U.S. Code » Title 28 » Part PART III— COURT OFFICERS AND EMPLOYEES › Chapter CHAPTER 57— GENERAL PROVISIONS APPLICABLE TO COURT OFFICERS AND EMPLOYEES

28 U.S.C. § 959

Trustees and receivers suable; management; State laws

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(a) Trustees, receivers or managers of any property, including debtors in possession, may be sued, without leave of the court appointing them, with respect to any of their acts or transactions in carrying on business connected with such property. Such actions shall be subject to the general equity power of such court so far as the same may be necessary to the ends of justice, but this shall not deprive a litigant of his right to trial by jury.(b) Except as provided in section 1166 of title 11, a trustee, receiver or manager appointed in any cause pending in any court of the United States, including a debtor in possession, shall manage and operate the property in his possession as such trustee, receiver or manager according to the requirements of the valid laws of the State in which such property is situated, in the same manner that the owner or possessor thereof would be bound to do if in possession thereof.(June 25, 1948, ch. 646, 62 Stat. 926; Pub. L. 95–598, title II, § 235, Nov. 6, 1978, 92 Stat. 2667.)Historical and Revision Notes

Based on title 28, U.S.C., 1940 ed., §§ 124, 125 (Mar. 3, 1911, ch. 231, §§ 65, 66, 36 Stat. 1104).

Section consolidates part of section 124 of title 28, U.S.C., 1940 ed., with section 125 of the same title. The criminal penalty for violation of said section 124 is incorporated in section 1911 of Title 18, Crimes and Criminal Procedure.

Section was extended and made applicable to trustees and debtors in possession. The provision at the end of subsection (a) for preserving the right to a jury trial was added to clarify the intent of section 125 of title 28, U.S.C., 1940 ed., as construed in Vany v. Receiver of Toledo, St. L. and K.C. R.R. Co., C.C. 1895, 67 F. 379.

Changes in phraseology were made.

Editorial NotesAmendments

1978—Subsec. (b). Pub. L. 95–598 substituted “Except as provided in section 1166 of title 11, a trustee” for “A trustee”.

Statutory Notes and Related SubsidiariesEffective Date of 1978 Amendment

Amendment by Pub. L. 95–598 effective Oct. 1, 1979, see section 402(c) of Pub. L. 95–598, set out as an Effective Date note preceding section 101 of Title 11, Bankruptcy.

Notes of Decisions
Cited in 511 cases (52 in the last 5 years), 1950–2026 · leading case: In re Jefferson Cnty., 484 B.R. 427 (Bankr. N.D. Ala. 2012).
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In re Jefferson Cnty., 484 B.R. 427 (Bankr. N.D. Ala. 2012). · cites it 44× “§ 362 (b)(4) is not applicable to avoid the Automatic Stays; and (6) the provisions of 28 U.S.C. § 959 are inapplicable to a municipal debtor such as Jefferson County, Alabama, and do not permit, without modification of the Automatic Stays, the bringing of a suit in an Alabama…”
In Re Old Carco LLC, 406 B.R. 180 (Bankr. S.D.N.Y. 2009). · cites it 20× “Nevertheless, several of the Affected Dealers cite cases from this bankruptcy court, as well as 28 U.S.C. § 959 (b), for their argument that the Bankruptcy Code does not preempt all state and local laws related to police or regulatory powers.”
Midlantic Nat'l Bank v. New Jersey Dep't of Env't Prot., 474 U.S. 494 (1986). · cites it 8× “New York rested its objection on "public policy" considerations reflected in applicable local laws, and on the requirement of 28 U. S. C. § 959 (b) that a trustee "manage and operate" the property of the estate "according to the requirements of the valid laws of the State in…”
In Re Old Carco LLC, 424 B.R. 633 (Bankr. S.D.N.Y. 2010). · cites it 19× “Specifically, the Affected Dealers contend that because the state in which each Affected Dealer is located has enacted a comprehensive regulatory scheme (the “Dealer Laws”) pursuant to its respective police powers, which scheme was intended to address public health and safety…”
In Re Delorean Motor Co., Debtor. David W. Allard, Jr. v. Howard L. Weitzman, an Individual, 991 F.2d 1236 (6th Cir. 1993). · cites it 5× “Count I of the complaint alleges that because the Weitzman Action was filed without obtaining leave of the Bankruptcy Court it violates 28 U.S.C. § 959 (a). The Trustee seeks declaratory relief as well as actual damages incurred in defending against the action.”
In Re Kish, 41 B.R. 620 (Bankr. E.D. Mich. 1984). · cites it 20× “At the hearing on the order to show cause, the respondent submitted a brief citing 28 U.S.C. § 959 as its basis for proceeding with a lawsuit prior to obtaining leave of this Court.”
Kipperman v. Internal Revenue Serv., U.S.A. (In Re 800Ideas.com, Inc.), 496 B.R. 165 (9th Cir. BAP 2013). · cites it 19× “The Court 6 therefore considered the policy embedded in 28 U.S.C. § 959 (b) 7 of ensuring a trustee’s compliance with state law when the 8 trustee is authorized under bankruptcy law to operate the 9 debtor’s business.”
Kashani v. Fulton (In Re Kashani), 190 B.R. 875 (9th Cir. BAP 1995). · cites it 7× “A limited exception to the longstanding rule that approval of the appointing court is required to sue the trustee is provided in 28 U.S.C. § 959 (a). 10 The exception provides that a trustee, receiver, or manager may be sued without leave of the court in which the appointment…”
In Re VistaCare Grp., LLC, 678 F.3d 218 (3rd Cir. 2012). · cites it 5× “” 28 U.S.C. § 959 (a) (emphasis added). 3 This provision, originally enacted in 1887, just six years after Barton , seems to have been in direct response to the concerns raised in Justice Miller’s dissent in Barton .”
Mission Prod. Holdings, Inc. v. Tempnology, LLC, 139 S. Ct. 1652 (2019). · cites it 2× “See 28 U. S. C. §959 (b) (requiring a trustee to manage the estate in accordance with applicable law).”
Cont'l Air Lines, Inc. v. Hillblom (In Re Cont'l Air Lines, Inc.), 61 B.R. 758 (S.D. Tex. 1986). · cites it 7× “Equitable Relief Appellants urge the applicability of 28 U.S.C. § 959 , 45 which authorizes lawsuits against debtors-in-possession with respect to any of their acts or transactions in carrying on business.”
Phoenician Mediterranean Villa, LLC v. Swope, 554 B.R. 747 (W.D. Pa. 2016). · cites it 7× “672 (1881), and 28 U.S.C. § 959 (a) were inapplicable. (Id.”
Show all 511 citing cases →
— 28 U.S.C. § 959(a) — 6 cases
Blixseth v. Brown, 470 B.R. 562 (D. Mont. 2012).
LTV Steel Co. v. Bd. of Educ. of the Cleveland City Sch. Dist. (In Re Chateaugay Corp., Reomar, Inc.), 93 B.R. 26 (S.D.N.Y. 1988).
Baptist Med. Ctr. v. Singh (In Re Baptist Med. Ctr.), 80 B.R. 637 (Bankr. E.D.N.Y. 1987).
Est. of Wattar v. Fox (In re Sharif), 565 B.R. 636 (N.D. Ill. 2017).
City of New York v. Patton, 390 F. Supp. 1001 (S.D.N.Y. 1975).
— 28 U.S.C. § 959(b) — 3 cases
In Re Wall Tube & Metal Prods. Co., 56 B.R. 918 (Bankr. E.D. Tenn. 1986).
Walker v. Maury Cnty. (In Re Scott Hous. Sys., Inc.), 91 B.R. 190 (Bankr. S.D. Ga. 1988).
In Re St. Lawrence Corp., 239 B.R. 720 (Bankr. D.N.J. 1999).
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