11 U.S.C. § 542 — Turnover of property to the estate
submitted 48 years ago by Pub. L. 95-598 to r/title-11-BANKRUPTCY · 393 words · no verdicts yet
People or entities holding property or debts belonging to a bankruptcy estate generally must turn them over to the trustee, subject to listed exceptions. The section also protects certain good-faith transfers made without knowledge of the case, permits automatic life-insurance transactions, and allows the court to order disclosure of records.
(a) Unless subsection (c) or (d) provides otherwise, an entity* other than a custodian* that, during the case, possesses, holds, or controls property that the trustee may use, sell, or lease under section 363, or that the debtor* may exempt under section 522, must deliver the property—or its value—to the trustee and account for it. This does not apply if the property has no significant value or benefit to the estate.
(b) Unless subsection (c) or (d) provides otherwise, an entity that owes a debt* belonging to the estate must pay it to the trustee or as the trustee orders if the debt is due, payable on demand, or payable on order. This duty does not cover the part that may be offset under section 553 against a claim* against the debtor.
(c) Except as provided in section 362(a)(7), an entity that has neither actual notice nor actual knowledge that the debtor's case began may, in good faith, transfer* estate property or pay a debt owed to the debtor to someone other than the trustee, as long as it does not do so in the way described in subsection (d). The transfer or payment has the same effect for that entity as it would have had if the bankruptcy case had not begun.
(d) A life insurance company may, in good faith, transfer estate property or the debtor's property to itself with the same effect as if the case had not begun. This is allowed when the transfer pays a premium or carries out a nonforfeiture insurance option, is required to happen automatically, and is required by a life insurance contract with that company entered into before the petition was filed and belonging to the estate.
(e) After notice and a hearing, and subject to any applicable privilege, the court may order an attorney*, accountant*, or other person holding recorded information about the debtor's property or financial affairs to turn it over or disclose it to the trustee. Recorded information includes books, documents, records, and papers.
Except as provided in subsection (c) or (d) of this section, an entity*, other than a custodian*, in possession, custody, or control, during the case, of property that the trustee may use, sell, or lease under section 363 of this title, or that the debtor* may exempt under section 522 of this title, shall deliver to the trustee, and account for, such property or the value of such property, unless such property is of inconsequential value or benefit to the estate.
Except as provided in subsection (c) or (d) of this section, an entity that owes a debt* that is property of the estate and that is matured, payable on demand, or payable on order, shall pay such debt to, or on the order of, the trustee, except to the extent that such debt may be offset under section 553 of this title against a claim* against the debtor.
Except as provided in section 362(a)(7) of this title, an entity that has neither actual notice nor actual knowledge of the commencement of the case concerning the debtor may transfer* property of the estate, or pay a debt owing to the debtor, in good faith and other than in the manner specified in subsection (d) of this section, to an entity other than the trustee, with the same effect as to the entity making such transfer or payment as if the case under this title concerning the debtor had not been commenced.
A life insurance company may transfer property of the estate or property of the debtor to such company in good faith, with the same effect with respect to such company as if the case under this title concerning the debtor had not been commenced, if such transfer is to pay a premium or to carry out a nonforfeiture insurance option, and is required to be made automatically, under a life insurance contract with such company that was entered into before the date of the filing of the petition and that is property of the estate.
Subject to any applicable privilege, after notice and a hearing, the court may order an attorney*, accountant*, or other person that holds recorded information, including books, documents, records, and papers, relating to the debtor’s property or financial affairs, to turn over or disclose such recorded information to the trustee.
Source credit: (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2595; Pub. L. 98–353, title III, § 457, July 10, 1984, 98 Stat. 376; Pub. L. 103–394, title V, § 501(d)(16), Oct. 22, 1994, 108 Stat. 4146.)
- 1978Enacted · Pub. L. 95-598 · 92 Stat. 2595
- 1984Amended · Pub. L. 98-353 · 98 Stat. 376
- 1994Amended · Pub. L. 103-394 · 108 Stat. 4146
A history note hasn’t been published yet. The record shows enactment by Pub. L. 95-598 on 1978-11-06.
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