U.S. Code » Title 11 » Chapter CHAPTER 9— ADJUSTMENT OF DEBTS OF A MUNICIPALITY › Subchapter SUBCHAPTER I— GENERAL PROVISIONS

11 U.S.C. § 904

Limitation on jurisdiction and powers of court

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Notwithstanding any power of the court, unless the debtor consents or the plan so provides, the court may not, by any stay, order, or decree, in the case or otherwise, interfere with—(1) any of the political or governmental powers of the debtor;(2) any of the property or revenues of the debtor; or(3) the debtor’s use or enjoyment of any income-producing property.(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2622.)Historical and Revision Notessenate report no. 95–989

This section adopts the policy of section 82(c) of current law [section 402(c) of former title 11]. The only change in this section from section 82(c) is to conform the section to the style and cross-references of S. 2266.

house report no. 95–595

This section adopts the policy of section 82(c) of current law [section 402(c) of former title 11]. The Usery case underlines the need for this limitation on the court’s powers. The only change in this section from section 82(c) is to conform the section to the style and cross-references of H.R. 8200. This section makes clear that the court may not interfere with the choices a municipality makes as to what services and benefits it will provide to its inhabitants.

Notes of Decisions
Cited in 30 cases (2 in the last 5 years), 1991–2026 · leading case: Lyda v. City of Detroit, Mich. (In Re City of Detroit, Mich.), 561 B.R. 684 (6th Cir. 2016).
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Lyda v. City of Detroit, Mich. (In Re City of Detroit, Mich.), 561 B.R. 684 (6th Cir. 2016). · cites it 9× “” 11 U.S.C. § 904 . Plaintiffs’ due process and equal protection claims are, moreover, inadequately pled.”
Fin. Oversight & Mgmt. Bd. for P.R. v. Ad Hoc Grp. of PREPA Bondholders (In Re Fin. Oversight & Mgmt. Bd. for P.R.), 899 F.3d 13 (1st Cir. 2018). · cites it 4× “§ 2165 and modeled after section 904 of the municipal bankruptcy code, 11 U.S.C. § 904 , prohibited the Title III court "from transferring control of PREPA's management and property to a receiver without the Oversight Board's consent.”
Ass'n of Retired Employees v. City of Stockton (In re City of Stockton), 478 B.R. 8 (Bankr. E.D. Cal. 2012). · cites it 6× “The difficulty is that 11 U.S.C. § 904 forbids the court from using any of its powers to “interfere with” property or revenues of a chapter 9 debtor.”
Aurelius Capital Master, Ltd. v. Commonwealth (In Re Fin. Oversight & Mgmt. Bd. for Puerto Rico), 919 F.3d 638 (1st Cir. 2019). · cites it 2× “" Fashioned after Section 904 of the Bankruptcy Code, 11 U.S.C. § 904 , Section 305 of PROMESA establishes that: [N]otwithstanding any power of the court, unless the Oversight Board consents or the plan so provides, the court may not , by any stay, order, or decree .”
In re Jefferson Cnty., 474 B.R. 228 (Bankr. N.D. Ala. 2012). · cites it 4× “Additionally, it has already asserted that this Court cannot require transfer or payment of the Net Revenues to the Debt Service Fund due to the limitations imposed under 11 U.S.C. § 904 (1) — (3). The effect of this section is that absent consent by the County and as property…”
Assured Guar. Corp. v. Fin. Oversight & Mgmt. Bd. for Puerto Rico (In Re Fin. Oversight & Mgmt. Bd. for Puerto Rico), 919 F.3d 121 (1st Cir. 2019). “11 U.S.C. § 904 . Section 305 of PROMESA mirrors this language.”
In re City of Stockton, 486 B.R. 194 (Bankr. E.D. Cal. 2013). · cites it 6× “” The answer is: 11 U.S.C. § 904 gives a chapter 9 debtor freedom to decide whether to ignore or to follow the Rule 9019 compromise-approval procedure, but the debtor may need to account for prior compromises during plan confirmation proceedings.”
In re City of Detroit, 524 B.R. 147 (Bankr. E.D. Mich. 2014). · cites it 2× “11 U.S.C. § 904 . The issue, therefore, is primarily whether the available state law remedies could result in a greater recovery for the City’s creditors than confirmation of the plan.”
In re Jefferson Cnty., 484 B.R. 427 (Bankr. N.D. Ala. 2012). · cites it 3× “This retention of control over its property, the res, has been incorporated into 11 U.S.C. § 904 along with other restrictions placed on a bankruptcy court’s interference with a municipal debtor’s powers under our system of dual sovereignty inherent in federalism.”
In re City of Stockton, 526 B.R. 35 (Bankr. E.D. Cal. 2015). · cites it 4× “11 U.S.C. § 904 . 29 *52 3 Section 903 is the linchpin of CalPERS’ argument that the California legislature, despite the Supremacy Clause of the U.”
In Re New York City Off-Track Betting Corp., 434 B.R. 131 (Bankr. S.D.N.Y. 2010). · cites it 2× “11 U.S.C. § 904 . TÍiis section codifies the Tenth Amendment’s general prohibition on a bankruptcy court’s power to interfere with a state entity.”
Sylvia Evans, Adm'r of the Est. of Andrew Evans v. City of Chicago, 10 F.3d 474 (7th Cir. 1993). “) Federal law excluding municipalities from involuntary bankruptcy, 11 U.S.C. § 904 , may make cities more able (and thus more willing) to defer payment, but a decision by Congress to limit the scope of federal remedies does not justify stretching the due process clause.”
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