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11 U.S.C. § 556 — Contractual right to liquidate, terminate, or accelerate a commodities contract or forward contract

submitted 44 years ago by Pub. L. 97-222 to r/title-11-BANKRUPTCY · 226 words · no verdicts yet

in plain englishAI-generated · not legal advice

Certain commodity and forward-contract participants may exercise liquidation, termination, acceleration, and margin-payment rights despite bankruptcy proceedings. “Contractual right” includes rights in listed rules or practices.

A commodity broker, financial participant, or forward-contract merchant may exercise a contractual right to liquidate, terminate, or accelerate a commodity contract, as defined in section 761, or a forward contract because of a condition described in section 365(e)(1). A right to receive variation or maintenance margin from a trustee for open commodity or forward contracts also may not be stayed, avoided, or otherwise limited by bankruptcy law or a court order. “Contractual right” includes rights in rules, bylaws, or governing-board resolutions of the listed clearing organizations, exchanges, associations, agencies, contract markets, facilities, or boards of trade, and rights whether written or unwritten arising under common law, law merchant, or normal business practice. This section does not define the quoted terms.

the actual law source: uscode.house.gov ↗public domain

The contractual right of a commodity broker, financial participant, or forward contract merchant to cause the liquidation, termination, or acceleration of a commodity contract, as defined in section 761 of this title, or forward contract because of a condition of the kind specified in section 365(e)(1) of this title, and the right to a variation or maintenance margin payment received from a trustee with respect to open commodity contracts or forward contracts, shall not be stayed, avoided, or otherwise limited by operation of any provision of this title or by the order of a court in any proceeding under this title. As used in this section, the term “contractual right” includes a right set forth in a rule or bylaw of a derivatives clearing organization (as defined in the Commodity Exchange Act), a multilateral clearing organization (as defined in the Federal Deposit Insurance Corporation Improvement Act of 1991), a national securities exchange, a national securities association, a securities clearing agency, a contract market designated under the Commodity Exchange Act, a derivatives transaction execution facility registered under the Commodity Exchange Act, or a board of trade (as defined in the Commodity Exchange Act) or in a resolution of the governing board thereof and a right, whether or not evidenced in writing, arising under common law, under law merchant or by reason of normal business practice.

Source credit: (Added Pub. L. 97–222, § 6(a), July 27, 1982, 96 Stat. 236; amended Pub. L. 101–311, title II, § 205, June 25, 1990, 104 Stat. 270; Pub. L. 103–394, title V, § 501(b)(7), Oct. 22, 1994, 108 Stat. 4143; Pub. L. 109–8, title IX, §§ 907(h), (o)(8), Apr. 20, 2005, 119 Stat. 178, 182.)

history & why it existsrecord from the source credit
  • 1982Enacted · Pub. L. 97-222 · 96 Stat. 236
  • 1990Amended · Pub. L. 101-311 · 104 Stat. 270
  • 1994Amended · Pub. L. 103-394 · 108 Stat. 4143
  • 2005Amended · Pub. L. 109-8 · 119 Stat. 178, 182

A history note hasn’t been published yet. The record shows enactment by Pub. L. 97-222 on 1982-07-27.

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