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S. 1861 (113th): Taxpayer Protection and Responsible Resolution Act

The text of the bill below is as of Dec 19, 2013 (Introduced).


II

113th CONGRESS

1st Session

S. 1861

IN THE SENATE OF THE UNITED STATES

December 19, 2013

(for himself and Mr. Toomey) introduced the following bill; which was read twice and referred to the Committee on the Judiciary

A BILL

To save taxpayer money and end bailouts of financial institutions by providing for a process to allow financial institutions to go bankrupt.

1.

Short title

This Act may be cited as the Taxpayer Protection and Responsible Resolution Act .

2.

Repeal of title II of Dodd-Frank Wall Street Reform and Consumer Protection Act

(a)

In general

Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( Public Law 111–203 ) is repealed and any Federal law amended by such title shall, on and after the date of enactment of this Act, be effective as if title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act had not been enacted.

(b)

Conforming amendments

(1)

Dodd-Frank Wall Street Reform and Consumer Protection Act

The Dodd-Frank Wall Street Reform and Consumer Protection Act is amended—

(A)

in the table of contents, by striking all items relating to title II;

(B)

in section 165(d)(6), by striking , a receiver appointed under title II,;

(C)

in section 716(g), by striking or a covered financial company under title II ;

(D)

in section 1105(e)(5), by striking amount of any securities issued under that chapter 31 for such purpose shall be treated in the same manner as securities issued under section 208(n)(5)(E) and inserting issuances of such securities under that chapter 31 for such purpose shall by treated as public debt transactions of the United States, and the proceeds from the sale of any obligations acquired by the Secretary under this paragraph shall be deposited into the Treasury of the United States as miscellaneous receipts; and

(E)

in section 1106(c)(2)(A)

(i)

in clause (i), by inserting , other than a covered financial corporation (as defined in section 101(9A) of title 11, United States Code), after company; and

(ii)

in clause (ii), by inserting , other than a covered financial corporation (as defined in section 101(9A) of title 11, United States Code), after company.

(2)

Federal Deposit Insurance Act

Section 10(b)(3)(A) of the Federal Deposit Insurance Act ( 12 U.S.C. 1820(b)(3)(A) ) is amended by striking , or of such nonbank financial company supervised by the Board of Governors or bank holding company described in section 165(a) of the Financial Stability Act of 2010, for the purpose of implementing its authority to provide for orderly liquidation of any such company under title II of that Act .

(3)

Federal Reserve Act

Section 13(3) of the Federal Reserve Act ( 12 U.S.C. 343(3) ) is amended—

(A)

in subparagraph (B)

(i)

in clause (ii), by striking , resolution under title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or and inserting or is subject to resolution under; and

(ii)

in clause (iii), by striking , resolution under title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or and inserting or resolution under; and

(B)

by striking subparagraph (E).

3.

General provisions relating to covered financial corporations

(a)

Definition

Section 101 of title 11, United States Code, is amended by inserting the following after paragraph (9):

(9A)

The term covered financial corporation means any corporation incorporated or organized under any Federal or State law, other than a stockbroker, a commodity broker, or an entity of the kind specified in paragraph (2) or (3) of section 109(b), that is—

(A)

a bank holding company, as that term is defined in section 2(a) of the Bank Holding Company Act of 1956 ( 12 U.S.C. 1841(a) ); or

(B)

predominantly engaged in activities that the Board of Governors of the Federal Reserve System has determined are financial in nature or incidental to such financial activity for purposes of section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)).

.

(b)

Applicability of chapters

Section 103 of title 11, United States Code, is amended—

(1)

in subsection (a)

(A)

by striking section 1161 and inserting sections 1161 and 1401 ; and

(B)

by striking or 13 and inserting 13, or 14 ; and

(2)

by adding at the end the following:

(l)

Chapter 14 of this title applies only in a case under this title concerning a covered financial corporation.

(m)

Except as otherwise provided in chapter 14 of this title, chapter 11 of this title applies in a case under chapter 14 of this title.

.

(c)

Who may be a debtor

Section 109 of title 11, United States Code, is amended—

(1)

in subsection (b)

(A)

in paragraph (2), by striking or at the end;

(B)

in paragraph (3)(B), by striking the period at the end and inserting ; or; and

(C)

by adding at the end the following:

(4)

a covered financial corporation.

; and

(2)

by adding at the end the following:

(i)

An entity may be a debtor under chapter 14 of this title only if the entity is a covered financial corporation.

.

4.

Liquidation, reorganization, or recapitalization of a covered financial corporation

(a)

In general

Title 11, United States Code, is amended by inserting before chapter 15 the following:

14

Liquidation, reorganization, or recapitalization of a covered financial corporation

Sec.

1401. Inapplicability of other sections.

1402. Definitions for this chapter.

1403. Commencement of a case concerning a covered financial corporation.

1404. Regulators.

1405. Special trustee and bridge company.

1406. Special transfer of property of the estate.

1407. Automatic stay; assumed debt.

1408. Treatment of qualified financial contracts and affiliate contracts.

1409. Licenses, permits, and registrations.

1410. Exemption from securities laws.

1411. Inapplicability of certain avoiding powers.

1401.

Inapplicability of other sections

Sections 321(c) and 322(b) do not apply in a case under this chapter.

1402.

Definitions for this chapter

In this chapter, the following definitions shall apply:

(1)

The term Board means the Board of Governors of the Federal Reserve System.

(2)

The term bridge company means a newly formed corporation the equity securities of which are transferred to a special trustee under section 1405(a).

(3)

The term capital structure debt means debt, other than a qualified financial contract, of the debtor for borrowed money with an original maturity of at least 1 year.

(4)

The term contractual right means a contractual right as defined in section 555, 556, 559, or 560.

(5)

The term qualified financial contract means any contract of a kind specified in paragraph (25), (38A), (47), or (53B) of section 101, section 741(7), or paragraph (4), (5), (11), or (13) of section 761.

1403.

Commencement of a case concerning a covered financial corporation

(a)

A case under this chapter may be commenced by the filing of a petition with the bankruptcy court—

(1)

under section 301; or

(2)

by the Board, only if—

(A)

the Board certifies in the petition that it has determined that—

(i)

the covered financial corporation—

(I)

has incurred losses that will deplete all or substantially all of the capital of the covered financial corporation, and there is no reasonable prospect for the covered financial corporation to avoid such depletion;

(II)

is insolvent;

(III)

is not paying or is unable to pay the debts of the covered financial corporation (other than debts subject to a bona fide dispute as to liability or amount) as they become due; or

(IV)

is likely to be in a financial condition specified in subclause (I), (II), or (III) sufficiently soon such that the immediate commencement of a case under this chapter concerning the covered financial corporation is necessary to prevent imminent substantial harm to financial stability in the United States; and

(ii)

the commencement of a case under this chapter concerning the covered financial corporation and the effect of a transfer under section 1406 is necessary to prevent imminent substantial harm to financial stability in the United States; and

(B)

the bankruptcy court determines, after a hearing described in subsection (b), that the Board has shown by a preponderance of the evidence that the requirements under subparagraph (A) have been satisfied.

(b)
(1)

A hearing described in this subsection is a hearing held not later than 12 hours after the Board makes a certification under subsection (a)(2)(A), with notice only to—

(A)

the covered financial corporation;

(B)

the Federal Deposit Insurance Corporation; and

(C)

the Secretary of the Treasury.

(2)

Only the Board and the entities listed in paragraph (1) may attend or participate in a hearing described in this subsection. Transcripts of such hearing shall be sealed until the end of the case.

(c)
(1)

The covered financial corporation may file an appeal in the district court of a determination made by the bankruptcy court under subsection (a)(2)(B) not later than 12 hours after the bankruptcy court makes such determination, with notice only to the entities listed in subsection (b)(1) and the Board.

(2)

The district judge specified under section 298(c)(1) of title 28 for the judicial circuit in which the case is pending shall hear the appeal under paragraph (1) and review within 12 hours the determination of the bankruptcy court under subsection (a)(2)(B) for abuse of discretion.

(d)
(1)

The commencement of a case under subsection (a)(1) constitutes an order for relief under this chapter.

(2)

In a case commenced under subsection (a)(2), the bankruptcy court shall immediately order relief under this chapter if—

(A)

the bankruptcy court makes a determination under subsection (a)(2)(B) that the requirements of subsection (a)(2)(A) have been satisfied; and

(B)
(i)

the period for appeal under subsection (c)(1) has passed without an appeal having been filed; or

(ii)

the district court affirms the determination of the bankruptcy court under subsection (c)(2).

(3)

Notwithstanding paragraph (2), the bankruptcy court shall order relief in a case commenced under subsection (a)(2) if the debtor consents to the order.

1404.

Regulators

(a)

The Board may raise and may appear and be heard on any issue in any case or proceeding under this title relevant to the regulation of the debtor by the Board or to financial stability in the United States.

(b)

The Federal Deposit Insurance Corporation may raise and may appear and be heard on any issue in any case or proceeding under this title in connection with a transfer under section 1406.

1405.

Special trustee and bridge company

(a)

On request of the trustee or the Board, the court may order the trustee to appoint 1 special trustee and transfer to the special trustee all of the equity securities in a corporation to hold in trust for the sole benefit of the estate, if—

(1)

the corporation does not have any property, executory contracts, unexpired leases, or debts, other than any property acquired or executory contracts, unexpired leases, or debts assumed when acting as a transferee of a transfer under section 1406;

(2)

the equity securities of the corporation are property of the estate; and

(3)

the court approves—

(A)

the trust agreement governing the special trustee;

(B)

the governing documents of the corporation; and

(C)

the identity of—

(i)

the special trustee; and

(ii)

the directors and senior officers of the corporation.

(b)

The trust agreement governing the special trustee shall provide—

(1)

for the payment of the costs and expenses of the special trustee from the assets of the trust and not from the property of the estate;

(2)

that the special trustee provide—

(A)

periodic reporting to the estate; and

(B)

information about the bridge company as reasonably requested by a party in interest to prepare a disclosure statement for a plan providing for distribution of any securities of the bridge company, if such information is necessary to prepare such disclosure statement;

(3)

that the special trustee provide notice to and consult with parties in interest in the case in connection with—

(A)

any change in a director or senior officer of the bridge company;

(B)

any modification to the governing documents of the bridge company; and

(C)

any major corporate action of the bridge company, including—

(i)

recapitalization;

(ii)

a liquidity borrowing;

(iii)

termination of an intercompany debt or guarantee;

(iv)

a transfer of a substantial portion of the assets of the bridge company; or

(v)

the issuance or sale of any securities of the bridge company;

(4)

that the proceeds of the sale of any equity securities of the bridge company by the special trustee be held in trust for the benefit of or transferred to the estate; and

(5)

that the property held in trust by the special trustee is subject to distribution in accordance with the plan and subsection (c).

(c)

The special trustee shall distribute the assets held in trust in accordance with the plan on the effective date of the plan, after which time the office of the special trustee shall terminate, except as may be necessary to wind up and conclude the business and financial affairs of the trust.

(d)

After a transfer under section 1406, the special trustee shall be subject only to applicable nonbankruptcy law, and the actions and conduct of the special trustee shall no longer be subject to approval by the court in the case under this chapter.

1406.

Special transfer of property of the estate

(a)

On request of the trustee or the Board, and after notice and hearing and not less than 24 hours after the commencement of the case, the court may order a transfer under this section of property of the estate to a bridge company. Except as provided under this section, the provisions of section 363 shall apply to a transfer under this section.

(b)

Unless the court orders otherwise, notice of a request for an order under subsection (a) shall consist of electronic or telephonic notice of not less than 24 hours to—

(1)

the debtor;

(2)

the trustee;

(3)

the holders of the 20 largest secured claims against the debtor;

(4)

the holders of the 20 largest unsecured claims against the debtor;

(5)

the Board;

(6)

the Federal Deposit Insurance Corporation;

(7)

the Secretary of the Treasury;

(8)

the United States trustee; and

(9)

each primary financial regulatory agency, as defined in section 2(12) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5301(12) ), with respect to any affiliate that is proposed to be transferred under this section.

(c)

The court may not order a transfer under this section unless the court determines, based upon a preponderance of the evidence, that—

(1)

the transfer under this section is necessary to prevent imminent substantial harm to financial stability in the United States;

(2)

the proposed transfer does not provide for the assumption of any capital structure debt by the bridge company;

(3)

the proposed transfer provides for the transfer of any accounts of depositors of the debtor that are insured by the Federal Deposit Insurance Company to the bridge company; and

(4)

the Board certifies to the court that the Board has determined that the bridge company provides adequate assurance of future performance of any executory contract or unexpired leased assumed and assigned to the bridge company, and of payment of any debt assumed by the bridge company, in the transfer under this section.

1407.

Automatic stay; assumed debt

(a)
(1)

A petition filed under section 301 or 1403 operates as a stay, applicable to all entities, of the termination or modification of any debt, contract, lease, or agreement described in paragraph (2), or of any right or obligation under any such debt, contract, lease or agreement, solely because of—

(A)

a default by the debtor under any such debt, contract, lease, or agreement; or

(B)

a provision in such debt, contract, lease, or agreement or in applicable nonbankruptcy law that is conditioned on—

(i)

the insolvency or financial condition of the debtor at any time before the closing of the case;

(ii)

the commencement of a case under this title concerning the debtor;

(iii)

the appointment of or taking possession by a trustee in a case under this title concerning the debtor or by a custodian before the commencement of the case; or

(iv)

a credit rating agency rating, or absence or withdrawal of a credit rating agency rating—

(I)

of the debtor at any time after the commencement of the case;

(II)

of an affiliate during the 48 hours after the commencement of the case; or

(III)

while the special trustee is a direct or indirect beneficial holder of more than 50 percent of the equity securities of the bridge company—

(aa)

of the bridge company; or

(bb)

of an affiliate, if all of the direct or indirect interests in the affiliate that are property of the estate are transferred under section 1406.

(2)

A debt, contract, lease, or agreement described in this paragraph is—

(A)

any debt (other than capital structure debt), executory contract (other than a qualified financial contract), or unexpired lease of the debtor;

(B)

any agreement under which the debtor issued or is obligated for debt (other than capital structure debt);

(C)

any debt, executory contract (other than a qualified financial contract), or unexpired lease of an affiliate; or

(D)

any agreement under which an affiliate issued or is obligated for debt.

(3)

The stay under this subsection terminates—

(A)

as to the debtor, upon the earliest of—

(i)

48 hours after the commencement of the case;

(ii)

assumption of the debt, contract, or lease under an order authorizing a transfer under section 1406; or

(iii)

a determination by the court not to order a transfer under section 1406; and

(B)

as to an affiliate, upon the earliest of—

(i)

entry of an order authorizing a transfer under section 1406 in which the direct or indirect interests in the affiliate that are property of the estate are not transferred under section 1406;

(ii)

a determination by the court not to order a transfer under section 1406; or

(iii)

48 hours after the commencement of the case, if the court has not ordered a transfer under section 1406.

(4)

Sections 362(d), 362(e), 362(f), and 362(g) apply to a stay under this subsection.

(b)

A debt, executory contract (other than a qualified financial contract), or unexpired lease of the debtor, or an agreement under which the debtor has issued or is obligated for any debt, may be assumed by a bridge company in a transfer under section 1406 notwithstanding any provision in an agreement or in applicable nonbankruptcy law that—

(1)

prohibits, restricts, or conditions the assignment of the debt, contract, lease, or agreement; or

(2)

terminates or modifies, or permits a party other than the debtor to terminate or modify, the debt, contract, lease, or agreement on account of—

(A)

the assignment of the debt, contract, lease, or agreement; or

(B)

a change in control of any party to the debt, contract, lease, or agreement.

(c)
(1)

A debt, contract, lease, or agreement of the kind described in subsection (a)(2)(A) or (a)(2)(B) may not be terminated or modified, and any right or obligation under such debt, contract, lease, or agreement may not be terminated or modified, as to the bridge company solely because of a provision in the debt, contract, lease, or agreement or in applicable nonbankruptcy law—

(A)

of the kind described in subsection (a)(1)(B) as applied to the debtor;

(B)

that prohibits, restricts, or conditions the assignment of the debt, contract, lease, or agreement; or

(C)

that terminates or modifies, or permits a party other than the debtor to terminate or modify, the debt, contract, lease or agreement, on account of—

(i)

the assignment of the debt, contract, lease, or agreement; or

(ii)

a change in control of any party to the debt, contract, lease, or agreement.

(2)

If there has been a default by the debtor of a provision other than the kind described in paragraph (1) in a debt, contract, lease or agreement of the kind described in subsection (a)(2)(A) or (a)(2)(B), the bridge company may assume such debt, contract, lease, or agreement only if the bridge company—

(A)

cures, or provides adequate assurance to the court in connection with a transfer under section 1406 that the bridge company will promptly cure, the default;

(B)

compensates, or provides adequate assurance to the court in connection with a transfer under section 1406 that the bridge company will promptly compensate, a party other than the debtor to the debt, contract, lease, or agreement, for any actual pecuniary loss to the party resulting from the default; and

(C)

provides adequate assurance to the court in connection with a transfer under section 1406 of future performance under the debt, contract, lease, or agreement.

1408.

Treatment of qualified financial contracts and affiliate contracts

(a)

Notwithstanding sections 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(27), 555, 556, 559, 560, and 561, a petition filed under section 301 or 1403 operates as a stay, during the period specified in section 1407(a)(3)(A), applicable to all entities, of the exercise of a contractual right—

(1)

to cause the liquidation or termination of a qualified financial contract of the debtor or an affiliate; or

(2)

to offset or net out any termination value, payment amount, or other transfer obligation arising under or in connection with a qualified financial contract of the debtor or an affiliate; or

(3)

under any security agreement or arrangement or other credit enhancement forming a part of or related to a qualified financial contract of the debtor or an affiliate.

(b)
(1)

During the period specified in section 1407(a)(3)(A), the trustee or the affiliate shall perform all payment and delivery obligations under a qualified financial contract of the debtor or the affiliate, respectively, that become due after the commencement of the case. The stay provided under subsection (a) terminates as to a qualified financial contract of the debtor or an affiliate immediately upon the failure of the trustee or the affiliate, respectively, to perform any such obligation during such period.

(2)

A counterparty to any qualified financial contract of the debtor that is assumed and assigned in a transfer under section 1406 may perform any unperformed payment or delivery obligation under the qualified financial contract promptly after the assumption and assignment with the same effect as if the counterparty had timely performed such obligations.

(c)

A qualified financial contract between an entity and the debtor may not be assigned to or assumed by the bridge company in a transfer under section 1406 unless—

(1)

all qualified financial contracts between the entity and the debtor are assigned to and assumed by the bridge company in the transfer under section 1406;

(2)

all claims of the entity against the debtor under any qualified financial contract between the entity and the debtor (other than any claim that, under the terms of the qualified financial contract, is subordinated to the claims of general unsecured creditors) are assigned to and assumed by the bridge company;

(3)

all claims of the debtor against the entity under any qualified financial contract between the entity and the debtor are assigned to and assumed by the bridge company; and

(4)

all property securing or any other credit enhancement furnished by the debtor for any qualified financial contract described in paragraph (1) or any claim described in paragraph (2) or (3) under any qualified financial contract between the entity and the debtor is assigned to and assumed by the bridge company.

(d)

Section 365(b)(1) does not apply to a default under a qualified financial contract of the debtor that is assumed and assigned in a transfer under section 1406 if the default—

(1)

is a breach of a provision of the kind specified in section 1407(a)(1)(B)(iv); and

(2)

in the case of a breach of a provision of the kind specified in section 1407(a)(1)(B)(iv)(III), occurs while the bridge company is a direct or indirect beneficial holder of more than 50 percent of the equity securities of the affiliate.

(e)

Notwithstanding any provision in a qualified financial contract or in applicable nonbankruptcy law, a qualified financial contract of the debtor that is assumed or assigned in a transfer under section 1406 may not be terminated or modified, and any right or obligation under the qualified financial contract may not be terminated or modified, for a breach of a provision of the kind specified in section 1407(b) at any time after the entry of an order under section 1406 until such time as the special trustee is no longer the direct or indirect beneficial holder of more than 50 percent of the equity securities of the bridge company.

(f)

Notwithstanding any provision in any agreement or in applicable nonbankruptcy law, an agreement of an affiliate (including an executory contract, unexpired lease, or agreement under which the affiliate issued or is obligated for debt), and any right or obligation under such agreement, may not be terminated or modified at any time after the commencement of the case solely because of a condition described in section 1407(b) if—

(1)

all direct or indirect interests in the affiliate that are property of the estate are transferred under section 1406 to the bridge company within the period specified in subsection (a);

(2)

the bridge company assumes—

(A)

any guarantee or other credit enhancement issued by the debtor relating to the agreement of the affiliate; and

(B)

any right of setoff, netting arrangement, or debt of the debtor that directly arises out of or directly relates to the guarantee or credit enhancement; and

(3)

any property of the estate that directly serves as collateral for the guarantee or credit enhancement is transferred to the bridge company.

1409.

Licenses, permits, and registrations

(a)

Notwithstanding any otherwise applicable nonbankruptcy law, if a request is made under section 1406 for a transfer of property of the estate, any Federal, State, or local license, permit, or registration that the debtor or an affiliate had immediately before the commencement of the case and that is proposed to be transferred under section 1406 may not be terminated or modified at any time after the request solely on account of—

(1)

the insolvency or financial condition of the debtor at any time before the closing of the case;

(2)

the commencement of a case under this title concerning the debtor;

(3)

the appointment of or taking possession by a trustee in a case under this title concerning the debtor or by a custodian before the commencement of the case; or

(4)

a transfer under section 1406.

(b)

Notwithstanding any otherwise applicable nonbankruptcy law, any Federal, State, or local license, permit, or registration that the debtor had immediately before the commencement of the case that is included in a transfer under section 1406 shall vest in the bridge company.

1410.

Exemption from securities laws

For purposes of section 1145, a security of the bridge company shall be deemed to be a security of a successor to the debtor under a plan if the court approves the disclosure statement for the plan as providing adequate information (as defined in section 1125(a)) about the bridge company and the security.

1411.

Inapplicability of certain avoiding powers

Except with respect to a capital structure debt, a transfer made or an obligation incurred by the debtor, including any obligation released by the debtor or the estate, to or for the benefit of an affiliate in a transfer under section 1406, is not avoidable under section 544, 547, 548(a)(1)(B), or 549, or under any similar nonbankruptcy law.

.

(b)

Technical and conforming amendment

The table of chapters for title 11, United States Code, is amended by inserting after the item relating to chapter 13 the following:

14. Liquidation, reorganization, or recapitalization of a covered financial corporation 1401

.

5.

Amendments to title 28, United States Code

(a)

Amendment to chapter 13

Chapter 13 of title 28, United States Code, is amended by adding at the end the following:

298.

Judge for a case under chapter 14 of title 11

(a)

Notwithstanding section 295, the Chief Justice of the United States shall designate not less than 1 district judge from each circuit to be available to hear an appeal under section 158(a) in a case under title 11 concerning a covered financial corporation or under section 1403(c) of title 11.

(b)
(1)

Notwithstanding section 295, the Chief Justice of the United States shall designate a panel of not less than 10 bankruptcy judges, who are experts in cases under title 11 in which a financial institution is a debtor, to be available to hear a case under chapter 14 of title 11.

(2)

Notwithstanding section 295, a case under chapter 14 of title 11 shall be heard under section 157 by a bankruptcy judge designated under paragraph (1), who shall be assigned to hear such case by the chief judge of the court of appeals for the circuit embracing the district in which the case is pending.

(3)

If the bankruptcy judge designated and assigned to hear a case under paragraphs (1) and (2) is not assigned to the district in which the case is pending, the bankruptcy judge shall be temporarily assigned to the district.

(c)
(1)

Notwithstanding section 295, an appeal under section 158(a) in a case under title 11 concerning a covered financial corporation or under section 1403(c) of title 11 shall be heard by a district judge who—

(A)

is the district judge designated under subsection (a) from the circuit in which the case is pending;

(B)

if more than 1 district judge has been designated under subsection (a) from the circuit in which the case is pending, is 1 such district judge who is designated by the chief judge of that circuit to hear the case; or

(C)

if none of the district judges designated under subsection (a) for the circuit in which the case is pending are immediately available, is designated under subsection (a) from another circuit and has been designated by the Chief Justice of the United States to hear the case.

(2)

If the district judge specified in paragraph (1) is not assigned to the district in which the case is pending, the district judge shall be temporarily assigned to the district.

(d)

A case under chapter 14 of title 11, and all proceedings in the case, shall take place in the district in which the case is pending.

(e)

In this section, the terms covered financial corporation and financial institution have the meaning given such terms in section 101 of title 11.

.

(b)

Amendment to section 1334

Section 1334 of title 28, United States Code, is amended by adding at the end the following:

(f)

This section does not grant jurisdiction to the district courts after a transfer pursuant to an order under section 1406 of title 11

(1)

of any proceeding related to a special trustee appointed, or to a bridge company formed, under section 1405 of title 11; or

(2)

over the property held in trust by the special trustee, the bridge company, or the property of the bridge company.

.

(c)

Technical and conforming amendment

The table of sections for chapter 13 of title 28, United States Code, is amended by adding at the end the following:

298. Judge for a case under chapter 14 of title 11.

.

6.

Limitation on advances from a Federal Reserve bank

Section 10B(b) of the Federal Reserve Act (12 U.S.C. 347b(b)) is amended—

(1)

by redesignating paragraph (5) as paragraph (6);

(2)

by inserting after paragraph (4) the following:

(5)

Limitation on advances to covered financial corporations and bridge companies

Notwithstanding paragraph (2), a Federal Reserve bank may not make advances to any covered financial corporation that is a debtor in a pending case under chapter 14 of title 11, United States Code, or to a bridge company, for the purpose of providing debtor-in-possession financing pursuant to section 364 of such title.

; and

(3)

in paragraph (6), as redesignated—

(A)

by redesignating subparagraphs (B) through (E) as subparagraphs (D) through (G), respectively; and

(B)

by inserting after subparagraph (A) the following:

(B)

Bridge company

The term bridge company has the same meaning as in section 1402(2) of title 11, United States Code.

(C)

Covered financial corporation

The term covered financial corporation has the same meaning as in section 101(9A) of title 11, United States Code.

.