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11 U.S.C. § 544Trustee as lien creditor and as successor to certain creditors and purchasers

submitted 48 years ago by Pub. L. 95-598 to r/title-11-BANKRUPTCY · 344 words · no verdicts yet

in plain englishAI-generated · not legal advice

At the start of a bankruptcy case, the trustee is treated as having the rights of certain hypothetical lien creditors, execution creditors, and bona fide purchasers. The trustee may avoid transfers those parties could avoid and certain transfers voidable by unsecured creditors.

(a) At the beginning of the case, without regard to anyone’s knowledge, the trustee has the rights and powers of, and may avoid transfers or obligations voidable by: (1) a creditor who extended credit at that time and obtained a judicial lien on property on which a simple-contract creditor could obtain one; (2) a creditor who extended credit and obtained an execution returned unsatisfied; or (3) a bona fide purchaser from the debtor of real property other than fixtures who could perfect the transfer under applicable law and had perfected it then. Each applies whether or not such a creditor or purchaser actually exists. (b)(1) Except under paragraph (2), the trustee may avoid a transfer of the debtor’s property interest or an obligation if applicable law makes it voidable by a creditor with an allowable unsecured claim under section 502, or a claim disallowable only under section 502(e). (2) Paragraph (1) does not apply to a charitable contribution defined in section 548(d)(3) that is not covered by section 548(a)(1)(B) because of section 548(a)(2). When the case begins, any Federal- or State-law claim in Federal or State court to recover that contribution is preempted.
the actual law source: uscode.house.gov ↗public domain
(a)

The trustee shall have, as of the commencement of the case, and without regard to any knowledge of the trustee or of any creditor, the rights and powers of, or may avoid any transfer of property of the debtor or any obligation incurred by the debtor that is voidable by—

(1)

a creditor that extends credit to the debtor at the time of the commencement of the case, and that obtains, at such time and with respect to such credit, a judicial lien on all property on which a creditor on a simple contract could have obtained such a judicial lien, whether or not such a creditor exists;

(2)

a creditor that extends credit to the debtor at the time of the commencement of the case, and obtains, at such time and with respect to such credit, an execution against the debtor that is returned unsatisfied at such time, whether or not such a creditor exists; or

(3)

a bona fide purchaser of real property, other than fixtures, from the debtor, against whom applicable law permits such transfer to be perfected, that obtains the status of a bona fide purchaser and has perfected such transfer at the time of the commencement of the case, whether or not such a purchaser exists.

(b)
(1)

Except as provided in paragraph (2), the trustee may avoid any transfer of an interest of the debtor in property or any obligation incurred by the debtor that is voidable under applicable law by a creditor holding an unsecured claim that is allowable under section 502 of this title or that is not allowable only under section 502(e) of this title.

(2)

Paragraph (1) shall not apply to a transfer of a charitable contribution (as that term is defined in section 548(d)(3)) that is not covered under section 548(a)(1)(B), by reason of section 548(a)(2). Any claim by any person to recover a transferred contribution described in the preceding sentence under Federal or State law in a Federal or State court shall be preempted by the commencement of the case.

Source credit: (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2596; Pub. L. 98–353, title III, § 459, July 10, 1984, 98 Stat. 377; Pub. L. 105–183, § 3(b), June 19, 1998, 112 Stat. 518.)

history & why it existsrecord from the source credit
  • 1978Enacted · Pub. L. 95-598 · 92 Stat. 2596
  • 1984Amended · Pub. L. 98-353 · 98 Stat. 377
  • 1998Amended · Pub. L. 105-183 · 112 Stat. 518

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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