such transaction occurred

before the date of the filing of the petition, and such

transaction was entered into by such entity in good faith and

before the qualification under section 322 of this title of a

trustee, such entity shall be deemed a Customer, and the date of

such transaction shall be deemed to be the date of the filing of

the petition for the purpose of determining such entity's net

equity.

(b)An entity does not have a claim as a customer to the extent

that such entity transferred to the debtor cash or a security

that, by contract, agreement, understanding, or operation of law,

is-

(1) part of the capital of the debtor; or

(2) subordinated to the claims of any or all creditors.

SECTION 747 (11 U.S.C. 747)

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.

SECTION 748 (11 U.S.C. 748)

748. Reduction of securities to money. As soon as practicable

after the date of the order for relief, the trustee shall reduce

to money, consistent with good market practice, all securities

held as property of the estate, except for customer name

securities delivered or reclaimed under section 751 of this

title.

SECTION 749 (11 U.S.C. 749)

749. Voidable transfers. (a) Except as otherwise provided in

this section, any transfer 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 sections 544, 545, 547, 548, or 549 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.

(b) Notwithstanding sections 544, 545, 547, 548, and 549 of this

title, the trustee may not avoid a transfer made before five 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 securities contract entered into or carried

by or through the debtor on behalf of a customer, and of any

cash, security, or other property margining or securing such

securities contract; or

(2) the liquidation of a securities contract entered into or

carried by or through the debtor on behalf of a customer.

SECTION 750 (11 U.S.C. 750)

750. Distribution of securities. The trustee may not distribute

a security except under section 751 of this title.

SECTION 751 (11 U.S.C. 751)

751. Customer name securities. The trustee shall deliver any

customer name security to or on behalf of the customer entitled

to such security, unless such customer has a negative net equity.

With the approval of the trustee, a customer may reclaim a

customer name security after payment to the trustee, within such

period as the trustee allows, of any claim of the debtor against

such customer to the extent that such customer will not have a

negative net equity after such payment.

SECTION 752 (11 U.S.C. 752)

752. Customer property.

(a) The trustee shall distribute customer property ratably to

customers on the basis and to the extent of such customers'

allowed net equity claims and in priority to all other claims,

except claims of the kind specified in section 507(a)(1) of this

title that are attributable to the administration of such

customer property.

(b)(1) The trustee shall distribute customer property in excess

of that distributed under subsection (a) of this section in

accordance with section 726 of this title.

(2) Except as provided in section 510 of this title, if a

customer is not paid the full amount of such customer's allowed

net equity claim from customer property, the unpaid portion of

such claim is a claim entitled to distribution under section 726

of this title.

(c) Any cash or security remaining after the liquidation of a

security interest created under a security agreement made by the

debtor, excluding property excluded under section 741(4)(B) of

this title, shall be apportioned between the general estate and

customer property in the same proportion as the general estate of

the debtor and Customer property were subject to such security

interest.

SUBCHAPTER IV

Commodity Broker Liquidation

SECTION 761(11 U.S.C. 761)

761. Definitions for this subchapter. In this subchapter

(1) "Act" means Commodity Exchange Act (7 U.S.C. 1 et seq.);

(2) "clearing organization" means organization that clears

commodity con tracts made on, or subject to the rules of, a

contract market or board of trade;

(3) "Commission" means Commodity Futures Trading Commission;

(4) "commodity contract" means-

(A) with respect to a futures commission merchant, contract for

the purchase or sale of a commodity for future delivery on, or

subject to the rules of, a contract market or board of trade;

(B) with respect to a foreign futures commission merchant,

foreign future;

(C) with respect to a leverage transaction merchant, leverage

transaction;

(D) with respect to a clearing organization, contract for the

purchase or sale of a commodity for future delivery on, or

subject to the rules of, a contract market or board of trade that

is cleared by such clearing organization, or commodity option

traded on, or subject to the rules of, a contract market or board

of trade that is cleared by such clearing organization; or

(E) with respect to a commodity options dealer, commodity option

(5) "commodity option" means agreement or transaction subject to

regulation under section 4c(b) of the Act (7 U.S.C. 6c(b));

(6) "commodity options dealer" means person that extends credit

to, or that accepts cash, a security, or other property from, a

customer of such person for the purchase or sale of an interest

in a commodity option;

(7) "contract market" means board of trade designated as a

contract market by the (`Commission' under the Act);

(8) "contract of sale", "commodity", "future delivery", "board of

trade", and "futures commission merchant" have the meanings

assigned to those terms in the Act;

(9) "customer" means-

(A) with respect to a futures commission merchant-

(i) entity for or with whom such futures Commission merchant

deals and that holds a claim against such futures Commission

merchant on account of a commodity contract made, received,

acquired, or held by or through such futures commission merchant

in the ordinary course of such futures commission merchant's

business as a futures commission merchant from or for the

commodity futures account of such entity; or

(ii) entity that holds a claim against such futures commission

merchant's arising out of-

(I) the making, liquidation, or change in the value of a

commodity contract of a kind specified in clause (i) of this

subparagraph;

(II) a deposit or payment of cash, a security, or other property

with such futures commission merchant for the purpose of making

or margining such a commodity contract; or

(III) the making or taking of delivery on such a Commodity

Contract;

(B) with respect to foreign futures commission merchant

(i) entity for or with whom such foreign futures commission

merchant deals and that holds a claim against such foreign

futures commission merchant on account of a Commodity contract

made, received, acquired, or held by or through such foreign

futures Commission merchant in the ordinary course of such

foreign futures commission merchant's business as a foreign

futures commission merchant from or for the foreign futures

account of such entity; or

(ii) entity that holds a claim against such foreign futures

commission merchant arising out of-

(I) the making, liquidation, or change in value of a commodity

Contract of a kind specified in clause (i) of this subparagraph;

(Il) a deposit or payment of cash, a security, or other property

with the debtor for the purpose of making or margining such a

Commodity contract; or

(III) the making or taking of delivery on such a Commodity

contract;

(C) with respect to a leverage transaction merchant --

(i) entity for or with whom such leverage transaction merchant

deals and that holds a claim against such leverage transaction

merchant on account of a commodity contract engaged in by or with

such leverage transaction merchant in the ordinary course of such

leverage transaction merchant's business as a leverage

transaction merchant from or for the leverage account of such

entity; or

(ii) entity that holds a claim against such leverage transaction

merchant arising out of-

(I) the making, liquidation, or change in value of a commodity

contract of a kind specified in clause (i) of this subparagraph;

(II) a deposit or payment of cash, a security, or other property

with such foreign futures commission merchant for the purpose of

entering into or margining such a Commodity contract; or

(III) the making or taking of delivery on such a commodity

contract;

(D) with respect to a clearing organization, clearing member of

such clearing organization with whom such clearing organization

deals and that holds a claim against such clearing organization

on account of cash, a security, or other property received by

such clearing organization to margin, guarantee, or secure a

commodity contract in such clearing member's proprietary account

or customers' account; or

(E) with respect to a commodity options dealer-

(i) entity for or with whom such commodity options dealer deals

and that holds a claim on account of a commodity contract made,

received, acquired, or held by or through such commodity options

dealer in the ordinary course of such commodity options dealer's

business as a commodity options dealer from or for the commodity

options account of such entity; or

(ii) entity that holds a claim against such commodity options

dealer arising out of-

(I) the making of, liquidation of, exercise of, or a change in

value of, a commodity contract of a kind specified in clause (i)

of this subparagraph; or

(11) a deposit or payment of cash, a security, or other property

with such commodity options dealer for the purpose of making,

exercising, or margining such a commodity contract;

(10) customer property" means cash, a security, or other

property, or proceeds of such cash, security, or property,

received, acquired, or held by or for the account of the debtor,

from or for the account of a customer-

(A) including

(i) property received, acquired, or held to margin, guarantee,

secure, purchase, or sell a commodity contract;

(ii) profits or contractual or other rights accruing to a

customer as a result of a commodity contract;

(iii) an open commodity contract;

(iv) specifically identifiable customer property;

(v) warehouse receipt or other document held by the debtor

evidencing ownership of or title to property to be delivered to

fulfill a commodity contract from or for the account of a

customer;

(vi) cash, a security, or other property received by the debtor

as payment for a commodity to be delivered to fulfill a commodity

contract from or for the account of a customer;

(vii) a security held as property of the debtor to the extent

such security is necessary to meet a net equity claim based on a

security of the same class and series of an issuer;

(viii) property that was unlawfully converted from and that is

the lawful property of the estate; and

(ix) other property of the debtor that any applicable law, rule,

or regulation requires to be set aside or held for the benefit of

a customer, unless including such property as customer property

would not significantly increase customer property; but

(B) not including property to the extent that a customer does not

have a claim against the debtor based on such property;

(11) foreign future means contract for the purchase or sale of a

commodity for future delivery on, or subject to the rules of, a

board of trade outside the United States;

(12) "foreign futures commission merchant" means entity engaged

in soliciting or accepting orders for the purchase or sale of a

foreign future or that, in connection with such a solicitation or

acceptance, accepts cash, a security, or other property, or

extends credit to margin, guarantee, or secure any trade or

contract that results from such a solicitation or acceptance;

(13) "leverage transaction" means agreement that is subject to

regulation under section 19 of the Commodity Exchange Act (7

U.S.C. 23), and that is commonly known to the commodities trade

as a margin account, margin contract, leverage account, or

leverage contract;

(14) "leverage transaction merchant" means person in the business

of engaging in leverage transactions;

(15) "margin payment" means payment or deposit of cash, a

security, or other property, that is commonly known to the

commodities trade as original margin, initial margin, maintenance

margin, or variation margin, including mark-to. Market payments,

settlement payments, variation payments, daily settlement

payments, and final settlement payments made as adjustments to

settlement prices;

(16) "member property" means customer property received,

acquired, or held by or for the account of a debtor that is a

clearing organization, from or for the proprietary account of a

customer that is a clearing member of the debtor; and

(17) "net equity" means, subject to such rules and regulations as

the Commission promulgates under the Act, with respect to the

aggregate of all of a customer's accounts that such customer has

in the same capacity --

(A) the balance remaining in such customer's accounts immediately

after-

(i) all commodity contracts of such customer have been

transferred, liquidated, or become identified for delivery; and

(ii) all obligations of such customer in such capacity to the

debtor have been offset; plus

(B) the value, as of the date of return under section 766 of this

title, of any specifically identifiable customer property

actually returned to such customer before the date specified in

subparagraph (A) of this paragraph; plus

(C) the value, as of the date of transfer, of-

(i) any commodity contract to which such customer is entitled

that is transferred to another person under section 766 of this

title; and

(ii) any cash, security, or other property of such customer

transferred to such other person under section 766 of this title

to margin or Secure such transferred commodity contract.

SECTION 762 (11 U.S.C. 762)

762. Notice to the Commission and right to be heard.

(a) The clerk shall give the notice required by section 342 of

this title to the Commission.

(b) The Commission may raise and may appear and be heard on any

issue in a case under this chapter.

SECTION 763 (11 U.S.C. 763)

763. Treatment of accounts.

(a) Accounts held by the debtor for a particular customer in

separate capacities shall be treated as accounts of separate

customers.

(b) A member of a clearing organization shall be deemed to hold

such member's proprietary account in a separate capacity from

such member's customers' account.

(c) The net equity in a customer's account may not be offset

against the net equity in the account of any other customer.

SECTION 764 (11 U.S.C. 764)

764. Voidable transfers.

(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 sections 544,

545, 547, 548, 549, or 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.

(b) Notwithstanding sections 544, 545, 547, 548, 549, and 724(a)

of this title, the trustee may not avoid a transfer made before

five 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 765 (11 U.S.C. 765)

765. Customer instructions.

(a) The notice required by section 342 of this title to customers

shall instruct each customer-

(1) to file a proof of such customer's claim promptly, and to

specify in such claim any specifically identifiable security,

property, or commodity contract; and

(2) to instruct the trustee of such customer's desired

disposition, including transfer under section 766 of this title

or liquidation, of any commodity contract specifically identified

to such customer.

(b) The trustee shall comply, to the extent practicable, with any

instruction received from a customer regarding such customer's

desired disposition of any commodity contract specifically

identified to such customer. If the trustee has transferred,

under section 766 of this title, such a commodity contract the

trustee shall transmit any such instruction to the commodity

broker to whom such commodity contract was so transferred.

SECTION 766 (11 U.S.C. 766)

766. Treatment of customer property.

(a) The trustee shall answer all margin calls with respect to a

specifically identifiable commodity contract of a customer until

such time as the trustee returns or transfers such commodity

contract, but the trustee may not make a margin payment that has

the effect of a distribution to such customer of more than that

to which such customer is entitled under subsection (h) or (i) of

this section.

(b) The trustee shall prevent any open commodity contract from

remaining open after the last day of trading in such commodity

contract, or into the first day on which notice of intent to

deliver on such commodity contract may be tendered, whichever

occurs first. With respect to any commodity contract that has

remained open after the last day of trading in such commodity

contract or with respect to which delivery must be made or

accepted under the rules of the contract market on which such

commodity contract was made, the trustee may operate the business

of the debtor for the purpose of-

(1) accepting or making tender of notice of intent to deliver the

physical commodity underlying such commodity contract;

(2) facilitating delivery of such commodity; or

(3) disposing of such commodity if a party to such commodity

contract defaults.

(c) The trustee shall return promptly to a customer any

specifically identifiable security, property, or commodity

contract to which such customer is entitled, or shall transfer,

on such customer's behalf, such security, property, or commodity

contract to a commodity broker that is not a debtor under this

title, subject to such rules or regulations as the Commission may

prescribe, to the extent that the value of such security,

property, or commodity contract does not exceed the amount to

which such customer would be entitled under subsection (h) or (i)

of this section if such security, property, or commodity contract

were not returned or transferred under this subsection.

(d) If the value of a specifically identifiable security,

property, or commodity contract exceeds the amount to which the

customer of the debtor is entitled under subsection (h) or (i) of

this section, then such customer to whom such security, property,

or commodity contract is specifically identified may deposit cash

with the trustee equal to the difference between the value of

such security, property, or commodity contract and such amount,

and the trustee then shall-

(1) return promptly such security, property, or commodity

contract to such customer; or

(2) transfer, on such customer's behalf, such security, property,

or commodity contract to a commodity broker that is not a debtor

under this title, subject to such rules or regulations as the

Commission may prescribe.

(e) Subject to subsection (b) of this section, the trustee shall

liquidate any commodity contract that-

(1) is identified to a particular customer and with respect to

which such customer has not timely instructed the trustee as to

the desired disposition of such commodity contract;

(2) cannot be transferred under subsection (c) of this section;

or

(3) cannot be identified to a particular customer.

(f) As soon as practicable after the commencement of the case,

the trustee shall reduce to money, consistent with good market

practice, all securities and other property, other than commodity

contracts, held as property of the estate, except for

specifically identifiable securities or property distributable

under subsection (h) or (i) of this section.

(g) The trustee may not distribute a security or other property

except under subsection (h) or (i) of this

section.

(h) Except as provided in subsection (b) of this section, the

trustee shall distribute customer property ratably to customers

on the basis and to the extent of such customers' allowed net

equity claims, and in priority to all other claims, except claims

of a kind specified in section 507(a)(1) of this title that are

attributable to the administration of customer property. Such

distribution shall be in the form of-

(1) cash;

(2) the return or transfer, under subsection (c) or

(d) of this section, of specifically identifiable customer

securities, property, or commodity contracts; or

(3) payment of margin calls under subsection (a) of this section.

Notwithstanding any other provisions of this subsection, a

customer net equity claim based on a proprietary account, as

defined by Commission rule, regulation, or order, may not be paid

either in whole or in part, directly or indirectly, out of

customer property unless all other customer net equity claims

have been paid in full.

(i)If the debtor is a clearing organization, the trustee shall

distribute-

(1) customer property, other than member property, ratably to

customers on the basis and to the extent of such customers'

allowed net equity claims based on such customers' accounts other

than proprietary accounts, and in priority to all other claims,

except claims of a kind specified in section 507(a)(1) of this

title that are attributable to the administration of such

customer property; and

(2) member property ratably to customers on the basis and to the

extent of such customers' allowed net equity claims based on such

customers' proprietary accounts, and in priority to all other

claims, except claims that are attributable to the administration

of member property or customer property.

(j)(1) The trustee shall distribute customer property in excess

of that distributed under subsection (h) or (i) of this section

in accordance with section 726 of this title.

(2) Except as provided in section 510 of this title, if a

customer is not paid the full amount of such customer's allowed

net equity claim from customer property, the unpaid portion of

such claim is a claim entitled to distribution under section 726

of this title.