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U.S. Code as of:
01/19/04
Section 78fff. General provisions of a liquidation proceeding
(a) Purposes
The purposes of a liquidation proceeding under this chapter shall
be -
(1) as promptly as possible after the appointment of a trustee
in such liquidation proceeding, and in accordance with the
provisions of this chapter -
(A) to deliver customer name securities to or on behalf of
the customers of the debtor entitled thereto as provided in
section 78fff-2(c)(2) of this title; and
(B) to distribute customer property and (in advance thereof
or concurrently therewith) otherwise satisfy net equity claims
of customers to the extent provided in this section;
(2) to sell or transfer offices and other productive units of
the business of the debtor;
(3) to enforce rights of subrogation as provided in this
chapter; and
(4) to liquidate the business of the debtor.
(b) Application of title 11
To the extent consistent with the provisions of this chapter, a
liquidation proceeding shall be conducted in accordance with, and
as though it were being conducted under chapters 1, 3, and 5 and
subchapters I and II of chapter 7 of title 11. For the purposes of
applying such title in carrying out this section, a reference in
such title to the date of the filing of the petition shall be
deemed to be a reference to the filing date under this chapter.
(c) Determination of customer status
In a liquidation proceeding under this chapter, whenever a person
has acted with respect to cash or securities with the debtor after
the filing date and in a manner which would have given him the
status of a customer with respect to such cash or securities had
the action occurred prior to the filing date, and the trustee is
satisfied that such action was taken by the customer in good faith
and prior to the appointment of the trustee, the date on which such
action was taken shall be deemed to be the filing date for purposes
of determining the net equity of such customer with respect to such
cash or securities.
(d) Apportionment
In a liquidation proceeding under this chapter, any cash or
securities remaining after the liquidation of a lien or pledge made
by a debtor shall be apportioned between his general estate and
customer property in the proportion in which the general property
of the debtor and the cash and securities of the customers of such
debtor contributed to such lien or pledge. Securities apportioned
to the general estate under this subsection shall be subject to the
provisions of section 78lll(5)(A) of this title.
(e) Costs and expenses of administration
All costs and expenses of administration of the estate of the
debtor and of the liquidation proceeding shall be borne by the
general estate of the debtor to the extent it is sufficient
therefor, and the priorities of distribution from the general
estate shall be as provided in section 726 of title 11. Costs and
expenses of administration shall include payments pursuant to
section 78fff-2(e) of this title and section 78fff-3(c)(1) of this
title (to the extent such payments recovered securities which were
apportioned to the general estate pursuant to subsection (d) of
this section) and costs and expenses of SIPC employees utilized by
the trustee pursuant to section 78fff-1(a)(2) of this title. All
funds advanced by SIPC to a trustee for such costs and expenses of
administration shall be recouped from the general estate under
section 507(a)(1) of title 11.
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