[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1861 Introduced in Senate (IS)]
113th CONGRESS
1st Session
S. 1861
To save taxpayer money and end bailouts of financial institutions by
providing for a process to allow financial institutions to go bankrupt.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 19, 2013
Mr. Cornyn (for himself and Mr. Toomey) introduced the following bill;
which was read twice and referred to the Committee on the Judiciary
_______________________________________________________________________
A BILL
To save taxpayer money and end bailouts of financial institutions by
providing for a process to allow financial institutions to go bankrupt.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Taxpayer Protection and Responsible
Resolution Act''.
SEC. 2. REPEAL OF TITLE II OF DODD-FRANK WALL STREET REFORM AND
CONSUMER PROTECTION ACT.
(a) In General.--Title II of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (Public Law 111-203) is repealed and any
Federal law amended by such title shall, on and after the date of
enactment of this Act, be effective as if title II of the Dodd-Frank
Wall Street Reform and Consumer Protection Act had not been enacted.
(b) Conforming Amendments.--
(1) Dodd-frank wall street reform and consumer protection
act.--The Dodd-Frank Wall Street Reform and Consumer Protection
Act is amended--
(A) in the table of contents, by striking all items
relating to title II;
(B) in section 165(d)(6), by striking ``, a
receiver appointed under title II,'';
(C) in section 716(g), by striking ``or a covered
financial company under title II'';
(D) in section 1105(e)(5), by striking ``amount of
any securities issued under that chapter 31 for such
purpose shall be treated in the same manner as
securities issued under section 208(n)(5)(E)'' and
inserting ``issuances of such securities under that
chapter 31 for such purpose shall by treated as public
debt transactions of the United States, and the
proceeds from the sale of any obligations acquired by
the Secretary under this paragraph shall be deposited
into the Treasury of the United States as miscellaneous
receipts''; and
(E) in section 1106(c)(2)(A)--
(i) in clause (i), by inserting ``, other
than a covered financial corporation (as
defined in section 101(9A) of title 11, United
States Code),'' after ``company''; and
(ii) in clause (ii), by inserting ``, other
than a covered financial corporation (as
defined in section 101(9A) of title 11, United
States Code),'' after ``company''.
(2) Federal deposit insurance act.--Section 10(b)(3)(A) of
the Federal Deposit Insurance Act (12 U.S.C. 1820(b)(3)(A)) is
amended by striking ``, or of such nonbank financial company
supervised by the Board of Governors or bank holding company
described in section 165(a) of the Financial Stability Act of
2010, for the purpose of implementing its authority to provide
for orderly liquidation of any such company under title II of
that Act''.
(3) Federal reserve act.--Section 13(3) of the Federal
Reserve Act (12 U.S.C. 343(3)) is amended--
(A) in subparagraph (B)--
(i) in clause (ii), by striking ``,
resolution under title II of the Dodd-Frank
Wall Street Reform and Consumer Protection Act,
or'' and inserting ``or is subject to
resolution under''; and
(ii) in clause (iii), by striking ``,
resolution under title II of the Dodd-Frank
Wall Street Reform and Consumer Protection Act,
or'' and inserting ``or resolution under''; and
(B) by striking subparagraph (E).
SEC. 3. GENERAL PROVISIONS RELATING TO COVERED FINANCIAL CORPORATIONS.
(a) Definition.--Section 101 of title 11, United States Code, is
amended by inserting the following after paragraph (9):
``(9A) The term `covered financial corporation' means any
corporation incorporated or organized under any Federal or
State law, other than a stockbroker, a commodity broker, or an
entity of the kind specified in paragraph (2) or (3) of section
109(b), that is--
``(A) a bank holding company, as that term is
defined in section 2(a) of the Bank Holding Company Act
of 1956 (12 U.S.C. 1841(a)); or
``(B) predominantly engaged in activities that the
Board of Governors of the Federal Reserve System has
determined are financial in nature or incidental to
such financial activity for purposes of section 4(k) of
the Bank Holding Company Act of 1956 (12 U.S.C.
1843(k)).''.
(b) Applicability of Chapters.--Section 103 of title 11, United
States Code, is amended--
(1) in subsection (a)--
(A) by striking ``section 1161'' and inserting
``sections 1161 and 1401''; and
(B) by striking ``or 13'' and inserting ``13, or
14''; and
(2) by adding at the end the following:
``(l) Chapter 14 of this title applies only in a case under this
title concerning a covered financial corporation.
``(m) Except as otherwise provided in chapter 14 of this title,
chapter 11 of this title applies in a case under chapter 14 of this
title.''.
(c) Who May Be a Debtor.--Section 109 of title 11, United States
Code, is amended--
(1) in subsection (b)--
(A) in paragraph (2), by striking ``or'' at the
end;
(B) in paragraph (3)(B), by striking the period at
the end and inserting ``; or''; and
(C) by adding at the end the following:
``(4) a covered financial corporation.''; and
(2) by adding at the end the following:
``(i) An entity may be a debtor under chapter 14 of this title only
if the entity is a covered financial corporation.''.
SEC. 4. LIQUIDATION, REORGANIZATION, OR RECAPITALIZATION OF A COVERED
FINANCIAL CORPORATION.
(a) In General.--Title 11, United States Code, is amended by
inserting before chapter 15 the following:
``CHAPTER 14--LIQUIDATION, REORGANIZATION, OR RECAPITALIZATION OF A
COVERED FINANCIAL CORPORATION
``Sec.
``1401. Inapplicability of other sections.
``1402. Definitions for this chapter.
``1403. Commencement of a case concerning a covered financial
corporation.
``1404. Regulators.
``1405. Special trustee and bridge company.
``1406. Special transfer of property of the estate.
``1407. Automatic stay; assumed debt.
``1408. Treatment of qualified financial contracts and affiliate
contracts.
``1409. Licenses, permits, and registrations.
``1410. Exemption from securities laws.
``1411. Inapplicability of certain avoiding powers.
``Sec. 1401. Inapplicability of other sections
``Sections 321(c) and 322(b) do not apply in a case under this
chapter.
``Sec. 1402. Definitions for this chapter
``In this chapter, the following definitions shall apply:
``(1) The term `Board' means the Board of Governors of the
Federal Reserve System.
``(2) The term `bridge company' means a newly formed
corporation the equity securities of which are transferred to a
special trustee under section 1405(a).
``(3) The term `capital structure debt' means debt, other
than a qualified financial contract, of the debtor for borrowed
money with an original maturity of at least 1 year.
``(4) The term `contractual right' means a contractual
right as defined in section 555, 556, 559, or 560.
``(5) The term `qualified financial contract' means any
contract of a kind specified in paragraph (25), (38A), (47), or
(53B) of section 101, section 741(7), or paragraph (4), (5),
(11), or (13) of section 761.
``Sec. 1403. Commencement of a case concerning a covered financial
corporation
``(a) A case under this chapter may be commenced by the filing of a
petition with the bankruptcy court--
``(1) under section 301; or
``(2) by the Board, only if--
``(A) the Board certifies in the petition that it
has determined that--
``(i) the covered financial corporation--
``(I) has incurred losses that will
deplete all or substantially all of the
capital of the covered financial
corporation, and there is no reasonable
prospect for the covered financial
corporation to avoid such depletion;
``(II) is insolvent;
``(III) is not paying or is unable
to pay the debts of the covered
financial corporation (other than debts
subject to a bona fide dispute as to
liability or amount) as they become
due; or
``(IV) is likely to be in a
financial condition specified in
subclause (I), (II), or (III)
sufficiently soon such that the
immediate commencement of a case under
this chapter concerning the covered
financial corporation is necessary to
prevent imminent substantial harm to
financial stability in the United
States; and
``(ii) the commencement of a case under
this chapter concerning the covered financial
corporation and the effect of a transfer under
section 1406 is necessary to prevent imminent
substantial harm to financial stability in the
United States; and
``(B) the bankruptcy court determines, after a
hearing described in subsection (b), that the Board has
shown by a preponderance of the evidence that the
requirements under subparagraph (A) have been
satisfied.
``(b)(1) A hearing described in this subsection is a hearing held
not later than 12 hours after the Board makes a certification under
subsection (a)(2)(A), with notice only to--
``(A) the covered financial corporation;
``(B) the Federal Deposit Insurance Corporation; and
``(C) the Secretary of the Treasury.
``(2) Only the Board and the entities listed in paragraph (1) may
attend or participate in a hearing described in this subsection.
Transcripts of such hearing shall be sealed until the end of the case.
``(c)(1) The covered financial corporation may file an appeal in
the district court of a determination made by the bankruptcy court
under subsection (a)(2)(B) not later than 12 hours after the bankruptcy
court makes such determination, with notice only to the entities listed
in subsection (b)(1) and the Board.
``(2) The district judge specified under section 298(c)(1) of title
28 for the judicial circuit in which the case is pending shall hear the
appeal under paragraph (1) and review within 12 hours the determination
of the bankruptcy court under subsection (a)(2)(B) for abuse of
discretion.
``(d)(1) The commencement of a case under subsection (a)(1)
constitutes an order for relief under this chapter.
``(2) In a case commenced under subsection (a)(2), the bankruptcy
court shall immediately order relief under this chapter if--
``(A) the bankruptcy court makes a determination under
subsection (a)(2)(B) that the requirements of subsection
(a)(2)(A) have been satisfied; and
``(B)(i) the period for appeal under subsection (c)(1) has
passed without an appeal having been filed; or
``(ii) the district court affirms the determination of the
bankruptcy court under subsection (c)(2).
``(3) Notwithstanding paragraph (2), the bankruptcy court shall
order relief in a case commenced under subsection (a)(2) if the debtor
consents to the order.
``Sec. 1404. Regulators
``(a) The Board may raise and may appear and be heard on any issue
in any case or proceeding under this title relevant to the regulation
of the debtor by the Board or to financial stability in the United
States.
``(b) The Federal Deposit Insurance Corporation may raise and may
appear and be heard on any issue in any case or proceeding under this
title in connection with a transfer under section 1406.
``Sec. 1405. Special trustee and bridge company
``(a) On request of the trustee or the Board, the court may order
the trustee to appoint 1 special trustee and transfer to the special
trustee all of the equity securities in a corporation to hold in trust
for the sole benefit of the estate, if--
``(1) the corporation does not have any property, executory
contracts, unexpired leases, or debts, other than any property
acquired or executory contracts, unexpired leases, or debts
assumed when acting as a transferee of a transfer under section
1406;
``(2) the equity securities of the corporation are property
of the estate; and
``(3) the court approves--
``(A) the trust agreement governing the special
trustee;
``(B) the governing documents of the corporation;
and
``(C) the identity of--
``(i) the special trustee; and
``(ii) the directors and senior officers of
the corporation.
``(b) The trust agreement governing the special trustee shall
provide--
``(1) for the payment of the costs and expenses of the
special trustee from the assets of the trust and not from the
property of the estate;
``(2) that the special trustee provide--
``(A) periodic reporting to the estate; and
``(B) information about the bridge company as
reasonably requested by a party in interest to prepare
a disclosure statement for a plan providing for
distribution of any securities of the bridge company,
if such information is necessary to prepare such
disclosure statement;
``(3) that the special trustee provide notice to and
consult with parties in interest in the case in connection
with--
``(A) any change in a director or senior officer of
the bridge company;
``(B) any modification to the governing documents
of the bridge company; and
``(C) any major corporate action of the bridge
company, including--
``(i) recapitalization;
``(ii) a liquidity borrowing;
``(iii) termination of an intercompany debt
or guarantee;
``(iv) a transfer of a substantial portion
of the assets of the bridge company; or
``(v) the issuance or sale of any
securities of the bridge company;
``(4) that the proceeds of the sale of any equity
securities of the bridge company by the special trustee be held
in trust for the benefit of or transferred to the estate; and
``(5) that the property held in trust by the special
trustee is subject to distribution in accordance with the plan
and subsection (c).
``(c) The special trustee shall distribute the assets held in trust
in accordance with the plan on the effective date of the plan, after
which time the office of the special trustee shall terminate, except as
may be necessary to wind up and conclude the business and financial
affairs of the trust.
``(d) After a transfer under section 1406, the special trustee
shall be subject only to applicable nonbankruptcy law, and the actions
and conduct of the special trustee shall no longer be subject to
approval by the court in the case under this chapter.
``Sec. 1406. Special transfer of property of the estate
``(a) On request of the trustee or the Board, and after notice and
hearing and not less than 24 hours after the commencement of the case,
the court may order a transfer under this section of property of the
estate to a bridge company. Except as provided under this section, the
provisions of section 363 shall apply to a transfer under this section.
``(b) Unless the court orders otherwise, notice of a request for an
order under subsection (a) shall consist of electronic or telephonic
notice of not less than 24 hours to--
``(1) the debtor;
``(2) the trustee;
``(3) the holders of the 20 largest secured claims against
the debtor;
``(4) the holders of the 20 largest unsecured claims
against the debtor;
``(5) the Board;
``(6) the Federal Deposit Insurance Corporation;
``(7) the Secretary of the Treasury;
``(8) the United States trustee; and
``(9) each primary financial regulatory agency, as defined
in section 2(12) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (12 U.S.C. 5301(12)), with respect to
any affiliate that is proposed to be transferred under this
section.
``(c) The court may not order a transfer under this section unless
the court determines, based upon a preponderance of the evidence,
that--
``(1) the transfer under this section is necessary to
prevent imminent substantial harm to financial stability in the
United States;
``(2) the proposed transfer does not provide for the
assumption of any capital structure debt by the bridge company;
``(3) the proposed transfer provides for the transfer of
any accounts of depositors of the debtor that are insured by
the Federal Deposit Insurance Company to the bridge company;
and
``(4) the Board certifies to the court that the Board has
determined that the bridge company provides adequate assurance
of future performance of any executory contract or unexpired
leased assumed and assigned to the bridge company, and of
payment of any debt assumed by the bridge company, in the
transfer under this section.
``Sec. 1407. Automatic stay; assumed debt
``(a)(1) A petition filed under section 301 or 1403 operates as a
stay, applicable to all entities, of the termination or modification of
any debt, contract, lease, or agreement described in paragraph (2), or
of any right or obligation under any such debt, contract, lease or
agreement, solely because of--
``(A) a default by the debtor under any such debt,
contract, lease, or agreement; or
``(B) a provision in such debt, contract, lease, or
agreement or in applicable nonbankruptcy law that is
conditioned on--
``(i) the insolvency or financial condition of the
debtor at any time before the closing of the case;
``(ii) the commencement of a case under this title
concerning the debtor;
``(iii) the appointment of or taking possession by
a trustee in a case under this title concerning the
debtor or by a custodian before the commencement of the
case; or
``(iv) a credit rating agency rating, or absence or
withdrawal of a credit rating agency rating--
``(I) of the debtor at any time after the
commencement of the case;
``(II) of an affiliate during the 48 hours
after the commencement of the case; or
``(III) while the special trustee is a
direct or indirect beneficial holder of more
than 50 percent of the equity securities of the
bridge company--
``(aa) of the bridge company; or
``(bb) of an affiliate, if all of
the direct or indirect interests in the
affiliate that are property of the
estate are transferred under section
1406.
``(2) A debt, contract, lease, or agreement described in this
paragraph is--
``(A) any debt (other than capital structure debt),
executory contract (other than a qualified financial contract),
or unexpired lease of the debtor;
``(B) any agreement under which the debtor issued or is
obligated for debt (other than capital structure debt);
``(C) any debt, executory contract (other than a qualified
financial contract), or unexpired lease of an affiliate; or
``(D) any agreement under which an affiliate issued or is
obligated for debt.
``(3) The stay under this subsection terminates--
``(A) as to the debtor, upon the earliest of--
``(i) 48 hours after the commencement of the case;
``(ii) assumption of the debt, contract, or lease
under an order authorizing a transfer under section
1406; or
``(iii) a determination by the court not to order a
transfer under section 1406; and
``(B) as to an affiliate, upon the earliest of--
``(i) entry of an order authorizing a transfer
under section 1406 in which the direct or indirect
interests in the affiliate that are property of the
estate are not transferred under section 1406;
``(ii) a determination by the court not to order a
transfer under section 1406; or
``(iii) 48 hours after the commencement of the
case, if the court has not ordered a transfer under
section 1406.
``(4) Sections 362(d), 362(e), 362(f), and 362(g) apply to a stay
under this subsection.
``(b) A debt, executory contract (other than a qualified financial
contract), or unexpired lease of the debtor, or an agreement under
which the debtor has issued or is obligated for any debt, may be
assumed by a bridge company in a transfer under section 1406
notwithstanding any provision in an agreement or in applicable
nonbankruptcy law that--
``(1) prohibits, restricts, or conditions the assignment of
the debt, contract, lease, or agreement; or
``(2) terminates or modifies, or permits a party other than
the debtor to terminate or modify, the debt, contract, lease,
or agreement on account of--
``(A) the assignment of the debt, contract, lease,
or agreement; or
``(B) a change in control of any party to the debt,
contract, lease, or agreement.
``(c)(1) A debt, contract, lease, or agreement of the kind
described in subsection (a)(2)(A) or (a)(2)(B) may not be terminated or
modified, and any right or obligation under such debt, contract, lease,
or agreement may not be terminated or modified, as to the bridge
company solely because of a provision in the debt, contract, lease, or
agreement or in applicable nonbankruptcy law--
``(A) of the kind described in subsection (a)(1)(B) as
applied to the debtor;
``(B) that prohibits, restricts, or conditions the
assignment of the debt, contract, lease, or agreement; or
``(C) that terminates or modifies, or permits a party other
than the debtor to terminate or modify, the debt, contract,
lease or agreement, on account of--
``(i) the assignment of the debt, contract, lease,
or agreement; or
``(ii) a change in control of any party to the
debt, contract, lease, or agreement.
``(2) If there has been a default by the debtor of a provision
other than the kind described in paragraph (1) in a debt, contract,
lease or agreement of the kind described in subsection (a)(2)(A) or
(a)(2)(B), the bridge company may assume such debt, contract, lease, or
agreement only if the bridge company--
``(A) cures, or provides adequate assurance to the court in
connection with a transfer under section 1406 that the bridge
company will promptly cure, the default;
``(B) compensates, or provides adequate assurance to the
court in connection with a transfer under section 1406 that the
bridge company will promptly compensate, a party other than the
debtor to the debt, contract, lease, or agreement, for any
actual pecuniary loss to the party resulting from the default;
and
``(C) provides adequate assurance to the court in
connection with a transfer under section 1406 of future
performance under the debt, contract, lease, or agreement.
``Sec. 1408. Treatment of qualified financial contracts and affiliate
contracts
``(a) Notwithstanding sections 362(b)(6), 362(b)(7), 362(b)(17),
362(b)(27), 555, 556, 559, 560, and 561, a petition filed under section
301 or 1403 operates as a stay, during the period specified in section
1407(a)(3)(A), applicable to all entities, of the exercise of a
contractual right--
``(1) to cause the liquidation or termination of a
qualified financial contract of the debtor or an affiliate; or
``(2) to offset or net out any termination value, payment
amount, or other transfer obligation arising under or in
connection with a qualified financial contract of the debtor or
an affiliate; or
``(3) under any security agreement or arrangement or other
credit enhancement forming a part of or related to a qualified
financial contract of the debtor or an affiliate.
``(b)(1) During the period specified in section 1407(a)(3)(A), the
trustee or the affiliate shall perform all payment and delivery
obligations under a qualified financial contract of the debtor or the
affiliate, respectively, that become due after the commencement of the
case. The stay provided under subsection (a) terminates as to a
qualified financial contract of the debtor or an affiliate immediately
upon the failure of the trustee or the affiliate, respectively, to
perform any such obligation during such period.
``(2) A counterparty to any qualified financial contract of the
debtor that is assumed and assigned in a transfer under section 1406
may perform any unperformed payment or delivery obligation under the
qualified financial contract promptly after the assumption and
assignment with the same effect as if the counterparty had timely
performed such obligations.
``(c) A qualified financial contract between an entity and the
debtor may not be assigned to or assumed by the bridge company in a
transfer under section 1406 unless--
``(1) all qualified financial contracts between the entity
and the debtor are assigned to and assumed by the bridge
company in the transfer under section 1406;
``(2) all claims of the entity against the debtor under any
qualified financial contract between the entity and the debtor
(other than any claim that, under the terms of the qualified
financial contract, is subordinated to the claims of general
unsecured creditors) are assigned to and assumed by the bridge
company;
``(3) all claims of the debtor against the entity under any
qualified financial contract between the entity and the debtor
are assigned to and assumed by the bridge company; and
``(4) all property securing or any other credit enhancement
furnished by the debtor for any qualified financial contract
described in paragraph (1) or any claim described in paragraph
(2) or (3) under any qualified financial contract between the
entity and the debtor is assigned to and assumed by the bridge
company.
``(d) Section 365(b)(1) does not apply to a default under a
qualified financial contract of the debtor that is assumed and assigned
in a transfer under section 1406 if the default--
``(1) is a breach of a provision of the kind specified in
section 1407(a)(1)(B)(iv); and
``(2) in the case of a breach of a provision of the kind
specified in section 1407(a)(1)(B)(iv)(III), occurs while the
bridge company is a direct or indirect beneficial holder of
more than 50 percent of the equity securities of the affiliate.
``(e) Notwithstanding any provision in a qualified financial
contract or in applicable nonbankruptcy law, a qualified financial
contract of the debtor that is assumed or assigned in a transfer under
section 1406 may not be terminated or modified, and any right or
obligation under the qualified financial contract may not be terminated
or modified, for a breach of a provision of the kind specified in
section 1407(b) at any time after the entry of an order under section
1406 until such time as the special trustee is no longer the direct or
indirect beneficial holder of more than 50 percent of the equity
securities of the bridge company.
``(f) Notwithstanding any provision in any agreement or in
applicable nonbankruptcy law, an agreement of an affiliate (including
an executory contract, unexpired lease, or agreement under which the
affiliate issued or is obligated for debt), and any right or obligation
under such agreement, may not be terminated or modified at any time
after the commencement of the case solely because of a condition
described in section 1407(b) if--
``(1) all direct or indirect interests in the affiliate
that are property of the estate are transferred under section
1406 to the bridge company within the period specified in
subsection (a);
``(2) the bridge company assumes--
``(A) any guarantee or other credit enhancement
issued by the debtor relating to the agreement of the
affiliate; and
``(B) any right of setoff, netting arrangement, or
debt of the debtor that directly arises out of or
directly relates to the guarantee or credit
enhancement; and
``(3) any property of the estate that directly serves as
collateral for the guarantee or credit enhancement is
transferred to the bridge company.
``Sec. 1409. Licenses, permits, and registrations
``(a) Notwithstanding any otherwise applicable nonbankruptcy law,
if a request is made under section 1406 for a transfer of property of
the estate, any Federal, State, or local license, permit, or
registration that the debtor or an affiliate had immediately before the
commencement of the case and that is proposed to be transferred under
section 1406 may not be terminated or modified at any time after the
request solely on account of--
``(1) the insolvency or financial condition of the debtor
at any time before the closing of the case;
``(2) the commencement of a case under this title
concerning the debtor;
``(3) the appointment of or taking possession by a trustee
in a case under this title concerning the debtor or by a
custodian before the commencement of the case; or
``(4) a transfer under section 1406.
``(b) Notwithstanding any otherwise applicable nonbankruptcy law,
any Federal, State, or local license, permit, or registration that the
debtor had immediately before the commencement of the case that is
included in a transfer under section 1406 shall vest in the bridge
company.
``Sec. 1410. Exemption from securities laws
``For purposes of section 1145, a security of the bridge company
shall be deemed to be a security of a successor to the debtor under a
plan if the court approves the disclosure statement for the plan as
providing adequate information (as defined in section 1125(a)) about
the bridge company and the security.
``Sec. 1411. Inapplicability of certain avoiding powers
``Except with respect to a capital structure debt, a transfer made
or an obligation incurred by the debtor, including any obligation
released by the debtor or the estate, to or for the benefit of an
affiliate in a transfer under section 1406, is not avoidable under
section 544, 547, 548(a)(1)(B), or 549, or under any similar
nonbankruptcy law.''.
(b) Technical and Conforming Amendment.--The table of chapters for
title 11, United States Code, is amended by inserting after the item
relating to chapter 13 the following:
``14. Liquidation, reorganization, or recapitalization of a 1401''.
covered financial corporation.
SEC. 5. AMENDMENTS TO TITLE 28, UNITED STATES CODE.
(a) Amendment to Chapter 13.--Chapter 13 of title 28, United States
Code, is amended by adding at the end the following:
``Sec. 298. Judge for a case under chapter 14 of title 11
``(a) Notwithstanding section 295, the Chief Justice of the United
States shall designate not less than 1 district judge from each circuit
to be available to hear an appeal under section 158(a) in a case under
title 11 concerning a covered financial corporation or under section
1403(c) of title 11.
``(b)(1) Notwithstanding section 295, the Chief Justice of the
United States shall designate a panel of not less than 10 bankruptcy
judges, who are experts in cases under title 11 in which a financial
institution is a debtor, to be available to hear a case under chapter
14 of title 11.
``(2) Notwithstanding section 295, a case under chapter 14 of title
11 shall be heard under section 157 by a bankruptcy judge designated
under paragraph (1), who shall be assigned to hear such case by the
chief judge of the court of appeals for the circuit embracing the
district in which the case is pending.
``(3) If the bankruptcy judge designated and assigned to hear a
case under paragraphs (1) and (2) is not assigned to the district in
which the case is pending, the bankruptcy judge shall be temporarily
assigned to the district.
``(c)(1) Notwithstanding section 295, an appeal under section
158(a) in a case under title 11 concerning a covered financial
corporation or under section 1403(c) of title 11 shall be heard by a
district judge who--
``(A) is the district judge designated under subsection (a)
from the circuit in which the case is pending;
``(B) if more than 1 district judge has been designated
under subsection (a) from the circuit in which the case is
pending, is 1 such district judge who is designated by the
chief judge of that circuit to hear the case; or
``(C) if none of the district judges designated under
subsection (a) for the circuit in which the case is pending are
immediately available, is designated under subsection (a) from
another circuit and has been designated by the Chief Justice of
the United States to hear the case.
``(2) If the district judge specified in paragraph (1) is not
assigned to the district in which the case is pending, the district
judge shall be temporarily assigned to the district.
``(d) A case under chapter 14 of title 11, and all proceedings in
the case, shall take place in the district in which the case is
pending.
``(e) In this section, the terms `covered financial corporation'
and `financial institution' have the meaning given such terms in
section 101 of title 11.''.
(b) Amendment to Section 1334.--Section 1334 of title 28, United
States Code, is amended by adding at the end the following:
``(f) This section does not grant jurisdiction to the district
courts after a transfer pursuant to an order under section 1406 of
title 11--
``(1) of any proceeding related to a special trustee
appointed, or to a bridge company formed, under section 1405 of
title 11; or
``(2) over the property held in trust by the special
trustee, the bridge company, or the property of the bridge
company.''.
(c) Technical and Conforming Amendment.--The table of sections for
chapter 13 of title 28, United States Code, is amended by adding at the
end the following:
``298. Judge for a case under chapter 14 of title 11.''.
SEC. 6. LIMITATION ON ADVANCES FROM A FEDERAL RESERVE BANK.
Section 10B(b) of the Federal Reserve Act (12 U.S.C. 347b(b)) is
amended--
(1) by redesignating paragraph (5) as paragraph (6);
(2) by inserting after paragraph (4) the following:
``(5) Limitation on advances to covered financial
corporations and bridge companies.--Notwithstanding paragraph
(2), a Federal Reserve bank may not make advances to any
covered financial corporation that is a debtor in a pending
case under chapter 14 of title 11, United States Code, or to a
bridge company, for the purpose of providing debtor-in-
possession financing pursuant to section 364 of such title.'';
and
(3) in paragraph (6), as redesignated--
(A) by redesignating subparagraphs (B) through (E)
as subparagraphs (D) through (G), respectively; and
(B) by inserting after subparagraph (A) the
following:
``(B) Bridge company.--The term `bridge company'
has the same meaning as in section 1402(2) of title 11,
United States Code.
``(C) Covered financial corporation.--The term
`covered financial corporation' has the same meaning as
in section 101(9A) of title 11, United States Code.''.
<all>