U.S. Code » Title 11 » Chapter CHAPTER 5— CREDITORS, THE DEBTOR, AND THE ESTATE › Subchapter SUBCHAPTER III— THE ESTATE

11 U.S.C. § 543

Turnover of property by a custodian

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(a) A custodian with knowledge of the commencement of a case under this title concerning the debtor may not make any disbursement from, or take any action in the administration of, property of the debtor, proceeds, product, offspring, rents, or profits of such property, or property of the estate, in the possession, custody, or control of such custodian, except such action as is necessary to preserve such property.(b) A custodian shall—(1) deliver to the trustee any property of the debtor held by or transferred to such custodian, or proceeds, product, offspring, rents, or profits of such property, that is in such custodian’s possession, custody, or control on the date that such custodian acquires knowledge of the commencement of the case; and(2) file an accounting of any property of the debtor, or proceeds, product, offspring, rents, or profits of such property, that, at any time, came into the possession, custody, or control of such custodian.(c) The court, after notice and a hearing, shall—(1) protect all entities to which a custodian has become obligated with respect to such property or proceeds, product, offspring, rents, or profits of such property;(2) provide for the payment of reasonable compensation for services rendered and costs and expenses incurred by such custodian; and(3) surcharge such custodian, other than an assignee for the benefit of the debtor’s creditors that was appointed or took possession more than 120 days before the date of the filing of the petition, for any improper or excessive disbursement, other than a disbursement that has been made in accordance with applicable law or that has been approved, after notice and a hearing, by a court of competent jurisdiction before the commencement of the case under this title.(d) After notice and hearing, the bankruptcy court—(1) may excuse compliance with subsection (a), (b), or (c) of this section if the interests of creditors and, if the debtor is not insolvent, of equity security holders would be better served by permitting a custodian to continue in possession, custody, or control of such property, and(2) shall excuse compliance with subsections (a) and (b)(1) of this section if the custodian is an assignee for the benefit of the debtor’s creditors that was appointed or took possession more than 120 days before the date of the filing of the petition, unless compliance with such subsections is necessary to prevent fraud or injustice.(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2595; Pub. L. 98–353, title III, § 458, July 10, 1984, 98 Stat. 376; Pub. L. 103–394, title V, § 501(d)(17), Oct. 22, 1994, 108 Stat. 4146.)Historical and Revision Noteslegislative statements

Section 543(a) is a modification of similar provisions contained in the House bill and the Senate amendment. The provision clarifies that a custodian may always act as is necessary to preserve property of the debtor. Section 543(c)(3) excepts from surcharge a custodian that is an assignee for the benefit of creditors, who was appointed or took possession before 120 days before the date of the filing of the petition, whichever is later. The provision also prevents a custodian from being surcharged in connection with payments made in accordance with applicable law.

senate report no. 95–989

This section requires a custodian appointed before the bankruptcy case to deliver to the trustee and to account for property that has come into his possession, custody, or control as a custodian. “Property of the debtor” in section (a) includes property that was property of the debtor at the time the custodian took the property, but the title to which passed to the custodian. The section requires the court to protect any obligations incurred by the custodian, provide for the payment of reasonable compensation for services rendered and costs and expenses incurred by the custodian, and to surcharge the custodian for any improper or excessive disbursement, unless it has been approved by a court of competent jurisdiction. Subsection (d) reinforces the general abstention policy in section 305 by permitting the bankruptcy court to authorize the custodianship to proceed notwithstanding this section.

Editorial NotesAmendments

1994—Subsec. (d)(1). Pub. L. 103–394 struck out comma after “section”.

1984—Subsec. (a). Pub. L. 98–353, § 458(a), inserted “, product, offspring, rents, or profits” after “proceeds”.

Subsec. (b)(1). Pub. L. 98–353, § 458(b)(1), inserted “held by or” after “debtor”, and “, product, offspring, rents, or profits” after “proceeds”.

Subsec. (b)(2). Pub. L. 98–353, § 458(b)(2), inserted “, product, offspring, rents, or profits” after “proceeds”.

Subsec. (c)(1). Pub. L. 98–353, § 458(c)(1), inserted “or proceeds, product, offspring, rents, or profits of such property” after “property”.

Subsec. (c)(3). Pub. L. 98–353, § 458(c)(2), inserted “that has been” before “approved”.

Subsec. (d). Pub. L. 98–353, § 458(d), designated existing provisions as par. (1) and added par. (2).

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 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 300 cases (23 in the last 5 years), 1941–2026 · leading case: In Re Constable Plaza Assocs., L.P., 125 B.R. 98 (Bankr. S.D.N.Y. 1991).
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In Re Constable Plaza Assocs., L.P., 125 B.R. 98 (Bankr. S.D.N.Y. 1991). · cites it 10× “Alternatively, Mutual seeks to continue the receiver in possession as custodian of the rents pursuant to 11 U.S.C. § 543 (d)(1). The debtor, in turn, has moved for an order under 11 U.”
In re Franklin, 476 B.R. 545 (Bankr. N.D. Ill. 2012). · cites it 15× “FINDINGS OF FACT AND CONCLUSIONS OF LAW FOLLOWING HEARING ON DEBTOR’S MOTION TO COMPEL RECEIVER UNDER 11 U.S.C. § 543 TO TURNOVER PROPERTY OF ESTATE AND WELLS FARGO’S MOTIONS TO EXCUSE COMPLIANCE WITH 11 U.”
In Re Snergy Props., Inc., 130 B.R. 700 (Bankr. S.D.N.Y. 1991). · cites it 12× “, to perform services in connection with the receiver’s turnover of the property of the estate to the debtor in possession in accordance with 11 U.S.C. § 543 , including the preparation of an application for compensation pursuant to 11 U.”
In Re 245 Assocs., LLC, 188 B.R. 743 (Bankr. S.D.N.Y. 1995). · cites it 8× “The Applicant, Steven Klein, is the state court-appointed receiver of the debtor’s real property whom we briefly continued in possession under 11 U.S.C. § 543 (d)(1). The law firm of Seiden, Stempel & Bennett (the “Firm”) represented him in connection with the receivership, but…”
In Re Petters Co., Inc., 401 B.R. 391 (Bankr. D. Minn. 2009). · cites it 5× “More to the point, if a receiver’s appointment were terminated automatically upon bankruptcy, there would be no warrant for the statutory prohibition of a receiver making post-petition disbursement from the property of the debtor, 11 U.S.C. § 543 (a), nor a need for the…”
In re Packard Square LLC, 575 B.R. 768 (Bankr. E.D. Mich. 2017). · cites it 5× “In the Turnover Motion, the Debtor seeks an order under 11 U.S.C. § 543 (b), requiring a state-court appointed receiver, who has been in place for over 10 months, to turn over all of the Debtor’s property to the Debtor, and to file an accounting of the type described in §…”
Szwak v. Earwood (In Re Bodenheimer, Jones, Szwak, & Winchell L.L.P.), 592 F.3d 664 (5th Cir. 2009). · cites it 4× “Because the bankruptcy court failed to consider how Earwood’s services and expenses met the terms of 11 U.S.C. § 543 (a) and benefitted the bankruptcy estate when determining whether they qualified as an administrative expense, we hold the award to be error and an abuse of the…”
Ohio v. Kovacs, 469 U.S. 274 (1985). · cites it 2× “11 U. S. C. § 543 . After notice and hearing, the trustee may abandon any property of the estate that is burdensome to the estate or that is of inconsequential value to the estate.”
Foust v. McNeill, 310 F.3d 849 (5th Cir. 2002). · cites it 3× “§ 101 (11), 1 making the requirements of 11 U.S.C. § 543 applicable. On appeal, however, the Fousts argue that McNeill and Thigpen failed to comply with § 543’s turnover and accounting requirements.”
French Bourekas Inc. v. Turner, 199 B.R. 807 (E.D.N.Y 1996). · cites it 10× “11 U.S.C. § 543 (b). 21 In addition, a custodian is generally prohibited from administering the property of the debtor after the filing of the bankruptcy petition.”
In re Bell, 476 B.R. 168 (Bankr. E.D. Pa. 2012). · cites it 7× “Bell (“the Debtor”) filed a Motion to Compel Custodian to Release Funds Pursuant to 11 U.S.C. § 543 (“the Debtor’s Motion”). (Doc.”
Sec. & Exch. Comm'n v. Byers, 592 F. Supp. 2d 532 (S.D.N.Y. 2008). · cites it 5× “h entities in this district, and in such cases the Receiver shall prosecute the bankruptcy petitions in accordance with title 11 subject to the same parameters and objectives as a chapter 11 trustee and shall remain in possession, custody, and control of the title 11 estates…”
Show all 300 citing cases →
— 11 U.S.C. § 543(a) — 1 case
In re Youngquist, 501 B.R. 877 (Bankr. D. Kan. 2013).
— 11 U.S.C. § 543(d)(2) — 1 case
In Re Northgate Terrace Apts., Ltd., 117 B.R. 328 (Bankr. S.D. Ohio 1990).
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.