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TITLE 11.
BANKRUPTCY · UNITED STATES CODE
Chapter 5.
Creditors, the Debtor and the Estate
Subchapter III. The Estate
11
USC § 562. Timing of damage measurement in connection
with swap agreements, securities contracts, forward contracts, commodity
contracts, repurchase agreements, and master netting agreements
(a) If the trustee rejects a swap agreement, securities contract (as
defined in section
741), forward contract, commodity contract (as defined in section
761), repurchase agreement, or master netting agreement pursuant to section
365(a), or if a forward contract merchant, stockbroker, financial
institution, securities clearing agency, repo participant, financial
participant, master netting agreement participant, or swap participant
liquidates, terminates, or accelerates such contract or agreement, damages
shall be measured as of the earlier of--
(1) the date of such rejection; or
(2) the date or dates of such liquidation, termination, or acceleration.
(b) If there are not any commercially reasonable determinants of value as
of any date referred to in paragraph (1) or (2) of subsection (a), damages
shall be measured as of the earliest subsequent date or dates on which there
are commercially reasonable determinants of value.
(c) For the purposes of subsection (b), if damages are not measured as of
the date or dates of rejection, liquidation, termination, or acceleration, and
the forward contract merchant, stockbroker, financial institution, securities
clearing agency, repo participant, financial participant, master netting
agreement participant, or swap participant or the trustee objects to the
timing of the measurement of damages--
(1) the trustee, in the case of an objection by a forward contract
merchant, stockbroker, financial institution, securities clearing agency,
repo participant, financial participant, master netting agreement
participant, or swap participant; or
(2) the forward contract merchant, stockbroker, financial institution,
securities clearing agency, repo participant, financial participant, master
netting agreement participant, or swap participant, in the case of an
objection by the trustee,
has the burden of proving that there were no commercially reasonable
determinants of value as of such date or dates.
[Rev. 5-19-05]
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