11 U.S.C. § 544

Trustee as lien creditor and as successor to certain creditors and purchasers

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(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.(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.)Historical and Revision Noteslegislative statements

Section 544(a)(3) modifies similar provisions contained in the House bill and Senate amendment so as not to require a creditor to perform the impossible in order to perfect his interest. Both the lien creditor test in section 544(a)(1), and the bona fide purchaser test in section 544(a)(3) should not require a transferee to perfect a transfer against an entity with respect to which applicable law does not permit perfection. The avoiding powers under section 544(a)(1), (2), and (3) are new. In particular, section 544(a)(1) overrules Pacific Finance Corp. v. Edwards, 309 F.2d 224 (9th Cir. 1962), and In re Federals, Inc., 553 F.2d 509 (6th Cir. 1977), insofar as those cases held that the trustee did not have the status of a creditor who extended credit immediately prior to the commencement of the case.

The House amendment deletes section 544(c) of the House bill.

senate report no. 95–989

Subsection (a) is the “strong arm clause” of current law, now found in Bankruptcy Act § 70c [section 110(c) of former title 11]. It gives the trustee the rights of a creditor on a simple contract with a judicial lien on the property of the debtor as of the date of the petition; of a creditor with a writ of execution against the property of the debtor unsatisfied as of the date of the petition; and a bona fide purchaser of the real property of the debtor as of the date of the petition. “Simple contract” as used here is derived from Bankruptcy Act § 60a(4) [section 96(a)(4) of former title 11]. The third status, that of a bona fide purchaser of real property, is new.

Subsection (b) is derived from current section 70e [section 110(e) of former title 11]. It gives the trustee the rights of actual unsecured creditors under applicable law to void transfers. It follows Moore v. Bay, 284 U.S. 4 (1931), and overrules those cases that hold section 70e gives the trustee the rights of secured creditors.

Editorial NotesAmendments

1998—Subsec. (b). Pub. L. 105–183 designated existing provisions as par. (1), substituted “Except as provided in paragraph (2), the trustee” for “The trustee”, and added par. (2).

1984—Subsec. (a)(1). Pub. L. 98–353, § 459(1), inserted “such” after “obtained”.

Subsec. (a)(2). Pub. L. 98–353, § 459(2), substituted “; or” for “; and”.

Subsec. (a)(3). Pub. L. 98–353, § 459(3), inserted “, other than fixtures,” after “property”, and “and has perfected such transfer” after “purchaser” the second place it appeared.

Statutory Notes and Related SubsidiariesEffective Date of 1998 Amendment

Pub. L. 105–183, § 5, June 19, 1998, 112 Stat. 518, provided that: “This Act [amending this section and sections 546, 548, 707, and 1325 of this title and enacting provisions set out as notes under this section and section 101 of this title] and the amendments made by this Act shall apply to any case brought under an applicable provision of title 11, United States Code, that is pending or commenced on or after the date of enactment of this Act [June 19, 1998].”

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.

Construction of 1998 Amendment

Pub. L. 105–183, § 6, June 19, 1998, 112 Stat. 519, provided that: “Nothing in the amendments made by this Act [amending this section and sections 546, 548, 707, and 1325 of this title] is intended to limit the applicability of the Religious Freedom Restoration Act of 1993 (42 U.S.C. 2002bb [2000bb] et seq.).”

Notes of Decisions

Cited in 5,074 cases (513 in the last 5 years), 1938–2026 · leading case: Official Committee of Unsecured Creditors Ex Rel. Bankruptcy Estate of Felt Manufacturing Co. v. Foss (In Re Felt Manufa

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Official Committee of Unsecured Creditors Ex Rel. Bankruptcy Estate of Felt Manufacturing Co. v. Foss (In Re Felt Manufa (2007) nhb · cites it 40× “Avoidable Transfer Counts The complaint contains numerous counts seeking to avoid various transfers to or on behalf of various defendants as being preferential and/or fraudulent under 11 U.S.C. §§ 544 , 547, and 548, and applicable state law as set forth in NH RSA 545-A:4(I)(b),…”

Manning v. Wallace (In Re First Financial Associates, Inc.) (2007) innb · cites it 32× “11 U.S.C. § 544 (b)(1): a. Under §§14 and 15 of the Indiana Uniform Fraudulent Transfers Act; *887 b.”

Finkel v. Polichuk (In re Polichuk) (2014) paeb · cites it 15× “6 The second is the Code’s *417 transfer avoidance provision which allows the bankruptcy trustee to stand in the shoes of an actual creditor who may avoid a transfer under applicable nonbankruptcy law, 11 U.S.C. § 544 (b). 7 With respect to the § 544(b) claim, the Trustee…”

Ransier v. Standard Federal Bank, FSG (In Re Collins) (2003) ohsb · cites it 18× “In the adversary proceeding, Trustee alleged that the Standard Federal mortgage was not witnessed nor acknowledged in conformity with the laws of the State of Ohio.”

Life Partners Creditors' Trust v. Cowley (In Re Life Partners Holdings, Inc.) (2019) ca5 · cites it 4× “005(a)(1) through 11 U.S.C. § 544 (against all Licensees listed on Exhibit 4 of the third amended complaint).”

Reid v. Wolf (In re Wolf) (2018) ilnb · cites it 14× “See 11 U.S.C. § 544 (b). Under section 544(b), the trustee's rights are derivative not of the debtor, but rather of the debtor's creditors.”

Neilson v. Union Bank of California, N.A. (2003) cacd · cites it 6× “Imperial argues that the claim must be dismissed because Neilson has not and cannot plead facts demonstrating that the claim is timely under the applicable four-year statute of limitations.”

In Re Valley Media, Inc. (2002) deb · cites it 14× “However, the Objecting Vendors may be estopped from asserting those ownership rights under California law when claims are made against the Contested Inventory in the possession of Valley by Valley’s creditors. The Valley creditor asserting a claim against the Contested Inventory…”

Weiman v. Stopher (In Re Weiman) (1982) bap9 · cites it 30× “The claim of lien was based on 11 U.S.C. § 544 (a)(1). The order appealed provides that the trustee may enforce the lien if and when the debtors sell or refinance their exempt home.”

In Re: Pamela Knapper, F/k/a Pamela Jones, Pamela Knapper William C. Miller v. Bankers Trust Co., as Trustee for Amresco (2005) ca3 · cites it 6× “Knapper also asserts an alternative claim under 11 U.S.C. § 544 (b)(1) which she argues does not require adjudication of her constitutional claim at all.”

Watts v. MTC Development, LLC (In re Palisades at West Paces Imaging Center, LLC) (2013) ganb · cites it 15× “This matter came before the Court for trial on August 20-22, 2013 on the Trustee’s Complaint for Avoidance of Fraudulent Conveyances under 11 U.S.C. § 544 . The Court has jurisdiction of this matter pursuant to 28 U.”

Hyundai Translead, Inc. v. Jackson Truck & Trailer Repair, Inc. (In Re Trailer Source, Inc.) (2009) ca6 · cites it 8× “("Hyundai") derivative standing to bring an action on behalf of the bankruptcy estate to recover certain assets that Hyundai alleges were fraudulently transferred from the debtor Trailer Source, Inc.”

Show all 5,074 citing cases →

— 11 U.S.C. § 544(1) — 1 case

Michael A. Luedke and Patricia G. Luedke (2020) wieb

— 11 U.S.C. § 544(a) — 14 cases

In Re Prichard Plaza Associates Ltd. Partnership (1988) mab

Bruce v. RepublicBank-South Austin (In Re Bruce) (1989) txwb

Hitachi Denshi America, Ltd. v. Rozel Industries, Inc. (In Re Rozel Industries, Inc) (1987) ilnb

Wellington Apartment, LLC v. Clotworthy (In Re Wellington Apartment, LLC) (2006) vaeb

Mosello v. Ali, Inc. (In Re Mosello) (1996) nysd

— 11 U.S.C. § 544(a)(1) — 10 cases

In Re Ryan (2002) rid

Union Planters Bank, N.A. v. Burns (In Re Gaylord Grain L.L.C.) (2004) bap8

White v. Weatherford (In Re Abrass) (2001) flmb

Levine v. Weyer (In Re DotMD, LLC) (2003) gand

Kapila v. Dye (In Re Schiavone) (1997) flsb

— 11 U.S.C. § 544(a)(3) — 8 cases

Simon v. Chase Manhattan Bank (In Re Zaptocky) (1999) bap6

Stubbins v. Chase Home Finance LLC (In Re Robinson) (2008) ohsb

In Re Elrod (1984) tneb

McLean v. City of Philadelphia, Dept. of Revenue (In Re McLean) (1989) paeb

In re First Mortgage Fund, Inc. (2013) mied

— 11 U.S.C. § 544(a)(l)(1994) — 1 case

Siegel v. Boston (In Re Sale Guaranty Corp.) (1998) bap9

— 11 U.S.C. § 544(b) — 19 cases

Trenwick America Litigation Trust v. Ernst & Young, L.L.P. (2006) delch

Picard Ex Rel. Bernard L. Madoff Investment Securities LLC v. Estate of Chais (In Re Bernard L. Madoff Investment Securi (2011) nysb

Roberds, Inc. v. Broyhill Furniture (In Re Roberds, Inc.) (2004) ohsb

Gordon v. Harrison (In re Alpha Protective Services, Inc.) (2015) gamb

Brandt v. Hicks, Muse & Co. (In Re Healthco International, Inc.) (1996) mab

— 11 U.S.C. § 544(b)(1) — 6 cases

In re: Thomas C. Wettach v. (2016) ca3

PRN Real Estate & Investments, Ltd. v. William W. Cole, Jr. (2023) ca11

Bartholomew v. Avalon Capital Group, Inc. (2009) mnd

SUPERPUMPER, INC. VS. LEONARD (2021) nev

Matson v. Rescue Rangers, LLC (In re Rescue Rangers, LLC) (2017) vaeb

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