11 U.S.C. § 345

Money of estates

Read at: OLRCuscode.house.gov CornellLII GovInfogovinfo.gov JustiaTitle 11 CasesGoogle Scholar

(a) A trustee in a case under this title may make such deposit or investment of the money of the estate for which such trustee serves as will yield the maximum reasonable net return on such money, taking into account the safety of such deposit or investment.(b) Except with respect to a deposit or investment that is insured or guaranteed by the United States or by a department, agency, or instrumentality of the United States or backed by the full faith and credit of the United States, the trustee shall require from an entity with which such money is deposited or invested—(1) a bond—(A) in favor of the United States;(B) secured by the undertaking of a corporate surety approved by the United States trustee for the district in which the case is pending; and(C) conditioned on—(i) a proper accounting for all money so deposited or invested and for any return on such money;(ii) prompt repayment of such money and return; and(iii) faithful performance of duties as a depository; or(2) the deposit of securities of the kind specified in section 9303 of title 31;unless the court for cause orders otherwise.(c) An entity with which such moneys are deposited or invested is authorized to deposit or invest such moneys as may be required under this section.(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2565; Pub. L. 97–258, § 3(c), Sept. 13, 1982, 96 Stat. 1064; Pub. L. 98–353, title III, § 437, July 10, 1984, 98 Stat. 370; Pub. L. 99–554, title II, § 214, Oct. 27, 1986, 100 Stat. 3099; Pub. L. 103–394, title II, § 210, Oct. 22, 1994, 108 Stat. 4125.)Historical and Revision Noteslegislative statements

The House amendment moves section 345(c) of the House bill to chapter 15 as part of the pilot program for the U.S. trustees. The bond required by section 345(b) may be a blanket bond posted by the financial depository sufficient to cover deposits by trustees in several cases, as is done under current law.

senate report no. 95–989

This section is a significant departure from section 61 of the Bankruptcy Act [section 101 of former title 11]. It permits a trustee in a bankruptcy case to make such deposit of investment of the money of the estate for which he serves as will yield the maximum reasonable net return on the money, taking into account the safety of such deposit or investment. Under current law, the trustee is permitted to deposit money only with banking institutions. Thus, the trustee is generally unable to secure a high rate of return on money of estates pending distribution, to the detriment of creditors. Under this section, the trustee may make deposits in savings and loans, may purchase government bonds, or make such other deposit or investment as is appropriate. Under proposed 11 U.S.C. 541(a)(6), and except as provided in subsection (c) of this section, any interest or gain realized on the deposit or investment of funds under this section will become property of the estate, and will thus enhance the recovery of creditors.

In order to protect the creditors, subsection (b) requires certain precautions against loss of the money so deposited or invested. The trustee must require from a person with which he deposits or invests money of an estate a bond in favor of the United States secured by approved corporate surety and conditioned on a proper accounting for all money deposited or invested and for any return on such money. Alternately, the trustee may require the deposit of securities of the kind specified in section 15 of title 6 of the United States Code [31 U.S.C. 9303], which governs the posting of security by banks that receive public moneys on deposit. These bonding requirements do not apply to deposits or investments that are insured or guaranteed the United States or a department, agency, or instrumentality of the United States, or that are backed by the full faith and credit of the United States.

These provisions do not address the question of aggregation of funds by a private chapter 13 trustee and are not to be construed as excluding such possibility. The Rules of Bankruptcy Procedure may provide for aggregation under appropriate circumstances and adequate safeguards in cases where there is a significant need, such as in districts in which there is a standing chapter 13 trustee. In such case, the interest or return on the funds would help defray the cost of administering the cases in which the standing trustee serves.

Editorial NotesAmendments

1994—Subsec. (b). Pub. L. 103–394 substituted semicolon for period at end of par. (2) and inserted concluding provisions after par. (2).

1986—Subsec. (b). Pub. L. 99–554 amended subsec. (b) generally, substituting “approved by the United States trustee for the district” for “approved by the court for the district” in par. (1)(B).

1984—Subsec. (c). Pub. L. 98–353 added subsec. (c).

1982—Subsec. (b)(2). Pub. L. 97–258 substituted “section 9303 of title 31” for “section 15 of title 6”.

Statutory Notes and Related SubsidiariesEffective Date of 1994 Amendment

Amendment by Pub. L. 103–394 effective Oct. 22, 1994, and not applicable with respect to cases commenced under this title before Oct. 22, 1994, see section 702 of Pub. L. 103–394, set out as a note under section 101 of this title.

Effective Date of 1986 Amendment

Effective date and applicability of amendment by Pub. L. 99–554 dependent upon the judicial district involved, see section 302(d), (e) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure.

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title.

Notes of Decisions

Cited in 47 cases (9 in the last 5 years), 1940–2025 · leading case: McLean Indus., Inc. v. Med. Lab'y Automation, Inc. (In Re McLean Indus., Inc.), 96 B.R. 440 (Bankr. S.D.N.Y. 1989).

Sort: Relevance Newest Treatment

McLean Indus., Inc. v. Med. Lab'y Automation, Inc. (In Re McLean Indus., Inc.), 96 B.R. 440 (Bankr. S.D.N.Y. 1989). · cites it 3× “§ 363 (b)(1), (ii) the expenditure of funds to exercise might not qualify under 11 U.S.C. § 345 and (iii) the Debtor has yet to assume the Agreement in which the Option is contained.”

Kalyna v. Swaine (In Re Accomazzo), 226 B.R. 426 (D. Ariz. 1998). · cites it 4× “At the hearing on the issue, the bankruptcy court relied on 11 U.S.C. § 345 (a) in holding that the permissive language found in the statute precluded the bankruptcy court from surcharging Swaine.”

United States Ex Rel. Peoples Banking Co. v. Derryberry (In Re Peckinpaugh ), 50 B.R. 865 (Bankr. N.D. Ohio 1985). · cites it 2× “The court finds that the Trustee was not required to invest estate funds under 11 U.S.C. § 345 , nor did he have a duty to rent the farms for the benefit of secured creditors.”

Bankr. L. Rep. P 70,873 in Re the Charter Co., Debtors. The Charter Co. v. The Prudential Ins. Co. of Am., 778 F.2d 617 (11th Cir. 1985). “Second, the lenders argue that the effect of the order was to allow the debtors to invest funds in nondebtor affiliates, in violation of 11 U.S.C. § 345 (1982). Finally, the lenders point out that 11 U.”

Matter of Interco Inc., 130 B.R. 301 (Bankr. E.D. Mo. 1991). · cites it 7× “Debtors seek an Order exempting them, in part, from the requirements of 11 U.S.C. § 345 (b). 2. Section 345(b) requires: Except with respect to a deposit or investment that is insured or guaranteed by the United States or by a department, agency, or instrumentality of the United…”

Judge v. Pincus, Verlin, Hahn & Reich, P.C. (In Re J & J Record Distrib. Corp.), 80 B.R. 53 (Bankr. E.D. Pa. 1987). · cites it 3× “The statutory basis of the Trustee’s case is 11 U.S.C. § 345 (a), which provides as follows: § 345.”

In Re Countrywide Home Loans, Inc., 384 B.R. 373 (Bankr. W.D. Pa. 2008). “The debtor in that case had submitted proposed investment guidelines which the bankruptcy court approved over an objection by the UST who claimed the *388 proposed guidelines were in violation of 11 U.S.C. § 345 (b). The UST appealed and the district court reversed finding that…”

The Sec. Bank of Marshalltown, Iowa, a Creditor of Robert v. Brown & Sue A. Brown, Debtors v. Donald F. Neiman, 1 F.3d 687 (8th Cir. 1993). “In addition, the trustee is authorized to deposit or invest money of the estate pursuant to 11 U.S.C. § 345 , and 11 U.S.C. § 347 (a) provides that the trustee shall stop payment on any unpaid *691 cheeks 90 days after the final distribution and the remaining property of the…”

In Re Clouse, 446 B.R. 690 (Bankr. E.D. Pa. 2010). “” 11 U.S.C. §§ 345 (a), 347(a), 704(a), and 1302(b) & (c).”

In Re Edgar & Beulah H. Ballard, Debtors. Jeffrey Fairfield, Tr. v. United States of Am., Commonwealth of Virginia, 65 F.3d 367 (4th Cir. 1995). “as will yield the maximum reasonable net return on such money_” 11 U.S.C. § 345 . Debtors-in-possession, in the performance of their administrative duties, may do the same.”

Fritz Fire Prot. Co. v. Wei-Fung Chang (In Re Wei-Fung Chang), 438 B.R. 77 (Bankr. M.D. Penn. 2010). “The numerous duties imposed upon the Chapter 13 trustee following the confirmation of a plan strongly suggest that the estate does not terminate at confirmation. Between these two extremes lie several approaches in which courts have attempted to reconcile the vesting provision…”

In Re TM Carlton House Partners, Ltd., 91 B.R. 349 (Bankr. E.D. Pa. 1988). “We learned for the first time, at that hearing, that the apparent agreement of April 28, 1988, had never been reduced to writing because one of the conditions required the Defendant to deposit all of its real estate tax escrow accounts with Skokie, and the United States Trustee…”

Show all 47 citing cases →

Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.