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U.S. Code as of:
01/19/04
Section 303. Involuntary cases
(a) An involuntary case may be commenced only under chapter 7 or
11 of this title, and only against a person, except a farmer,
family farmer, or a corporation that is not a moneyed, business, or
commercial corporation, that may be a debtor under the chapter
under which such case is commenced.
(b) An involuntary case against a person is commenced by the
filing with the bankruptcy court of a petition under chapter 7 or
11 of this title -
(1) by three or more entities, each of which is either a holder
of a claim against such person that is not contingent as to
liability or the subject of a bona fide dispute, or an indenture
trustee representing such a holder, if such claims aggregate at
least $10,000 more than the value of any lien on property of the
debtor securing such claims held by the holders of such claims;
(2) if there are fewer than 12 such holders, excluding any
employee or insider of such person and any transferee of a
transfer that is voidable under section 544, 545, 547, 548, 549,
or 724(a) of this title, by one or more of such holders that hold
in the aggregate at least $10,000 of such claims;
(3) if such person is a partnership -
(A) by fewer than all of the general partners in such
partnership; or
(B) if relief has been ordered under this title with respect
to all of the general partners in such partnership, by a
general partner in such partnership, the trustee of such a
general partner, or a holder of a claim against such
partnership; or
(4) by a foreign representative of the estate in a foreign
proceeding concerning such person.
(c) After the filing of a petition under this section but before
the case is dismissed or relief is ordered, a creditor holding an
unsecured claim that is not contingent, other than a creditor
filing under subsection (b) of this section, may join in the
petition with the same effect as if such joining creditor were a
petitioning creditor under subsection (b) of this section.
(d) The debtor, or a general partner in a partnership debtor that
did not join in the petition, may file an answer to a petition
under this section.
(e) After notice and a hearing, and for cause, the court may
require the petitioners under this section to file a bond to
indemnify the debtor for such amounts as the court may later allow
under subsection (i) of this section.
(f) Notwithstanding section 363 of this title, except to the
extent that the court orders otherwise, and until an order for
relief in the case, any business of the debtor may continue to
operate, and the debtor may continue to use, acquire, or dispose of
property as if an involuntary case concerning the debtor had not
been commenced.
(g) At any time after the commencement of an involuntary case
under chapter 7 of this title but before an order for relief in the
case, the court, on request of a party in interest, after notice to
the debtor and a hearing, and if necessary to preserve the property
of the estate or to prevent loss to the estate, may order the
United States trustee to appoint an interim trustee under section
701 of this title to take possession of the property of the estate
and to operate any business of the debtor. Before an order for
relief, the debtor may regain possession of property in the
possession of a trustee ordered appointed under this subsection if
the debtor files such bond as the court requires, conditioned on
the debtor's accounting for and delivering to the trustee, if there
is an order for relief in the case, such property, or the value, as
of the date the debtor regains possession, of such property.
(h) If the petition is not timely controverted, the court shall
order relief against the debtor in an involuntary case under the
chapter under which the petition was filed. Otherwise, after trial,
the court shall order relief against the debtor in an involuntary
case under the chapter under which the petition was filed, only if
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(1) the debtor is generally not paying such debtor's debts as
such debts become due unless such debts are the subject of a bona
fide dispute; or
(2) within 120 days before the date of the filing of the
petition, a custodian, other than a trustee, receiver, or agent
appointed or authorized to take charge of less than substantially
all of the property of the debtor for the purpose of enforcing a
lien against such property, was appointed or took possession.
(i) If the court dismisses a petition under this section other
than on consent of all petitioners and the debtor, and if the
debtor does not waive the right to judgment under this subsection,
the court may grant judgment -
(1) against the petitioners and in favor of the debtor for -
(A) costs; or
(B) a reasonable attorney's fee; or
(2) against any petitioner that filed the petition in bad
faith, for -
(A) any damages proximately caused by such filing; or
(B) punitive damages.
(j) Only after notice to all creditors and a hearing may the
court dismiss a petition filed under this section -
(1) on the motion of a petitioner;
(2) on consent of all petitioners and the debtor; or
(3) for want of prosecution.
(k) Notwithstanding subsection (a) of this section, an
involuntary case may be commenced against a foreign bank that is
not engaged in such business in the United States only under
chapter 7 of this title and only if a foreign proceeding concerning
such bank is pending.
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