---
kind: "range"
citation: "12 U.S.C. §§ 5381–5394"
title: "12"
from: "5381"
to: "5394"
count: 14
release: "119-102"
url: "https://uscodex.org/usc/12/5381..5394"
---

# §5381. Definitions

- (a) **In general—** In this subchapter, the following definitions shall apply:
  - (1) **Administrative expenses of the receiver—** The term “administrative expenses of the receiver” [includes](/usc/12/25b.md?p=a-3)—
    - (A) the actual, necessary costs and expenses incurred by the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](#a-8) in liquidating a [covered financial company](#a-8); and
    - (B) any obligations that the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](#a-8) determines are necessary and appropriate to facilitate the smooth and orderly liquidation of the [covered financial company](#a-8).
  - (2) **Bankruptcy Code—** The term “Bankruptcy Code” means [title 11](/usc/11.md).
  - (3) **Bridge financial company—** The term “bridge financial company” means a new [financial company](#a-11) organized by the [Corporation](/usc/12/5301.md?p=7) in accordance with [section 5390(h) of this title](/usc/12/5390.md?p=h) for the purpose of resolving a [covered financial company](#a-8).
  - (4) **Claim—** The term “claim” means any right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.
  - (5) **Company—** The term “[company](/usc/12/24a.md?p=g-1)” has the same meaning as in [section 1841(b) of this title](/usc/12/1841.md?p=b), except that such term [includes](/usc/12/25b.md?p=a-3) any [company](/usc/12/24a.md?p=g-1) described in [paragraph (11)](#a-11), the majority of the securities of which are owned by the United States or any [State](/usc/12/5301.md?p=16).
  - (6) **Court—** The term “Court” means the United States [District](/usc/12/221a.md?p=a) Court for the District of Columbia, unless the context otherwise requires.
  - (7) **Covered broker or dealer—** The term “covered broker or dealer” means a [covered financial company](#a-8) that is a broker or dealer that—
    - (A) is registered with the [Commission](/usc/12/5301.md?p=5) under [section 78o(b)](/usc/15/78o.md?p=b) of title 15; and
    - (B) is a [member](/usc/12/1426a.md?p=g-1) of [SIPC](#a-16).
  - (8) **Covered financial company—** The term “covered financial company”—
    - (A) means a [financial company](#a-11) for which a determination has been made under [section 5383(b) of this title](/usc/12/5383.md?p=b); and
    - (B) does not include an [insured depository institution](/usc/12/24a.md?p=g-2).
  - (9) **Covered subsidiary—** The term “covered subsidiary” means a [subsidiary](/usc/12/24a.md?p=g-1) of a [covered financial company](#a-8), other than—
    - (A) an [insured depository institution](/usc/12/24a.md?p=g-2);
    - (B) an [insurance company](#a-13); or
    - (C) a [covered broker or dealer](#a-7).
  - (10) **Definitions relating to covered brokers and dealers—** The terms “customer”, “customer name securities”, “customer property”, and “net equity” in the context of a [covered broker or dealer](#a-7), have the same meanings as in [section 78lll](/usc/15/78lll.md) of title 15.
  - (11) **Financial company—** The term “financial company” means any [company](/usc/12/24a.md?p=g-1) that—
    - (A) is incorporated or organized under any provision of Federal law or the laws of any [State](/usc/12/5301.md?p=16);
    - (B) is—
      - (i) a [bank holding company](/usc/12/1813.md?p=w-2), as defined in [section 1841(a) of this title](/usc/12/1841.md?p=a);
      - (ii) a [nonbank financial company supervised by the Board of Governors](/usc/12/5311.md?p=a-4-D);
      - (iii) any [company](/usc/12/24a.md?p=g-1) that is predominantly engaged in activities that the [Board of Governors](/usc/12/5301.md?p=3) has determined are financial in nature or incidental thereto for purposes of [section 1843(k) of this title](/usc/12/1843.md?p=k) other than a [company](/usc/12/24a.md?p=g-1) described in clause [(i)](#a-11-B-i) or [(ii)](#a-11-B-ii); or
      - (iv) any [subsidiary](/usc/12/24a.md?p=g-1) of any [company](/usc/12/24a.md?p=g-1) described in any of [clauses (i) through (iii)](#a-11-B-i..a-11-B-iii) that is predominantly engaged in activities that the [Board of Governors](/usc/12/5301.md?p=3) has determined are financial in nature or incidental thereto for purposes of [section 1843(k) of this title](/usc/12/1843.md?p=k) (other than a [subsidiary](/usc/12/24a.md?p=g-1) that is an [insured depository institution](/usc/12/24a.md?p=g-2) or an [insurance company](#a-13)); and
    - (C) is not a Farm [Credit](/usc/12/5481.md?p=7) System institution chartered under and subject to the provisions of the Farm Credit Act of 1971, as amended ([12 U.S.C. 2001](/usc/12/2001.md) et seq.), a governmental entity, or a regulated entity, as defined under [section 4502(20) of this title](/usc/12/4502.md?p=20).
  - (12) **Fund—** The term “[Fund](/usc/12/4702.md?p=10)” means the Orderly Liquidation [Fund](/usc/12/4702.md?p=10) established under [section 5390(n) of this title](/usc/12/5390.md?p=n).
  - (13) **Insurance company—** The term “insurance company” means any entity that is—
    - (A) engaged in the [business of insurance](/usc/12/5371.md?p=a-4);
    - (B) subject to regulation by a [State](/usc/12/5301.md?p=16) insurance regulator; and
    - (C) covered by a [State](/usc/12/5301.md?p=16) law that is designed to specifically deal with the rehabilitation, liquidation, or insolvency of an [insurance company](#a-13).
  - (14) **Nonbank financial company—** The term “[nonbank financial company](/usc/12/5327.md?p=c-2-C)” has the same meaning as in [section 5311(a)(4)(C) of this title](/usc/12/5311.md?p=a-4-C).
  - (15) **Nonbank financial company supervised by the Board of Governors—** The term “[nonbank financial company supervised by the Board of Governors](/usc/12/5311.md?p=a-4-D)” has the same meaning as in [section 5311(a)(4)(D) of this title](/usc/12/5311.md?p=a-4-D).
  - (16) **SIPC—** The term “SIPC” means the Securities Investor Protection [Corporation](/usc/12/5301.md?p=7).
- (b) **Definitional criteria—** For purpose of the definition of the term “[financial company](#a-11)” under [subsection (a)(11)](#a-11), no [company](/usc/12/24a.md?p=g-1) shall be deemed to be predominantly engaged in activities that the [Board of Governors](/usc/12/5301.md?p=3) has determined are financial in nature or incidental thereto for purposes of [section 1843(k) of this title](/usc/12/1843.md?p=k), if the consolidated revenues of such [company](/usc/12/24a.md?p=g-1) from such activities constitute less than 85 percent of the total consolidated revenues of such [company](/usc/12/24a.md?p=g-1), as the [Corporation](/usc/12/5301.md?p=7), in consultation with the [Secretary](/usc/12/5301.md?p=14), shall establish by regulation. In determining whether a [company](/usc/12/24a.md?p=g-1) is a [financial company](#a-11) under this subchapter, the consolidated revenues derived from the ownership or [control](/usc/12/24a.md?p=g-1) of a [depository institution](/usc/12/24a.md?p=g-2) shall be included.

# §5382. Judicial review

- (a) **Commencement of orderly liquidation—**
  - (1) **Petition to District Court—**
    - (A) **District Court review—**
      - (i) **Petition to District Court—** Subsequent to a determination by the [Secretary](/usc/12/5301.md?p=14) under [section 5383 of this title](/usc/12/5383.md) that a [financial company](/usc/12/5381.md?p=a-11) satisfies the criteria in [section 5383(b) of this title](/usc/12/5383.md?p=b), the [Secretary](/usc/12/5301.md?p=14) shall notify the [Corporation](/usc/12/5301.md?p=7) and the [covered financial company](/usc/12/5381.md?p=a-8). If the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/2279bb.md?p=3) (or body performing similar functions) of the [covered financial company](/usc/12/5381.md?p=a-8) acquiesces or consents to the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver, the [Secretary](/usc/12/5301.md?p=14) shall appoint the [Corporation](/usc/12/5301.md?p=7) as receiver. If the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/2279bb.md?p=3) (or body performing similar functions) of the [covered financial company](/usc/12/5381.md?p=a-8) does not acquiesce or consent to the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver, the [Secretary](/usc/12/5301.md?p=14) shall petition the United States [District](/usc/12/221a.md?p=a) [Court](/usc/12/5381.md?p=a-6) for the District of Columbia for an order authorizing the [Secretary](/usc/12/5301.md?p=14) to appoint the [Corporation](/usc/12/5301.md?p=7) as receiver.
      - (ii) **Form and content of order—** The [Secretary](/usc/12/5301.md?p=14) shall present all relevant findings and the recommendation made pursuant to [section 5383(a) of this title](/usc/12/5383.md?p=a) to the [Court](/usc/12/5381.md?p=a-6). The petition shall be filed under seal.
      - (iii) **Determination—** On a strictly confidential basis, and without any prior public disclosure, the [Court](/usc/12/5381.md?p=a-6), after notice to the [covered financial company](/usc/12/5381.md?p=a-8) and a hearing in which the [covered financial company](/usc/12/5381.md?p=a-8) may oppose the petition, shall determine whether the determination of the [Secretary](/usc/12/5301.md?p=14) that the [covered financial company](/usc/12/5381.md?p=a-8) is in [default](/usc/12/1467a.md?p=e-7-A) or [in danger of default](/usc/12/1467a.md?p=e-7-A) and satisfies the definition of a [financial company](/usc/12/5381.md?p=a-11) under [section 5381(a)(11) of this title](/usc/12/5381.md?p=a-11) is arbitrary and capricious.
      - (iv) **Issuance of order—** If the [Court](/usc/12/5381.md?p=a-6) determines that the determination of the [Secretary](/usc/12/5301.md?p=14) that the [covered financial company](/usc/12/5381.md?p=a-8) is in [default](/usc/12/1467a.md?p=e-7-A) or [in danger of default](/usc/12/1467a.md?p=e-7-A) and satisfies the definition of a [financial company](/usc/12/5381.md?p=a-11) under [section 5381(a)(11) of this title](/usc/12/5381.md?p=a-11)—
        - (I) is not arbitrary and capricious, the [Court](/usc/12/5381.md?p=a-6) shall issue an order immediately authorizing the [Secretary](/usc/12/5301.md?p=14) to appoint the [Corporation](/usc/12/5301.md?p=7) as receiver of the [covered financial company](/usc/12/5381.md?p=a-8); or
        - (II) is arbitrary and capricious, the [Court](/usc/12/5381.md?p=a-6) shall immediately provide to the [Secretary](/usc/12/5301.md?p=14) a written statement of each reason supporting its determination, and afford the [Secretary](/usc/12/5301.md?p=14) an immediate opportunity to amend and refile the petition under [clause (i)](#a-1-A-i).
      - (v) **Petition granted by operation of law—** If the [Court](/usc/12/5381.md?p=a-6) does not make a determination within 24 hours of receipt of the petition—
        - (I) the petition shall be granted by operation of law;
        - (II) the [Secretary](/usc/12/5301.md?p=14) shall appoint the [Corporation](/usc/12/5301.md?p=7) as receiver; and
        - (III) liquidation under this subchapter shall automatically and without further notice or action be commenced and the [Corporation](/usc/12/5301.md?p=7) may immediately take all actions authorized under this subchapter.
    - (B) **Effect of determination—** The determination of the [Court](/usc/12/5381.md?p=a-6) under [subparagraph (A)](#a-1-A) shall be final, and shall be subject to appeal only in accordance with [paragraph (2)](#a-2). The decision shall not be subject to any stay or injunction pending appeal. Upon conclusion of its proceedings under [subparagraph (A)](#a-1-A), the [Court](/usc/12/5381.md?p=a-6) shall provide immediately for the record a written statement of each reason supporting the decision of the [Court](/usc/12/5381.md?p=a-6), and shall provide copies thereof to the [Secretary](/usc/12/5301.md?p=14) and the [covered financial company](/usc/12/5381.md?p=a-8).
    - (C) **Criminal penalties—** A [person](/usc/12/5481.md?p=19) who recklessly discloses a determination of the [Secretary](/usc/12/5301.md?p=14) under [section 5383(b) of this title](/usc/12/5383.md?p=b) or a petition of the [Secretary](/usc/12/5301.md?p=14) under [subparagraph (A)](#a-1-A), or the pendency of [court](/usc/12/5381.md?p=a-6) proceedings as provided for under [subparagraph (A)](#a-1-A), shall be fined not more than $250,000, or imprisoned for not more than 5 years, or both.
  - (2) **Appeal of decisions of the District Court—**
    - (A) **Appeal to Court of Appeals—**
      - (i) **In general—** Subject to [clause (ii)](#a-2-A-ii), the United States [Court](/usc/12/5381.md?p=a-6) of Appeals for the District of Columbia Circuit shall have jurisdiction of an appeal of a final decision of the [Court](/usc/12/5381.md?p=a-6) filed by the [Secretary](/usc/12/5301.md?p=14) or a [covered financial company](/usc/12/5381.md?p=a-8), through its [board](/usc/12/221a.md?p=a) of [directors](/usc/12/2279bb.md?p=3), notwithstanding [section 5390(a)(1)(A)(i) of this title](/usc/12/5390.md?p=a-1-A-i), not later than 30 days after the date on which the decision of the [Court](/usc/12/5381.md?p=a-6) is rendered or deemed rendered under this subsection.
      - (ii) **Condition of jurisdiction—** The [Court](/usc/12/5381.md?p=a-6) of Appeals shall have jurisdiction of an appeal by a [covered financial company](/usc/12/5381.md?p=a-8) only if the [covered financial company](/usc/12/5381.md?p=a-8) did not acquiesce or consent to the appointment of a receiver by the [Secretary](/usc/12/5301.md?p=14) under [paragraph (1)(A)](#a-1-A).
      - (iii) **Expedition—** The [Court](/usc/12/5381.md?p=a-6) of Appeals shall consider any appeal under this subparagraph on an expedited basis.
      - (iv) **Scope of review—** For an appeal taken under this subparagraph, review shall be limited to whether the determination of the [Secretary](/usc/12/5301.md?p=14) that a [covered financial company](/usc/12/5381.md?p=a-8) is in [default](/usc/12/1467a.md?p=e-7-A) or [in danger of default](/usc/12/1467a.md?p=e-7-A) and satisfies the definition of a [financial company](/usc/12/5381.md?p=a-11) under [section 5381(a)(11) of this title](/usc/12/5381.md?p=a-11) is arbitrary and capricious.
    - (B) **Appeal to the Supreme Court—**
      - (i) **In general—** A petition for a writ of certiorari to review a decision of the [Court](/usc/12/5381.md?p=a-6) of Appeals under [subparagraph (A)](#a-2-A) may be filed by the [Secretary](/usc/12/5301.md?p=14) or the [covered financial company](/usc/12/5381.md?p=a-8), through its [board](/usc/12/221a.md?p=a) of [directors](/usc/12/2279bb.md?p=3), notwithstanding [section 5390(a)(1)(A)(i) of this title](/usc/12/5390.md?p=a-1-A-i), with the Supreme [Court](/usc/12/5381.md?p=a-6) of the United States, not later than 30 days after the date of the final decision of the [Court](/usc/12/5381.md?p=a-6) of Appeals, and the Supreme [Court](/usc/12/5381.md?p=a-6) shall have discretionary jurisdiction to review such decision.
      - (ii) **Written statement—** In the event of a petition under [clause (i)](#a-2-B-i), the [Court](/usc/12/5381.md?p=a-6) of Appeals shall immediately provide for the record a written statement of each reason for its decision.
      - (iii) **Expedition—** The Supreme [Court](/usc/12/5381.md?p=a-6) shall consider any petition under this subparagraph on an expedited basis.
      - (iv) **Scope of review—** Review by the Supreme [Court](/usc/12/5381.md?p=a-6) under this subparagraph shall be limited to whether the determination of the [Secretary](/usc/12/5301.md?p=14) that the [covered financial company](/usc/12/5381.md?p=a-8) is in [default](/usc/12/1467a.md?p=e-7-A) or [in danger of default](/usc/12/1467a.md?p=e-7-A) and satisfies the definition of a [financial company](/usc/12/5381.md?p=a-11) under [section 5381(a)(11) of this title](/usc/12/5381.md?p=a-11) is arbitrary and capricious.
- (b) **Establishment and transmittal of rules and procedures—**
  - (1) **In general—** Not later than 6 months after July 21, 2010, the [Court](/usc/12/5381.md?p=a-6) shall establish such rules and procedures as may be necessary to ensure the orderly conduct of proceedings, [including](/usc/12/25b.md?p=a-3) rules and procedures to ensure that the 24-hour deadline is met and that the [Secretary](/usc/12/5301.md?p=14) shall have an ongoing opportunity to amend and refile petitions under [subsection (a)(1)](#a-1).
  - (2) **Publication of rules—** The rules and procedures established under [paragraph (1)](#b-1), and any modifications of such rules and procedures, shall be recorded and shall be transmitted to—
    - (A) the Committee on the Judiciary of the Senate;
    - (B) the Committee on Banking, Housing, and Urban Affairs of the Senate;
    - (C) the Committee on the Judiciary of the House of Representatives; and
    - (D) the Committee on Financial Services of the House of Representatives.
- (c) **Provisions applicable to financial companies—**
  - (1) **Bankruptcy Code—** Except as provided in this subsection, the provisions of the [Bankruptcy Code](/usc/12/5381.md?p=a-2) and rules issued thereunder or otherwise applicable insolvency law, and not the provisions of this subchapter, shall apply to [financial companies](/usc/12/5381.md?p=a-11) that are not [covered financial companies](/usc/12/5381.md?p=a-8) for which the [Corporation](/usc/12/5301.md?p=7) has been appointed as receiver.
  - (2) **This subchapter—** The provisions of this subchapter shall exclusively apply to and govern all matters relating to [covered financial companies](/usc/12/5381.md?p=a-8) for which the [Corporation](/usc/12/5301.md?p=7) is appointed as receiver, and no provisions of the [Bankruptcy Code](/usc/12/5381.md?p=a-2) or the rules issued thereunder shall apply in such cases, except as expressly provided in this subchapter.
- (d) **Time limit on receivership authority—**
  - (1) **Baseline period—** Any appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver under this section shall terminate at the end of the 3-year period beginning on the date on which such appointment is made.
  - (2) **Extension of time limit—** The time limit established in [paragraph (1)](#d-1) may be extended by the [Corporation](/usc/12/5301.md?p=7) for up to 1 additional year, if the Chairperson of the [Corporation](/usc/12/5301.md?p=7) determines and certifies in writing to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives that continuation of the receivership is necessary—
    - (A) to—
      - (i) maximize the net present value return from the sale or other disposition of the assets of the [covered financial company](/usc/12/5381.md?p=a-8); or
      - (ii) minimize the amount of loss realized upon the sale or other disposition of the assets of the [covered financial company](/usc/12/5381.md?p=a-8); and
    - (B) to protect the stability of the financial system of the United States.
  - (3) **Second extension of time limit—**
    - (A) **In general—** The time limit under this subsection, as extended under [paragraph (2)](#d-2), may be extended for up to 1 additional year, if the Chairperson of the [Corporation](/usc/12/5301.md?p=7), with the concurrence of the [Secretary](/usc/12/5301.md?p=14), submits the certifications described in [paragraph (2)](#d-2).
    - (B) **Additional report required—** Not later than 30 days after the date of commencement of the extension under [subparagraph (A)](#d-3-A), the [Corporation](/usc/12/5301.md?p=7) shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives describing the need for the extension and the specific plan of the [Corporation](/usc/12/5301.md?p=7) to conclude the receivership before the end of the second extension.
  - (4) **Ongoing litigation—** The time limit under this subsection, as extended under [paragraph (3)](#d-3), may be further extended solely for the purpose of completing ongoing litigation in which the [Corporation](/usc/12/5301.md?p=7) as receiver is a party, provided that the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver shall terminate not later than 90 days after the date of completion of such litigation, if—
    - (A) the [Council](/usc/12/5301.md?p=8) determines that the [Corporation](/usc/12/5301.md?p=7) used its best efforts to conclude the receivership in accordance with its plan before the end of the time limit described in [paragraph (3)](#d-3);
    - (B) the [Council](/usc/12/5301.md?p=8) determines that the completion of longer-term responsibilities in the form of ongoing litigation justifies the need for an extension; and
    - (C) the [Corporation](/usc/12/5301.md?p=7) submits a report approved by the [Council](/usc/12/5301.md?p=8) not later than 30 days after the date of the determinations by the [Council](/usc/12/5301.md?p=8) under subparagraphs [(A)](#d-4-A) and [(B)](#d-4-B) to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, describing—
      - (i) the ongoing litigation justifying the need for an extension; and
      - (ii) the specific plan of the [Corporation](/usc/12/5301.md?p=7) to complete the litigation and conclude the receivership.
  - (5) **Regulations—** The [Corporation](/usc/12/5301.md?p=7) may issue regulations governing the termination of receiverships under this subchapter.
  - (6) **No liability—** The [Corporation](/usc/12/5301.md?p=7) and the [Deposit Insurance Fund](/usc/12/1813.md?p=y-1) shall not be liable for unresolved [claims](/usc/12/5381.md?p=a-4) arising from the receivership after the termination of the receivership.
- (e) **Study of bankruptcy and orderly liquidation process for financial companies—**
  - (1) **Study—**
    - (A) **In general—** The Administrative [Office](/usc/12/2279bb.md?p=4) of the United States [Courts](/usc/12/5381.md?p=a-6) and the Comptroller General of the United States shall each monitor the activities of the [Court](/usc/12/5381.md?p=a-6), and each such [Office](/usc/12/2279bb.md?p=4) shall conduct separate studies regarding the bankruptcy and orderly liquidation process for [financial companies](/usc/12/5381.md?p=a-11) under the [Bankruptcy Code](/usc/12/5381.md?p=a-2).
    - (B) **Issues to be studied—** In conducting the study under [subparagraph (A)](#e-1-A), the Administrative [Office](/usc/12/2279bb.md?p=4) of the United States [Courts](/usc/12/5381.md?p=a-6) and the Comptroller General of the United States each shall evaluate—
      - (i) the effectiveness of [chapter 7](/usc/12/ch7.md) or [chapter 11](/usc/12/ch11.md) of the [Bankruptcy Code](/usc/12/5381.md?p=a-2) in facilitating the orderly liquidation or reorganization of [financial companies](/usc/12/5381.md?p=a-11);
      - (ii) ways to maximize the efficiency and effectiveness of the [Court](/usc/12/5381.md?p=a-6); and
      - (iii) ways to make the orderly liquidation process under the [Bankruptcy Code](/usc/12/5381.md?p=a-2) for [financial companies](/usc/12/5381.md?p=a-11) more effective.
  - (2) **Reports—** Not later than 1 year after July 21, 2010, in each successive year until the third year, and every fifth year after that date, the Administrative [Office](/usc/12/2279bb.md?p=4) of the United States [Courts](/usc/12/5381.md?p=a-6) and the Comptroller General of the United States shall submit to the Committee on Banking, Housing, and Urban Affairs and the Committee on the Judiciary of the Senate and the Committee on Financial Services and the Committee on the Judiciary of the House of Representatives separate reports summarizing the results of the studies conducted under [paragraph (1)](#e-1).
- (f) **Study of international coordination relating to bankruptcy process for financial companies—**
  - (1) **Study—**
    - (A) **In general—** The Comptroller General of the United States shall conduct a study regarding international coordination relating to the orderly liquidation of [financial companies](/usc/12/5381.md?p=a-11) under the [Bankruptcy Code](/usc/12/5381.md?p=a-2).
    - (B) **Issues to be studied—** In conducting the study under [subparagraph (A)](#f-1-A), the Comptroller General of the United States shall evaluate, with respect to the bankruptcy process for [financial companies](/usc/12/5381.md?p=a-11)—
      - (i) the extent to which international coordination currently exists;
      - (ii) current mechanisms and structures for facilitating international cooperation;
      - (iii) barriers to effective international coordination; and
      - (iv) ways to increase and make more effective international coordination.
  - (2) **Report—** Not later than 1 year after July 21, 2010, the Comptroller General of the United States shall submit to the Committee on Banking, Housing, and Urban Affairs and the Committee on the Judiciary of the Senate and the Committee on Financial Services and the Committee on the Judiciary of the House of Representatives and the [Secretary](/usc/12/5301.md?p=14) a report summarizing the results of the study conducted under [paragraph (1)](#f-1).
- (g) **Study of prompt corrective action implementation by the appropriate Federal agencies—**
  - (1) **Study—** The Comptroller General of the United States shall conduct a study regarding the implementation of prompt corrective action by the [appropriate Federal banking agencies](/usc/12/24a.md?p=g-2).
  - (2) **Issues to be studied—** In conducting the study under [paragraph (1)](#g-1), the Comptroller General shall evaluate—
    - (A) the effectiveness of implementation of prompt corrective action by the [appropriate Federal banking agencies](/usc/12/24a.md?p=g-2) and the resolution of [insured depository institutions](/usc/12/24a.md?p=g-2) by the [Corporation](/usc/12/5301.md?p=7); and
    - (B) ways to make prompt corrective action a more effective tool to resolve the [insured depository institutions](/usc/12/24a.md?p=g-2) at the least possible long-term cost to the [Deposit Insurance Fund](/usc/12/1813.md?p=y-1).
  - (3) **Report to Council—** Not later than 1 year after July 21, 2010, the Comptroller General shall submit a report to the [Council](/usc/12/5301.md?p=8) on the results of the study conducted under this subsection.
  - (4) **Council report of action—** Not later than 6 months after the date of receipt of the report from the Comptroller General under [paragraph (3)](#g-3), the [Council](/usc/12/5301.md?p=8) shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on actions taken in response to the report, [including](/usc/12/25b.md?p=a-3) any recommendations made to the Federal [primary financial regulatory agencies](/usc/12/5301.md?p=12) under [section 5330 of this title](/usc/12/5330.md).

# §5383. Systemic risk determination

- (a) **Written recommendation and determination—**
  - (1) **Vote required—**
    - (A) **In general—** On their own initiative, or at the request of the [Secretary](/usc/12/5301.md?p=14), the [Corporation](/usc/12/5301.md?p=7) and the [Board of Governors](/usc/12/5301.md?p=3) shall consider whether to make a written recommendation described in [paragraph (2)](#a-2) with respect to whether the [Secretary](/usc/12/5301.md?p=14) should appoint the [Corporation](/usc/12/5301.md?p=7) as receiver for a [financial company](/usc/12/5381.md?p=a-11). Such recommendation shall be made upon a vote of not fewer than ⅔ of the [members](/usc/12/1426a.md?p=g-1) of the [Board of Governors](/usc/12/5301.md?p=3) then serving and ⅔ of the [members](/usc/12/1426a.md?p=g-1) of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/2279bb.md?p=3) of the [Corporation](/usc/12/5301.md?p=7) then serving.
    - (B) **Cases involving brokers or dealers—** In the case of a broker or dealer, or in which the largest United States [subsidiary](/usc/12/24a.md?p=g-1) (as measured by total assets as of the end of the previous calendar quarter) of a [financial company](/usc/12/5381.md?p=a-11) is a broker or dealer, the [Commission](/usc/12/5301.md?p=5) and the [Board of Governors](/usc/12/5301.md?p=3), at the request of the [Secretary](/usc/12/5301.md?p=14), or on their own initiative, shall consider whether to make the written recommendation described in [paragraph (2)](#a-2) with respect to the [financial company](/usc/12/5381.md?p=a-11). Subject to the requirements in [paragraph (2)](#a-2), such recommendation shall be made upon a vote of not fewer than ⅔ of the [members](/usc/12/1426a.md?p=g-1) of the [Board of Governors](/usc/12/5301.md?p=3) then serving and ⅔ of the [members](/usc/12/1426a.md?p=g-1) of the [Commission](/usc/12/5301.md?p=5) then serving, and in consultation with the [Corporation](/usc/12/5301.md?p=7).
    - (C) **Cases involving insurance companies—** In the case of an [insurance company](/usc/12/5381.md?p=a-13), or in which the largest United States [subsidiary](/usc/12/24a.md?p=g-1) (as measured by total assets as of the end of the previous calendar quarter) of a [financial company](/usc/12/5381.md?p=a-11) is an [insurance company](/usc/12/5381.md?p=a-13), the [Director](/usc/12/2279bb.md?p=3) of the Federal Insurance [Office](/usc/12/2279bb.md?p=4) and the [Board of Governors](/usc/12/5301.md?p=3), at the request of the [Secretary](/usc/12/5301.md?p=14) or on their own initiative, shall consider whether to make the written recommendation described in [paragraph (2)](#a-2) with respect to the [financial company](/usc/12/5381.md?p=a-11). Subject to the requirements in [paragraph (2)](#a-2), such recommendation shall be made upon a vote of not fewer than ⅔ of the [Board of Governors](/usc/12/5301.md?p=3) then serving and the affirmative approval of the [Director](/usc/12/2279bb.md?p=3) of the Federal Insurance [Office](/usc/12/2279bb.md?p=4), and in consultation with the [Corporation](/usc/12/5301.md?p=7).
  - (2) **Recommendation required—** Any written recommendation pursuant to [paragraph (1)](#a-1) shall contain—
    - (A) an evaluation of whether the [financial company](/usc/12/5381.md?p=a-11) is in [default](/usc/12/1467a.md?p=e-7-A) or [in danger of default](/usc/12/1467a.md?p=e-7-A);
    - (B) a description of the effect that the [default](/usc/12/1467a.md?p=e-7-A) of the [financial company](/usc/12/5381.md?p=a-11) would have on financial stability in the United States;
    - (C) a description of the effect that the [default](/usc/12/1467a.md?p=e-7-A) of the [financial company](/usc/12/5381.md?p=a-11) would have on economic conditions or financial stability for low income, minority, or underserved communities;
    - (D) a recommendation regarding the nature and the extent of actions to be taken under this subchapter regarding the [financial company](/usc/12/5381.md?p=a-11);
    - (E) an evaluation of the likelihood of a private sector alternative to prevent the [default](/usc/12/1467a.md?p=e-7-A) of the [financial company](/usc/12/5381.md?p=a-11);
    - (F) an evaluation of why a case under the [Bankruptcy Code](/usc/12/5381.md?p=a-2) is not appropriate for the [financial company](/usc/12/5381.md?p=a-11);
    - (G) an evaluation of the effects on creditors, counterparties, and shareholders of the [financial company](/usc/12/5381.md?p=a-11) and other market participants; and
    - (H) an evaluation of whether the [company](/usc/12/24a.md?p=g-1) satisfies the definition of a [financial company](/usc/12/5381.md?p=a-11) under [section 5381 of this title](/usc/12/5381.md).
- (b) **Determination by the Secretary—** Notwithstanding any other provision of Federal or [State](/usc/12/5301.md?p=16) law, the [Secretary](/usc/12/5301.md?p=14) shall take action in accordance with [section 5382(a)(1)(A) of this title](/usc/12/5382.md?p=a-1-A), if, upon the written recommendation under [subsection (a)](#a), the [Secretary](/usc/12/5301.md?p=14) (in consultation with the President) determines that—
  - (1) the [financial company](/usc/12/5381.md?p=a-11) is in [default](/usc/12/1467a.md?p=e-7-A) or [in danger of default](/usc/12/1467a.md?p=e-7-A);
  - (2) the failure of the [financial company](/usc/12/5381.md?p=a-11) and its resolution under otherwise applicable Federal or [State](/usc/12/5301.md?p=16) law would have serious adverse effects on financial stability in the United States;
  - (3) no viable private sector alternative is available to prevent the [default](/usc/12/1467a.md?p=e-7-A) of the [financial company](/usc/12/5381.md?p=a-11);
  - (4) any effect on the [claims](/usc/12/5381.md?p=a-4) or interests of creditors, counterparties, and shareholders of the [financial company](/usc/12/5381.md?p=a-11) and other market participants as a result of actions to be taken under this subchapter is appropriate, given the impact that any action taken under this subchapter would have on financial stability in the United States;
  - (5) any action under [section 5384 of this title](/usc/12/5384.md) would avoid or mitigate such adverse effects, taking into consideration the effectiveness of the action in mitigating potential adverse effects on the financial system, the cost to the general [fund](/usc/12/4702.md?p=10) of the Treasury, and the potential to increase excessive risk taking on the part of creditors, counterparties, and shareholders in the [financial company](/usc/12/5381.md?p=a-11);
  - (6) a Federal regulatory [agency](/usc/12/1422.md?p=12) has ordered the [financial company](/usc/12/5381.md?p=a-11) to convert all of its convertible debt instruments that are subject to the regulatory order; and
  - (7) the [company](/usc/12/24a.md?p=g-1) satisfies the definition of a [financial company](/usc/12/5381.md?p=a-11) under [section 5381 of this title](/usc/12/5381.md).
- (c) **Documentation and review—**
  - (1) **In general—** The [Secretary](/usc/12/5301.md?p=14) shall—
    - (A) document any determination under [subsection (b)](#b);
    - (B) retain the documentation for review under [paragraph (2)](#c-2); and
    - (C) notify the [covered financial company](/usc/12/5381.md?p=a-8) and the [Corporation](/usc/12/5301.md?p=7) of such determination.
  - (2) **Report to Congress—** Not later than 24 hours after the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), the [Secretary](/usc/12/5301.md?p=14) shall provide written notice of the recommendations and determinations reached in accordance with subsections [(a)](#a) and [(b)](#b) to the Majority Leader and the Minority Leader of the Senate and the Speaker and the Minority Leader of the House of Representatives, the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Committee on Financial Services of the House of Representatives, which shall consist of a summary of the basis for the determination, [including](/usc/12/25b.md?p=a-3), to the extent available at the time of the determination—
    - (A) the size and financial condition of the [covered financial company](/usc/12/5381.md?p=a-8);
    - (B) the sources of [capital](/usc/12/51c.md) and [credit](/usc/12/5481.md?p=7) support that were available to the [covered financial company](/usc/12/5381.md?p=a-8);
    - (C) the operations of the [covered financial company](/usc/12/5381.md?p=a-8) that could have had a significant impact on financial stability, markets, or both;
    - (D) identification of the [banks](/usc/12/221a.md?p=a) and [financial companies](/usc/12/5381.md?p=a-11) which may be able to provide the services offered by the [covered financial company](/usc/12/5381.md?p=a-8);
    - (E) any potential international ramifications of resolution of the [covered financial company](/usc/12/5381.md?p=a-8) under other applicable insolvency law;
    - (F) an estimate of the potential effect of the resolution of the [covered financial company](/usc/12/5381.md?p=a-8) under other applicable insolvency law on the financial stability of the United States;
    - (G) the potential effect of the appointment of a receiver by the [Secretary](/usc/12/5301.md?p=14) on [consumers](/usc/12/5481.md?p=4);
    - (H) the potential effect of the appointment of a receiver by the [Secretary](/usc/12/5301.md?p=14) on the financial system, financial markets, and [banks](/usc/12/221a.md?p=a) and other [financial companies](/usc/12/5381.md?p=a-11); and
    - (I) whether resolution of the [covered financial company](/usc/12/5381.md?p=a-8) under other applicable insolvency law would cause [banks](/usc/12/221a.md?p=a) or other [financial companies](/usc/12/5381.md?p=a-11) to experience severe liquidity distress.
  - (3) **Reports to Congress and the public—**
    - (A) **In general—** Not later than 60 days after the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), the [Corporation](/usc/12/5301.md?p=7) shall file a report with the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives—
      - (i) setting forth information on the financial condition of the [covered financial company](/usc/12/5381.md?p=a-8) as of the date of the appointment, [including](/usc/12/25b.md?p=a-3) a description of its assets and liabilities;
      - (ii) describing the plan of, and actions taken by, the [Corporation](/usc/12/5301.md?p=7) to wind down the [covered financial company](/usc/12/5381.md?p=a-8);
      - (iii) explaining each instance in which the [Corporation](/usc/12/5301.md?p=7) waived any applicable requirements of [part 366 of title 12, Code of Federal Regulations](/cfr/12/part366.md) (or any successor thereto) with respect to conflicts of interest by [any person](/usc/12/1715z–4a.md?p=a-2) in the private sector who was retained to provide services to the [Corporation](/usc/12/5301.md?p=7) in connection with such receivership;
      - (iv) describing the reasons for the provision of any funding to the receivership out of the [Fund](/usc/12/4702.md?p=10);
      - (v) setting forth the expected costs of the orderly liquidation of the [covered financial company](/usc/12/5381.md?p=a-8);
      - (vi) setting forth the identity of any claimant that is treated in a manner different from other similarly situated claimants under subsection [(b)(4)](#b-4), (d)(4), or (h)(5)(E), the amount of any additional payment to such claimant under subsection (d)(4), and the reason for any such action; and
      - (vii) which report the [Corporation](/usc/12/5301.md?p=7) shall publish on an online website maintained by the [Corporation](/usc/12/5301.md?p=7), subject to maintaining appropriate confidentiality.
    - (B) **Amendments—** The [Corporation](/usc/12/5301.md?p=7) shall, on a timely basis, not less frequently than quarterly, amend or revise and resubmit the reports prepared under this paragraph, as necessary.
    - (C) **Congressional testimony—** The [Corporation](/usc/12/5301.md?p=7) and the [primary financial regulatory agency](/usc/12/5301.md?p=12), if any, of the [financial company](/usc/12/5381.md?p=a-11) for which the [Corporation](/usc/12/5301.md?p=7) was appointed receiver under this subchapter shall appear before Congress, if requested, not later than 30 days after the date on which the [Corporation](/usc/12/5301.md?p=7) first files the reports required under [subparagraph (A)](#c-3-A).
  - (4) **Default or in danger of default—** For purposes of this subchapter, a [financial company](/usc/12/5381.md?p=a-11) shall be considered to be in [default](/usc/12/1467a.md?p=e-7-A) or [in danger of default](/usc/12/1467a.md?p=e-7-A) if, as determined in accordance with [subsection (b)](#b)—
    - (A) a case has been, or likely will promptly be, commenced with respect to the [financial company](/usc/12/5381.md?p=a-11) under the [Bankruptcy Code](/usc/12/5381.md?p=a-2);
    - (B) the [financial company](/usc/12/5381.md?p=a-11) has incurred, or is likely to incur, losses that will deplete all or substantially all of its [capital](/usc/12/51c.md), and there is no reasonable prospect for the [company](/usc/12/24a.md?p=g-1) to avoid such depletion;
    - (C) the assets of the [financial company](/usc/12/5381.md?p=a-11) are, or are likely to be, less than its obligations to creditors and others; or
    - (D) the [financial company](/usc/12/5381.md?p=a-11) is, or is likely to be, unable to pay its obligations (other than those subject to a bona fide dispute) in the normal course of business.
  - (5) **GAO review—** The Comptroller General of the United States shall review and report to Congress on any determination under [subsection (b)](#b), that results in the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver, [including](/usc/12/25b.md?p=a-3)—
    - (A) the basis for the determination;
    - (B) the purpose for which any action was taken pursuant thereto;
    - (C) the likely effect of the determination and such action on the incentives and conduct of [financial companies](/usc/12/5381.md?p=a-11) and their creditors, counterparties, and shareholders; and
    - (D) the likely disruptive effect of the determination and such action on the reasonable expectations of creditors, counterparties, and shareholders, taking into account the impact any action under this subchapter would have on financial stability in the United States, [including](/usc/12/25b.md?p=a-3) whether the rights of such parties will be disrupted.
- (d) **Corporation policies and procedures—** As soon as is practicable after July 21, 2010, the [Corporation](/usc/12/5301.md?p=7) shall establish policies and procedures that are acceptable to the [Secretary](/usc/12/5301.md?p=14) governing the use of [funds](/usc/12/4702.md?p=10) available to the [Corporation](/usc/12/5301.md?p=7) to carry out this subchapter, [including](/usc/12/25b.md?p=a-3) the terms and conditions for the provision and use of [funds](/usc/12/4702.md?p=10) under sections [5384(d)](/usc/12/5384.md?p=d), [5390(h)(2)(G)(iv)](/usc/12/5390.md?p=h-2-G-iv), and [5390(h)(9)](/usc/12/5390.md?p=h-9) of this title.
- (e) **Treatment of insurance companies and insurance company subsidiaries—**
  - (1) **In general—** Notwithstanding [subsection (b)](#b), if an [insurance company](/usc/12/5381.md?p=a-13) is a [covered financial company](/usc/12/5381.md?p=a-8) or a [subsidiary](/usc/12/24a.md?p=g-1) or [affiliate](/usc/12/24a.md?p=g-1) of a [covered financial company](/usc/12/5381.md?p=a-8), the liquidation or rehabilitation of such [insurance company](/usc/12/5381.md?p=a-13), and any [subsidiary](/usc/12/24a.md?p=g-1) or [affiliate](/usc/12/24a.md?p=g-1) of such [company](/usc/12/24a.md?p=g-1) that is not excepted under [paragraph (2)](#e-2), shall be conducted as provided under applicable [State](/usc/12/5301.md?p=16) law.
  - (2) **Exception for subsidiaries and affiliates—** The requirement of [paragraph (1)](#e-1) shall not apply with respect to any [subsidiary](/usc/12/24a.md?p=g-1) or [affiliate](/usc/12/24a.md?p=g-1) of an [insurance company](/usc/12/5381.md?p=a-13) that is not itself an [insurance company](/usc/12/5381.md?p=a-13).
  - (3) **Backup authority—** Notwithstanding [paragraph (1)](#e-1), with respect to a [covered financial company](/usc/12/5381.md?p=a-8) described in [paragraph (1)](#e-1), if, after the end of the 60-day period beginning on the date on which a determination is made under [section 5382(a) of this title](/usc/12/5382.md?p=a) with respect to such [company](/usc/12/24a.md?p=g-1), the appropriate regulatory [agency](/usc/12/1422.md?p=12) has not filed the appropriate judicial action in the appropriate [State](/usc/12/5301.md?p=16) [court](/usc/12/5381.md?p=a-6) to place such [company](/usc/12/24a.md?p=g-1) into orderly liquidation or rehabilitation under the laws and requirements of the [State](/usc/12/5301.md?p=16), the [Corporation](/usc/12/5301.md?p=7) shall have the authority to stand in the place of the appropriate regulatory [agency](/usc/12/1422.md?p=12) and file the appropriate judicial action in the appropriate [State](/usc/12/5301.md?p=16) [court](/usc/12/5381.md?p=a-6) to place such [company](/usc/12/24a.md?p=g-1) into orderly liquidation or rehabilitation under the laws and requirements of the [State](/usc/12/5301.md?p=16).

# §5384. Orderly liquidation of covered financial companies

- (a) **Purpose of orderly liquidation authority—** It is the purpose of this subchapter to provide the necessary authority to liquidate failing [financial companies](/usc/12/5381.md?p=a-11) that pose a significant risk to the financial stability of the United States in a manner that mitigates such risk and minimizes moral hazard. The authority provided in this subchapter shall be exercised in the manner that best fulfills such purpose, so that—
  - (1) creditors and shareholders will bear the losses of the [financial company](/usc/12/5381.md?p=a-11);
  - (2) management responsible for the condition of the [financial company](/usc/12/5381.md?p=a-11) will not be retained; and
  - (3) the [Corporation](/usc/12/5301.md?p=7) and other appropriate [agencies](/usc/12/1422.md?p=12) will take all steps necessary and appropriate to assure that all parties, [including](/usc/12/25b.md?p=a-3) management, [directors](/usc/12/2279bb.md?p=3), and third parties, having responsibility for the condition of the [financial company](/usc/12/5381.md?p=a-11) bear losses consistent with their responsibility, [including](/usc/12/25b.md?p=a-3) actions for damages, restitution, and recoupment of compensation and other gains not compatible with such responsibility.
- (b) **Corporation as receiver—** Upon the appointment of the [Corporation](/usc/12/5301.md?p=7) under [section 5382 of this title](/usc/12/5382.md), the [Corporation](/usc/12/5301.md?p=7) shall act as the receiver for the [covered financial company](/usc/12/5381.md?p=a-8), with all of the rights and obligations set forth in this subchapter.
- (c) **Consultation—** The [Corporation](/usc/12/5301.md?p=7), as receiver—
  - (1) shall consult with the [primary financial regulatory agency](/usc/12/5301.md?p=12) or [agencies](/usc/12/1422.md?p=12) of the [covered financial company](/usc/12/5381.md?p=a-8) and its [covered subsidiaries](/usc/12/5381.md?p=a-9) for purposes of ensuring an orderly liquidation of the [covered financial company](/usc/12/5381.md?p=a-8);
  - (2) may consult with, or under subsection (a)(1)(B)(v) or (a)(1)(L) of [section 5390 of this title](/usc/12/5390.md), [acquire](/usc/12/1467a.md?p=a-1-J) the services of, any outside experts, as appropriate to inform and aid the [Corporation](/usc/12/5301.md?p=7) in the orderly liquidation process;
  - (3) shall consult with the [primary financial regulatory agency](/usc/12/5301.md?p=12) or [agencies](/usc/12/1422.md?p=12) of any [subsidiaries](/usc/12/24a.md?p=g-1) of the [covered financial company](/usc/12/5381.md?p=a-8) that are not [covered subsidiaries](/usc/12/5381.md?p=a-9), and coordinate with such regulators regarding the treatment of such solvent [subsidiaries](/usc/12/24a.md?p=g-1) and the separate resolution of any such insolvent [subsidiaries](/usc/12/24a.md?p=g-1) under other governmental authority, as appropriate; and
  - (4) shall consult with the [Commission](/usc/12/5301.md?p=5) and the Securities Investor Protection [Corporation](/usc/12/5301.md?p=7) in the case of any [covered financial company](/usc/12/5381.md?p=a-8) for which the [Corporation](/usc/12/5301.md?p=7) has been appointed as receiver that is a broker or dealer registered with the [Commission](/usc/12/5301.md?p=5) under [section 78o(b)](/usc/15/78o.md?p=b) of title 15 and is a [member](/usc/12/1426a.md?p=g-1) of the Securities Investor Protection [Corporation](/usc/12/5301.md?p=7), for the purpose of determining whether to transfer to a [bridge financial company](/usc/12/5381.md?p=a-3) organized by the [Corporation](/usc/12/5301.md?p=7) as receiver, without consent of any [customer](/usc/12/5381.md?p=a-10), [customer](/usc/12/5381.md?p=a-10) accounts of the [covered financial company](/usc/12/5381.md?p=a-8).
- (d) **Funding for orderly liquidation—** Upon its appointment as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), and thereafter as the [Corporation](/usc/12/5301.md?p=7) may, in its discretion, determine to be necessary or appropriate, the [Corporation](/usc/12/5301.md?p=7) may make available to the receivership, subject to the conditions set forth in [section 5386 of this title](/usc/12/5386.md) and subject to the plan described in [section 5390(n)(9) of this title](/usc/12/5390.md?p=n-9), [funds](/usc/12/4702.md?p=10) for the orderly liquidation of the [covered financial company](/usc/12/5381.md?p=a-8). All [funds](/usc/12/4702.md?p=10) provided by the [Corporation](/usc/12/5301.md?p=7) under this subsection shall have a priority of [claims](/usc/12/5381.md?p=a-4) under subparagraph (A) or (B) of [section 5390(b)(1) of this title](/usc/12/5390.md?p=b-1), as applicable, [including](/usc/12/25b.md?p=a-3) [funds](/usc/12/4702.md?p=10) used for—
  - (1) making loans to, or purchasing any debt obligation of, the [covered financial company](/usc/12/5381.md?p=a-8) or any [covered subsidiary](/usc/12/5381.md?p=a-9);
  - (2) purchasing or guaranteeing against loss the assets of the [covered financial company](/usc/12/5381.md?p=a-8) or any [covered subsidiary](/usc/12/5381.md?p=a-9), directly or through an entity established by the [Corporation](/usc/12/5301.md?p=7) for such purpose;
  - (3) assuming or guaranteeing the obligations of the [covered financial company](/usc/12/5381.md?p=a-8) or any [covered subsidiary](/usc/12/5381.md?p=a-9) to 1 or more third parties;
  - (4) taking a lien on any or all assets of the [covered financial company](/usc/12/5381.md?p=a-8) or any [covered subsidiary](/usc/12/5381.md?p=a-9), [including](/usc/12/25b.md?p=a-3) a first priority lien on all unencumbered assets of the [covered financial company](/usc/12/5381.md?p=a-8) or any [covered subsidiary](/usc/12/5381.md?p=a-9) to secure repayment of any transactions conducted under this subsection, except that, if the [covered financial company](/usc/12/5381.md?p=a-8) or [covered subsidiary](/usc/12/5381.md?p=a-9) is an [insurance company](/usc/12/5381.md?p=a-13) or a [subsidiary](/usc/12/24a.md?p=g-1) of an [insurance company](/usc/12/5381.md?p=a-13), the [Corporation](/usc/12/5301.md?p=7)—
    - (A) shall promptly notify the [State](/usc/12/5301.md?p=16) insurance authority for the [insurance company](/usc/12/5381.md?p=a-13) of the intention to take such lien; and
    - (B) may only take such lien—
      - (i) to secure repayment of [funds](/usc/12/4702.md?p=10) made available to such [covered financial company](/usc/12/5381.md?p=a-8) or [covered subsidiary](/usc/12/5381.md?p=a-9); and
      - (ii) if the [Corporation](/usc/12/5301.md?p=7) determines, after consultation with the [State](/usc/12/5301.md?p=16) insurance authority, that such lien will not unduly impede or delay the liquidation or rehabilitation of the [insurance company](/usc/12/5381.md?p=a-13), or the recovery by its policyholders;
  - (5) selling or transferring all, or any part, of such acquired assets, liabilities, or obligations of the [covered financial company](/usc/12/5381.md?p=a-8) or any [covered subsidiary](/usc/12/5381.md?p=a-9); and
  - (6) making payments pursuant to subsections (b)(4), (d)(4), and (h)(5)(E) of [section 5390 of this title](/usc/12/5390.md).

# §5385. Orderly liquidation of covered brokers and dealers

- (a) **Appointment of SIPC as trustee—**
  - (1) **Appointment—** Upon the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver for any [covered broker or dealer](/usc/12/5381.md?p=a-7), the [Corporation](/usc/12/5301.md?p=7) shall appoint, without any need for [court](/usc/12/5381.md?p=a-6) approval, the Securities Investor Protection [Corporation](/usc/12/5301.md?p=7) to act as trustee for the liquidation under the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.) of the [covered broker or dealer](/usc/12/5381.md?p=a-7).
  - (2) **Actions by SIPC—**
    - (A) **Filing—** Upon appointment of [SIPC](/usc/12/5381.md?p=a-16) under [paragraph (1)](#a-1), [SIPC](/usc/12/5381.md?p=a-16) shall promptly file with any Federal [district](/usc/12/221a.md?p=a) [court](/usc/12/5381.md?p=a-6) of competent jurisdiction specified in section [78u](/usc/15/78u.md) or [78aa](/usc/15/78aa.md) of title 15, an application for a protective decree under the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.) as to the [covered broker or dealer](/usc/12/5381.md?p=a-7). The Federal [district](/usc/12/221a.md?p=a) [court](/usc/12/5381.md?p=a-6) shall accept and approve the filing, [including](/usc/12/25b.md?p=a-3) outside of normal business hours, and shall immediately issue the protective decree as to the [covered broker or dealer](/usc/12/5381.md?p=a-7).
    - (B) **Administration by SIPC—** Following entry of the protective decree, and except as otherwise provided in this section, the determination of [claims](/usc/12/5381.md?p=a-4) and the liquidation of assets retained in the receivership of the [covered broker or dealer](/usc/12/5381.md?p=a-7) and not transferred to the [bridge financial company](/usc/12/5381.md?p=a-3) shall be administered under the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.) by [SIPC](/usc/12/5381.md?p=a-16), as trustee for the [covered broker or dealer](/usc/12/5381.md?p=a-7).
    - (C) **Definition of filing date—** For purposes of the liquidation proceeding, the term “filing date” means the date on which the [Corporation](/usc/12/5301.md?p=7) is appointed as receiver of the [covered broker or dealer](/usc/12/5381.md?p=a-7).
    - (D) **Determination of claims—** As trustee for the [covered broker or dealer](/usc/12/5381.md?p=a-7), [SIPC](/usc/12/5381.md?p=a-16) shall determine and satisfy, consistent with this subchapter and with the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.), all [claims](/usc/12/5381.md?p=a-4) against the [covered broker or dealer](/usc/12/5381.md?p=a-7) arising on or before the [filing date](#a-2-C).
- (b) **Powers and duties of SIPC—**
  - (1) **In general—** Except as provided in this section, upon its appointment as trustee for the liquidation of a [covered broker or dealer](/usc/12/5381.md?p=a-7), [SIPC](/usc/12/5381.md?p=a-16) shall have all of the powers and duties provided by the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.), [including](/usc/12/25b.md?p=a-3), without limitation, all rights of action against third parties, and shall conduct such liquidation in accordance with the terms of the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.), except that [SIPC](/usc/12/5381.md?p=a-16) shall have no powers or duties with respect to assets and liabilities transferred by the [Corporation](/usc/12/5301.md?p=7) from the [covered broker or dealer](/usc/12/5381.md?p=a-7) to any [bridge financial company](/usc/12/5381.md?p=a-3) established in accordance with this subchapter.
  - (2) **Limitation of powers—** The exercise by [SIPC](/usc/12/5381.md?p=a-16) of powers and functions as trustee under [subsection (a)](#a) shall not impair or impede the exercise of the powers and duties of the [Corporation](/usc/12/5301.md?p=7) with regard to—
    - (A) any action, except as otherwise provided in this subchapter—
      - (i) to make [funds](/usc/12/4702.md?p=10) available under [section 5384(d) of this title](/usc/12/5384.md?p=d);
      - (ii) to organize, establish, operate, or terminate any [bridge financial company](/usc/12/5381.md?p=a-3);
      - (iii) to transfer assets and liabilities;
      - (iv) to enforce or repudiate contracts; or
      - (v) to take any other action relating to such [bridge financial company](/usc/12/5381.md?p=a-3) under [section 5390 of this title](/usc/12/5390.md); or
    - (B) determining [claims](/usc/12/5381.md?p=a-4) under [subsection (e)](#e).
  - (3) **Protective decree—** [SIPC](/usc/12/5381.md?p=a-16) and the [Corporation](/usc/12/5301.md?p=7), in consultation with the [Commission](/usc/12/5301.md?p=5), shall jointly determine the terms of the protective decree to be filed by [SIPC](/usc/12/5381.md?p=a-16) with any [court](/usc/12/5381.md?p=a-6) of competent jurisdiction under section [78u](/usc/15/78u.md) or [78aa](/usc/15/78aa.md) of title 15, as required by [subsection (a)](#a).
  - (4) **Qualified financial contracts—** Notwithstanding any provision of the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.) to the contrary ([including](/usc/12/25b.md?p=a-3) [section 5(b)(2)(C)](/usc/12/5.md) of that Act ([15 U.S.C. 78eee(b)(2)(C)](/usc/15/78eee.md?p=b-2-C))), the rights and obligations of any party to a qualified financial contract (as that term is defined in [section 5390(c)(8) of this title](/usc/12/5390.md?p=c-8)) to which a [covered broker or dealer](/usc/12/5381.md?p=a-7) for which the [Corporation](/usc/12/5301.md?p=7) has been appointed receiver is a party shall be governed exclusively by [section 5390 of this title](/usc/12/5390.md), [including](/usc/12/25b.md?p=a-3) the limitations and restrictions contained in [section 5390(c)(10)(B) of this title](/usc/12/5390.md?p=c-10-B).
- (c) **Limitation on court action—** Except as otherwise provided in this subchapter, no [court](/usc/12/5381.md?p=a-6) may take any action, [including](/usc/12/25b.md?p=a-3) any action pursuant to the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.) or the [Bankruptcy Code](/usc/12/5381.md?p=a-2), to restrain or affect the exercise of powers or functions of the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered broker or dealer](/usc/12/5381.md?p=a-7) and any [claims](/usc/12/5381.md?p=a-4) against the [Corporation](/usc/12/5301.md?p=7) as such receiver shall be determined in accordance with [subsection (e)](#e) and such [claims](/usc/12/5381.md?p=a-4) shall be limited to money damages.
- (d) **Actions by Corporation as receiver—**
  - (1) **In general—** Notwithstanding any other provision of this subchapter, no action taken by the [Corporation](/usc/12/5301.md?p=7) as receiver with respect to a [covered broker or dealer](/usc/12/5381.md?p=a-7) shall—
    - (A) adversely affect the rights of a [customer](/usc/12/5381.md?p=a-10) to [customer property](/usc/12/5381.md?p=a-10) or [customer name securities](/usc/12/5381.md?p=a-10);
    - (B) diminish the amount or timely payment of [net equity](/usc/12/5381.md?p=a-10) [claims](/usc/12/5381.md?p=a-4) of [customers](/usc/12/5381.md?p=a-10); or
    - (C) otherwise impair the recoveries provided to a [customer](/usc/12/5381.md?p=a-10) under the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.).
  - (2) **Net proceeds—** The net proceeds from any transfer, sale, or disposition of assets of the [covered broker or dealer](/usc/12/5381.md?p=a-7), or proceeds thereof by the [Corporation](/usc/12/5301.md?p=7) as receiver for the [covered broker or dealer](/usc/12/5381.md?p=a-7) shall be for the benefit of the estate of the [covered broker or dealer](/usc/12/5381.md?p=a-7), as provided in this subchapter.
- (e) **Claims against the Corporation as receiver—** Any [claim](/usc/12/5381.md?p=a-4) against the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered broker or dealer](/usc/12/5381.md?p=a-7) for assets transferred to a [bridge financial company](/usc/12/5381.md?p=a-3) established with respect to such [covered broker or dealer](/usc/12/5381.md?p=a-7)—
  - (1) shall be determined in accordance with [section 5390(a)(2) of this title](/usc/12/5390.md?p=a-2); and
  - (2) may be reviewed by the appropriate [district](/usc/12/221a.md?p=a) or territorial [court](/usc/12/5381.md?p=a-6) of the United States in accordance with [section 5390(a)(5) of this title](/usc/12/5390.md?p=a-5).
- (f) **Satisfaction of customer claims—**
  - (1) **Obligations to customers—** Notwithstanding any other provision of this subchapter, all obligations of a [covered broker or dealer](/usc/12/5381.md?p=a-7) or of any [bridge financial company](/usc/12/5381.md?p=a-3) established with respect to such [covered broker or dealer](/usc/12/5381.md?p=a-7) to a [customer](/usc/12/5381.md?p=a-10) relating to, or [net equity](/usc/12/5381.md?p=a-10) [claims](/usc/12/5381.md?p=a-4) based upon, [customer property](/usc/12/5381.md?p=a-10) or [customer name securities](/usc/12/5381.md?p=a-10) shall be promptly discharged by [SIPC](/usc/12/5381.md?p=a-16), the [Corporation](/usc/12/5301.md?p=7), or the [bridge financial company](/usc/12/5381.md?p=a-3), as applicable, by the delivery of securities or the making of payments to or for the account of such [customer](/usc/12/5381.md?p=a-10), in a manner and in an amount at least as beneficial to the [customer](/usc/12/5381.md?p=a-10) as would have been the case had the actual proceeds realized from the liquidation of the [covered broker or dealer](/usc/12/5381.md?p=a-7) under this subchapter been distributed in a proceeding under the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.) without the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver and without any transfer of assets or liabilities to a [bridge financial company](/usc/12/5381.md?p=a-3), and with a [filing date](#a-2-C) as of the date on which the [Corporation](/usc/12/5301.md?p=7) is appointed as receiver.
  - (2) **Satisfaction of claims by SIPC—** [SIPC](/usc/12/5381.md?p=a-16), as trustee for a [covered broker or dealer](/usc/12/5381.md?p=a-7), shall satisfy [customer](/usc/12/5381.md?p=a-10) [claims](/usc/12/5381.md?p=a-4) in the manner and amount provided under the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.), as if the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver had not occurred, and with a [filing date](#a-2-C) as of the date on which the [Corporation](/usc/12/5301.md?p=7) is appointed as receiver. The [Corporation](/usc/12/5301.md?p=7) shall satisfy [customer](/usc/12/5381.md?p=a-10) [claims](/usc/12/5381.md?p=a-4), to the extent that a [customer](/usc/12/5381.md?p=a-10) would have received more securities or cash with respect to the allocation of [customer property](/usc/12/5381.md?p=a-10) had the [covered financial company](/usc/12/5381.md?p=a-8) been subject to a proceeding under the Securities Investor Protection Act ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.) without the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver, and with a [filing date](#a-2-C) as of the date on which the [Corporation](/usc/12/5301.md?p=7) is appointed as receiver.
- (g) **Priorities—**
  - (1) **Customer property—** As trustee for a [covered broker or dealer](/usc/12/5381.md?p=a-7), [SIPC](/usc/12/5381.md?p=a-16) shall allocate [customer property](/usc/12/5381.md?p=a-10) and deliver [customer name securities](/usc/12/5381.md?p=a-10) in accordance with section 8(c) of the Securities Investor Protection Act of 1970 ([15 U.S.C. 78fff–2(c)](/usc/15/78fff–2.md?p=c)).
  - (2) **Other claims—** All [claims](/usc/12/5381.md?p=a-4) other than those described in [paragraph (1)](#g-1) ([including](/usc/12/25b.md?p=a-3) any unpaid [claim](/usc/12/5381.md?p=a-4) by a [customer](/usc/12/5381.md?p=a-10) for the allowed [net equity](/usc/12/5381.md?p=a-10) [claim](/usc/12/5381.md?p=a-4) of such [customer](/usc/12/5381.md?p=a-10) from [customer property](/usc/12/5381.md?p=a-10)) shall be paid in accordance with the priorities in [section 5390(b) of this title](/usc/12/5390.md?p=b).
- (h) **Rulemaking—** The [Commission](/usc/12/5301.md?p=5) and the [Corporation](/usc/12/5301.md?p=7), after consultation with [SIPC](/usc/12/5381.md?p=a-16), shall jointly issue rules to implement this section.

# §5386. Mandatory terms and conditions for all orderly liquidation actions


In taking action under this subchapter, the [Corporation](/usc/12/5301.md?p=7) shall—

- (1) determine that such action is necessary for purposes of the financial stability of the United States, and not for the purpose of preserving the [covered financial company](/usc/12/5381.md?p=a-8);
- (2) ensure that the shareholders of a [covered financial company](/usc/12/5381.md?p=a-8) do not receive payment until after all other [claims](/usc/12/5381.md?p=a-4) and the [Fund](/usc/12/4702.md?p=10) are fully paid;
- (3) ensure that unsecured creditors bear losses in accordance with the priority of [claim](/usc/12/5381.md?p=a-4) provisions in [section 5390 of this title](/usc/12/5390.md);
- (4) ensure that management responsible for the failed condition of the [covered financial company](/usc/12/5381.md?p=a-8) is removed (if such management has not already been removed at the time at which the [Corporation](/usc/12/5301.md?p=7) is appointed receiver);
- (5) ensure that the [members](/usc/12/1426a.md?p=g-1) of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/2279bb.md?p=3) (or body performing similar functions) responsible for the failed condition of the [covered financial company](/usc/12/5381.md?p=a-8) are removed, if such [members](/usc/12/1426a.md?p=g-1) have not already been removed at the time the [Corporation](/usc/12/5301.md?p=7) is appointed as receiver; and
- (6) not take an equity interest in or become a shareholder of any [covered financial company](/usc/12/5381.md?p=a-8) or any [covered subsidiary](/usc/12/5381.md?p=a-9).

# §5387. Directors not liable for acquiescing in appointment of receiver


The [members](/usc/12/1426a.md?p=g-1) of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/2279bb.md?p=3) (or body performing similar functions) of a [covered financial company](/usc/12/5381.md?p=a-8) shall not be liable to the shareholders or creditors thereof for acquiescing in or consenting in good faith to the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver for the [covered financial company](/usc/12/5381.md?p=a-8) under [section 5383 of this title](/usc/12/5383.md).


# §5388. Dismissal and exclusion of other actions

- (a) **In general—** Effective as of the date of the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver for the [covered financial company](/usc/12/5381.md?p=a-8) under [section 5382 of this title](/usc/12/5382.md) or the appointment of [SIPC](/usc/12/5381.md?p=a-16) as trustee for a [covered broker or dealer](/usc/12/5381.md?p=a-7) under [section 5385 of this title](/usc/12/5385.md), as applicable, any case or proceeding commenced with respect to the [covered financial company](/usc/12/5381.md?p=a-8) under the [Bankruptcy Code](/usc/12/5381.md?p=a-2) or the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.) shall be dismissed, upon notice to the bankruptcy [court](/usc/12/5381.md?p=a-6) (with respect to a case commenced under the [Bankruptcy Code](/usc/12/5381.md?p=a-2)), and upon notice to [SIPC](/usc/12/5381.md?p=a-16) (with respect to a [covered broker or dealer](/usc/12/5381.md?p=a-7)) and no such case or proceeding may be commenced with respect to a [covered financial company](/usc/12/5381.md?p=a-8) at any time while the orderly liquidation is pending.
- (b) **Revesting of assets—** Effective as of the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver, the assets of a [covered financial company](/usc/12/5381.md?p=a-8) shall, to the extent they have vested in any entity other than the [covered financial company](/usc/12/5381.md?p=a-8) as a result of any case or proceeding commenced with respect to the [covered financial company](/usc/12/5381.md?p=a-8) under the [Bankruptcy Code](/usc/12/5381.md?p=a-2), the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.), or any similar provision of [State](/usc/12/5301.md?p=16) liquidation or insolvency law applicable to the [covered financial company](/usc/12/5381.md?p=a-8), revest in the [covered financial company](/usc/12/5381.md?p=a-8).
- (c) **Limitation—** Notwithstanding subsections [(a)](#a) and [(b)](#b), any order entered or other relief granted by a bankruptcy [court](/usc/12/5381.md?p=a-6) prior to the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver shall continue with the same validity as if an orderly liquidation had not been commenced.

# §5389. Rulemaking; non-conflicting law


The [Corporation](/usc/12/5301.md?p=7) shall, in consultation with the [Council](/usc/12/5301.md?p=8), prescribe such rules or regulations as the [Corporation](/usc/12/5301.md?p=7) considers necessary or appropriate to implement this subchapter, [including](/usc/12/25b.md?p=a-3) rules and regulations with respect to the rights, interests, and priorities of creditors, counterparties, security entitlement holders, or other [persons](/usc/12/5481.md?p=19) with respect to any [covered financial company](/usc/12/5381.md?p=a-8) or any assets or other property of or held by such [covered financial company](/usc/12/5381.md?p=a-8), and address the potential for conflicts of interest between or among individual receiverships established under this subchapter or under the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance Act [[12 U.S.C. 1811](/usc/12/1811.md) et seq.]. To the extent possible, the [Corporation](/usc/12/5301.md?p=7) shall seek to harmonize applicable rules and regulations promulgated under this section with the insolvency laws that would otherwise apply to a [covered financial company](/usc/12/5381.md?p=a-8).


# §5390. Powers and duties of the Corporation

- (a) **Powers and authorities—**
  - (1) **General powers—**
    - (A) **Successor to covered financial company—** The [Corporation](/usc/12/5301.md?p=7) shall, upon appointment as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) under this subchapter, succeed to—
      - (i) all rights, titles, powers, and privileges of the [covered financial company](/usc/12/5381.md?p=a-8) and its assets, and of any stockholder, [member](/usc/12/1426a.md?p=g-1), officer, or [director](/usc/12/2279bb.md?p=3) of such [company](/usc/12/24a.md?p=g-1); and
      - (ii) title to the books, records, and assets of any previous receiver or other legal custodian of such [covered financial company](/usc/12/5381.md?p=a-8).
    - (B) **Operation of the covered financial company during the period of orderly liquidation—** The [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), may—
      - (i) take over the assets of and operate the [covered financial company](/usc/12/5381.md?p=a-8) with all of the powers of the [members](/usc/12/1426a.md?p=g-1) or shareholders, the [directors](/usc/12/2279bb.md?p=3), and the officers of the [covered financial company](/usc/12/5381.md?p=a-8), and conduct all business of the [covered financial company](/usc/12/5381.md?p=a-8);
      - (ii) collect all obligations and money owed to the [covered financial company](/usc/12/5381.md?p=a-8);
      - (iii) perform all functions of the [covered financial company](/usc/12/5381.md?p=a-8), in the name of the [covered financial company](/usc/12/5381.md?p=a-8);
      - (iv) manage the assets and property of the [covered financial company](/usc/12/5381.md?p=a-8), consistent with maximization of the [value](#a-11-H-i-III) of the assets in the context of the orderly liquidation; and
      - (v) provide by contract for assistance in fulfilling any function, activity, action, or duty of the [Corporation](/usc/12/5301.md?p=7) as receiver.
    - (C) **Functions of covered financial company officers, directors, and shareholders—** The [Corporation](/usc/12/5301.md?p=7) may provide for the exercise of any function by any [member](/usc/12/1426a.md?p=g-1) or stockholder, [director](/usc/12/2279bb.md?p=3), or officer of any [covered financial company](/usc/12/5381.md?p=a-8) for which the [Corporation](/usc/12/5301.md?p=7) has been appointed as receiver under this subchapter.
    - (D) **Additional powers as receiver—** The [Corporation](/usc/12/5301.md?p=7) shall, as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), and subject to all legally enforceable and perfected security interests and all legally enforceable security entitlements in respect of assets held by the [covered financial company](/usc/12/5381.md?p=a-8), liquidate, and wind-up[^1] the affairs of a [covered financial company](/usc/12/5381.md?p=a-8), [including](/usc/12/25b.md?p=a-3) taking steps to realize upon the assets of the [covered financial company](/usc/12/5381.md?p=a-8), in such manner as the [Corporation](/usc/12/5301.md?p=7) deems appropriate, [including](/usc/12/25b.md?p=a-3) through the sale of assets, the transfer of assets to a [bridge financial company](/usc/12/5381.md?p=a-3) established under [subsection (h)](#h), or the exercise of any other rights or privileges granted to the receiver under this section.
    - (E) **Additional powers with respect to failing subsidiaries of a covered financial company—**
      - (i) **In general—** In any case in which a receiver is appointed for a [covered financial company](/usc/12/5381.md?p=a-8) under [section 5382 of this title](/usc/12/5382.md), the [Corporation](/usc/12/5301.md?p=7) may appoint itself as receiver of any [covered subsidiary](/usc/12/5381.md?p=a-9) of the [covered financial company](/usc/12/5381.md?p=a-8) that is organized under Federal law or the laws of any [State](/usc/12/5301.md?p=16), if the [Corporation](/usc/12/5301.md?p=7) and the [Secretary](/usc/12/5301.md?p=14) jointly determine that—
        - (I) the [covered subsidiary](/usc/12/5381.md?p=a-9) is in [default](/usc/12/1467a.md?p=e-7-A) or [in danger of default](/usc/12/1467a.md?p=e-7-A);
        - (II) such action would avoid or mitigate serious adverse effects on the financial stability or economic conditions of the United States; and
        - (III) such action would facilitate the orderly liquidation of the [covered financial company](/usc/12/5381.md?p=a-8).
      - (ii) **Treatment as covered financial company—** If the [Corporation](/usc/12/5301.md?p=7) is appointed as receiver of a [covered subsidiary](/usc/12/5381.md?p=a-9) of a [covered financial company](/usc/12/5381.md?p=a-8) under [clause (i)](#a-1-E-i), the [covered subsidiary](/usc/12/5381.md?p=a-9) shall thereafter be considered a [covered financial company](/usc/12/5381.md?p=a-8) under this subchapter, and the [Corporation](/usc/12/5301.md?p=7) shall thereafter have all the powers and rights with respect to that [covered subsidiary](/usc/12/5381.md?p=a-9) as it has with respect to a [covered financial company](/usc/12/5381.md?p=a-8) under this subchapter.
    - (F) **Organization of bridge companies—** The [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), may organize a [bridge financial company](/usc/12/5381.md?p=a-3) under [subsection (h)](#h).
    - (G) **Merger; transfer of assets and liabilities—**
      - (i) **In general—** Subject to clauses [(ii)](#a-1-G-ii) and [(iii)](#a-1-G-iii), the [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), may—
        - (I) merge the [covered financial company](/usc/12/5381.md?p=a-8) with another [company](/usc/12/24a.md?p=g-1); or
        - (II) transfer any asset or liability of the [covered financial company](/usc/12/5381.md?p=a-8) ([including](/usc/12/25b.md?p=a-3) any assets and liabilities held by the [covered financial company](/usc/12/5381.md?p=a-8) for security entitlement holders, any [customer property](/usc/12/5381.md?p=a-10), or any assets and liabilities associated with any trust or custody business) without obtaining any approval, assignment, or consent with respect to such transfer.
      - (ii) **Federal agency approval; antitrust review—** With respect to a transaction described in [clause (i)(I)](#a-1-G-i-I) that requires approval by a [Federal agency](/usc/12/3101.md?p=5)—
        - (I) the transaction may not be consummated before the 5th calendar day after the date of approval by the [Federal agency](/usc/12/3101.md?p=5) responsible for such approval;
        - (II) if, in connection with any such approval, a report on competitive factors is required, the [Federal agency](/usc/12/3101.md?p=5) responsible for such approval shall promptly notify the Attorney General of the United States of the proposed transaction, and the Attorney General shall provide the required report not later than 10 days after the date of the request; and
        - (III) if notification under [section 18a of title 15](/usc/15/18a.md) is required with respect to such transaction, then the required waiting period shall end on the 15th day after the date on which the Attorney General and the Federal Trade [Commission](/usc/12/5301.md?p=5) receive such notification, unless the waiting period is terminated earlier under [subsection (b)(2)](/usc/15/18a.md?p=b-2) of such section 18a, or is extended pursuant to [subsection (e)(2)](/usc/15/18a.md?p=e-2) of such section 18a.
      - (iii) **Setoff—** Subject to the other provisions of this subchapter, any transferee of assets from a receiver, [including](/usc/12/25b.md?p=a-3) a [bridge financial company](/usc/12/5381.md?p=a-3), shall be subject to such [claims](/usc/12/5381.md?p=a-4) or rights as would prevail over the rights of such transferee in such assets under applicable noninsolvency law.
    - (H) **Payment of valid obligations—** The [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), shall, to the extent that [funds](/usc/12/4702.md?p=10) are available, pay all valid obligations of the [covered financial company](/usc/12/5381.md?p=a-8) that are due and payable at the time of the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver, in accordance with the prescriptions and limitations of this subchapter.
    - (I) **Applicable noninsolvency law—** Except as may otherwise be provided in this subchapter, the applicable noninsolvency law shall be determined by the noninsolvency choice of law rules otherwise applicable to the [claims](/usc/12/5381.md?p=a-4), rights, titles, [persons](/usc/12/5481.md?p=19), or entities at issue.
    - (J) **Subpoena authority—**
      - (i) **In general—** The [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), may, for purposes of carrying out any power, authority, or duty with respect to the [covered financial company](/usc/12/5381.md?p=a-8) ([including](/usc/12/25b.md?p=a-3) determining any [claim](/usc/12/5381.md?p=a-4) against the [covered financial company](/usc/12/5381.md?p=a-8) and determining and realizing upon any asset of [any person](/usc/12/1715z–4a.md?p=a-2) in the course of collecting money due the [covered financial company](/usc/12/5381.md?p=a-8)), exercise any power established under [section 1818(n) of this title](/usc/12/1818.md?p=n), as if the [Corporation](/usc/12/5301.md?p=7) were the [appropriate Federal banking agency](/usc/12/24a.md?p=g-2) for the [covered financial company](/usc/12/5381.md?p=a-8), and the [covered financial company](/usc/12/5381.md?p=a-8) were an [insured depository institution](/usc/12/24a.md?p=g-2).
      - (ii) **Rule of construction—** This subparagraph may not be construed as limiting any rights that the [Corporation](/usc/12/5301.md?p=7), in any capacity, might otherwise have to exercise any powers described in [clause (i)](#a-1-J-i) or under any other provision of law.
    - (K) **Incidental powers—** The [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), may exercise all powers and authorities specifically granted to receivers under this subchapter, and such incidental powers as shall be necessary to carry out such powers under this subchapter.
    - (L) **Utilization of private sector—** In carrying out its responsibilities in the management and disposition of assets from the [covered financial company](/usc/12/5381.md?p=a-8), the [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), may utilize the services of private [persons](/usc/12/5481.md?p=19), [including](/usc/12/25b.md?p=a-3) [real estate](/usc/12/1715z–20.md?p=b-2) and loan portfolio asset management, property management, auction marketing, legal, and brokerage services, if such services are available in the private sector, and the [Corporation](/usc/12/5301.md?p=7) determines that utilization of such services is practicable, efficient, and cost effective.
    - (M) **Shareholders and creditors of covered financial company—** Notwithstanding any other provision of law, the [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), shall succeed by operation of law to the rights, titles, powers, and privileges described in [subparagraph (A)](#a-1-A), and shall terminate all rights and [claims](/usc/12/5381.md?p=a-4) that the stockholders and creditors of the [covered financial company](/usc/12/5381.md?p=a-8) may have against the assets of the [covered financial company](/usc/12/5381.md?p=a-8) or the [Corporation](/usc/12/5301.md?p=7) arising out of their status as stockholders or creditors, except for their right to payment, resolution, or other satisfaction of their [claims](/usc/12/5381.md?p=a-4), as permitted under this section. The [Corporation](/usc/12/5301.md?p=7) shall ensure that shareholders and unsecured creditors bear losses, consistent with the priority of [claims](/usc/12/5381.md?p=a-4) provisions under this section.
    - (N) **Coordination with foreign financial authorities—** The [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), shall coordinate, to the maximum extent possible, with the appropriate foreign financial authorities regarding the orderly liquidation of any [covered financial company](/usc/12/5381.md?p=a-8) that has assets or operations in a country other than the United States.
    - (O) **Restriction on transfers—**
      - (i) **Selection of accounts for transfer—** If the [Corporation](/usc/12/5301.md?p=7) establishes one or more [bridge financial companies](/usc/12/5381.md?p=a-3) with respect to a [covered broker or dealer](/usc/12/5381.md?p=a-7), the [Corporation](/usc/12/5301.md?p=7) shall transfer to one of such [bridge financial companies](/usc/12/5381.md?p=a-3), all [customer](/usc/12/5381.md?p=a-10) accounts of the [covered broker or dealer](/usc/12/5381.md?p=a-7), and all associated [customer name securities](/usc/12/5381.md?p=a-10) and [customer property](/usc/12/5381.md?p=a-10), unless the [Corporation](/usc/12/5301.md?p=7), after consulting with the [Commission](/usc/12/5301.md?p=5) and [SIPC](/usc/12/5381.md?p=a-16), determines that—
        - (I) the [customer](/usc/12/5381.md?p=a-10) accounts, [customer name securities](/usc/12/5381.md?p=a-10), and [customer property](/usc/12/5381.md?p=a-10) are likely to be promptly transferred to another broker or dealer that is registered with the [Commission](/usc/12/5301.md?p=5) under [section 78o(b)](/usc/15/78o.md?p=b) of title 15 and is a [member](/usc/12/1426a.md?p=g-1) of [SIPC](/usc/12/5381.md?p=a-16); or
        - (II) the transfer of the accounts to a [bridge financial company](/usc/12/5381.md?p=a-3) would materially interfere with the ability of the [Corporation](/usc/12/5301.md?p=7) to avoid or mitigate serious adverse effects on financial stability or economic conditions in the United States.
      - (ii) **Transfer of property—** [SIPC](/usc/12/5381.md?p=a-16), as trustee for the liquidation of the [covered broker or dealer](/usc/12/5381.md?p=a-7), and the [Commission](/usc/12/5301.md?p=5) shall provide any and all reasonable assistance necessary to complete such transfers by the [Corporation](/usc/12/5301.md?p=7).
      - (iii) **Customer consent and court approval not required—** Neither [customer](/usc/12/5381.md?p=a-10) consent nor [court](/usc/12/5381.md?p=a-6) approval shall be required to transfer any [customer](/usc/12/5381.md?p=a-10) accounts or associated [customer name securities](/usc/12/5381.md?p=a-10) or [customer property](/usc/12/5381.md?p=a-10) to a [bridge financial company](/usc/12/5381.md?p=a-3) in accordance with this section.
      - (iv) **Notification of SIPC and sharing of information—** The [Corporation](/usc/12/5301.md?p=7) shall identify to [SIPC](/usc/12/5381.md?p=a-16) the [customer](/usc/12/5381.md?p=a-10) accounts and associated [customer name securities](/usc/12/5381.md?p=a-10) and [customer property](/usc/12/5381.md?p=a-10) transferred to the [bridge financial company](/usc/12/5381.md?p=a-3). The [Corporation](/usc/12/5301.md?p=7) and [SIPC](/usc/12/5381.md?p=a-16) shall cooperate in the sharing of any information necessary for each entity to discharge its obligations under this subchapter and under the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.) [including](/usc/12/25b.md?p=a-3) by providing access to the books and records of the [covered financial company](/usc/12/5381.md?p=a-8) and any [bridge financial company](/usc/12/5381.md?p=a-3) established in accordance with this subchapter.
  - (2) **Determination of claims—**
    - (A) **In general—** The [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), shall report on [claims](/usc/12/5381.md?p=a-4), as set forth in [section 5383(c)(3) of this title](/usc/12/5383.md?p=c-3). Subject to paragraph (4) of this subsection, the [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), shall determine [claims](/usc/12/5381.md?p=a-4) in accordance with the requirements of this subsection and regulations prescribed under [section 5389 of this title](/usc/12/5389.md).
    - (B) **Notice requirements—** The [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), in any case involving the liquidation or winding up of the affairs of a [covered financial company](/usc/12/5381.md?p=a-8), shall—
      - (i) promptly publish a notice to the creditors of the [covered financial company](/usc/12/5381.md?p=a-8) to present their [claims](/usc/12/5381.md?p=a-4), together with proof, to the receiver by a date specified in the notice, which shall be not earlier than 90 days after the date of publication of such notice; and
      - (ii) republish such notice 1 month and 2 months, respectively, after the date of publication under [clause (i)](#a-2-B-i).
    - (C) **Mailing required—** The [Corporation](/usc/12/5301.md?p=7) as receiver shall mail a notice similar to the notice published under clause [(i)](#a-2-B-i) or [(ii)](#a-2-B-ii) of subparagraph (B), at the time of such publication, to any creditor shown on the books and records of the [covered financial company](/usc/12/5381.md?p=a-8)—
      - (i) at the last address of the creditor appearing in such books;
      - (ii) in any [claim](/usc/12/5381.md?p=a-4) filed by the claimant; or
      - (iii) upon discovery of the name and address of a claimant not appearing on the books and records of the [covered financial company](/usc/12/5381.md?p=a-8), not later than 30 days after the date of the discovery of such name and address.
  - (3) **Procedures for resolution of claims—**
    - (A) **Decision period—**
      - (i) **In general—** Prior to the 180th day after the date on which a [claim](/usc/12/5381.md?p=a-4) against a [covered financial company](/usc/12/5381.md?p=a-8) is filed with the [Corporation](/usc/12/5301.md?p=7) as receiver, or such later date as may be agreed as provided in [clause (ii)](#a-3-A-ii), the [Corporation](/usc/12/5301.md?p=7) shall notify the claimant whether it allows or disallows the [claim](/usc/12/5381.md?p=a-4), in accordance with subparagraphs [(B)](#a-3-B), [(C)](#a-3-C), and [(D)](#a-3-D).
      - (ii) **Extension of time—** By written agreement executed not later than 180 days after the date on which a [claim](/usc/12/5381.md?p=a-4) against a [covered financial company](/usc/12/5381.md?p=a-8) is filed with the [Corporation](/usc/12/5301.md?p=7), the period described in [clause (i)](#a-3-A-i) may be extended by written agreement between the claimant and the [Corporation](/usc/12/5301.md?p=7). Failure to notify the claimant of any disallowance within the time period set forth in [clause (i)](#a-3-A-i), as it may be extended by agreement under this clause, shall be deemed to be a disallowance of such [claim](/usc/12/5381.md?p=a-4), and the claimant may file or continue an action in [court](/usc/12/5381.md?p=a-6), as provided in [paragraph (4)](#a-4).
      - (iii) **Mailing of notice sufficient—** The requirements of [clause (i)](#a-3-A-i) shall be deemed to be satisfied if the notice of any decision with respect to any [claim](/usc/12/5381.md?p=a-4) is mailed to the last address of the claimant which appears—
        - (I) on the books, records, or both of the [covered financial company](/usc/12/5381.md?p=a-8);
        - (II) in the [claim](/usc/12/5381.md?p=a-4) filed by the claimant; or
        - (III) in documents submitted in proof of the [claim](/usc/12/5381.md?p=a-4).
      - (iv) **Contents of notice of disallowance—** If the [Corporation](/usc/12/5301.md?p=7) as receiver disallows any [claim](/usc/12/5381.md?p=a-4) filed under [clause (i)](#a-3-A-i), the notice to the claimant shall contain—
        - (I) a statement of each reason for the disallowance; and
        - (II) the procedures required to file or continue an action in [court](/usc/12/5381.md?p=a-6), as provided in [paragraph (4)](#a-4).
    - (B) **Allowance of proven claim—** The receiver shall allow any [claim](/usc/12/5381.md?p=a-4) received by the receiver on or before the date specified in the notice under [paragraph (2)(B)(i)](#a-2-B-i), which is proved to the satisfaction of the receiver.
    - (C) **Disallowance of claims filed after end of filing period—**
      - (i) **In general—** Except as provided in [clause (ii)](#a-3-C-ii), [claims](/usc/12/5381.md?p=a-4) filed after the date specified in the notice published under [paragraph (2)(B)(i)](#a-2-B-i) shall be disallowed, and such disallowance shall be final.
      - (ii) **Certain exceptions—** [Clause (i)](#a-3-C-i) shall not apply with respect to any [claim](/usc/12/5381.md?p=a-4) filed by a claimant after the date specified in the notice published under [paragraph (2)(B)(i)](#a-2-B-i), and such [claim](/usc/12/5381.md?p=a-4) may be considered by the receiver under [subparagraph (B)](#a-3-B), if—
        - (I) the claimant did not receive notice of the appointment of the receiver in time to file such [claim](/usc/12/5381.md?p=a-4) before such date; and
        - (II) such [claim](/usc/12/5381.md?p=a-4) is filed in time to permit payment of such [claim](/usc/12/5381.md?p=a-4).
    - (D) **Authority to disallow claims—**
      - (i) **In general—** The [Corporation](/usc/12/5301.md?p=7) may disallow any portion of any [claim](/usc/12/5381.md?p=a-4) by a creditor or [claim](/usc/12/5381.md?p=a-4) of a security, preference, setoff, or priority which is not proved to the satisfaction of the [Corporation](/usc/12/5301.md?p=7).
      - (ii) **Payments to undersecured creditors—** In the case of a [claim](/usc/12/5381.md?p=a-4) against a [covered financial company](/usc/12/5381.md?p=a-8) that is secured by any property or other asset of such [covered financial company](/usc/12/5381.md?p=a-8), the receiver—
        - (I) may treat the portion of such [claim](/usc/12/5381.md?p=a-4) which exceeds an amount equal to the fair market [value](#a-11-H-i-III) of such property or other asset as an unsecured [claim](/usc/12/5381.md?p=a-4); and
        - (II) may not make any payment with respect to such unsecured portion of the [claim](/usc/12/5381.md?p=a-4), other than in connection with the disposition of all [claims](/usc/12/5381.md?p=a-4) of unsecured creditors of the [covered financial company](/usc/12/5381.md?p=a-8).
      - (iii) **Exceptions—** No provision of this paragraph shall apply with respect to—
        - (I) any [extension of credit](/usc/12/1843.md?p=c-14-F-iv) from any Federal [reserve bank](/usc/12/221a.md?p=a), or the [Corporation](/usc/12/5301.md?p=7), to any [covered financial company](/usc/12/5381.md?p=a-8); or
        - (II) subject to [clause (ii)](#a-3-D-ii), any legally enforceable and perfected security interest in the assets of the [covered financial company](/usc/12/5381.md?p=a-8) securing any such [extension of credit](/usc/12/1843.md?p=c-14-F-iv).
    - (E) **Legal effect of filing—**
      - (i) **Statute of limitations tolled—** For purposes of any applicable statute of limitations, the filing of a [claim](/usc/12/5381.md?p=a-4) with the receiver shall constitute a commencement of an action.
      - (ii) **No prejudice to other actions—** Subject to [paragraph (8)](#a-8), the filing of a [claim](/usc/12/5381.md?p=a-4) with the receiver shall not prejudice any right of the claimant to continue any action which was filed before the date of appointment of the receiver for the [covered financial company](/usc/12/5381.md?p=a-8).
  - (4) **Judicial determination of claims—**
    - (A) **In general—** Subject to [subparagraph (B)](#a-4-B), a claimant may file suit on a [claim](/usc/12/5381.md?p=a-4) (or continue an action commenced before the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver) in the [district](/usc/12/221a.md?p=a) or territorial [court](/usc/12/5381.md?p=a-6) of the United States for the [district](/usc/12/221a.md?p=a) within which the principal place of business of the [covered financial company](/usc/12/5381.md?p=a-8) is located (and such [court](/usc/12/5381.md?p=a-6) shall have jurisdiction to hear such [claim](/usc/12/5381.md?p=a-4)).
    - (B) **Timing—** A [claim](/usc/12/5381.md?p=a-4) under [subparagraph (A)](#a-4-A) may be filed before the end of the 60-day period beginning on the earlier of—
      - (i) the end of the period described in [paragraph (3)(A)(i)](#a-3-A-i) (or, if extended by agreement of the [Corporation](/usc/12/5301.md?p=7) and the claimant, the period described in [paragraph (3)(A)(ii)](#a-3-A-ii)) with respect to any [claim](/usc/12/5381.md?p=a-4) against a [covered financial company](/usc/12/5381.md?p=a-8) for which the [Corporation](/usc/12/5301.md?p=7) is receiver; or
      - (ii) the date of any notice of disallowance of such [claim](/usc/12/5381.md?p=a-4) pursuant to [paragraph (3)(A)(i)](#a-3-A-i).
    - (C) **Statute of limitations—** If any claimant fails to file suit on such [claim](/usc/12/5381.md?p=a-4) (or to continue an action on such [claim](/usc/12/5381.md?p=a-4) commenced before the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver) prior to the end of the 60-day period described in [subparagraph (B)](#a-4-B), the [claim](/usc/12/5381.md?p=a-4) shall be deemed to be disallowed (other than any portion of such [claim](/usc/12/5381.md?p=a-4) which was allowed by the receiver) as of the end of such period, such disallowance shall be final, and the claimant shall have no further rights or remedies with respect to such [claim](/usc/12/5381.md?p=a-4).
  - (5) **Expedited determination of claims—**
    - (A) **Procedure required—** The [Corporation](/usc/12/5301.md?p=7) shall establish a procedure for expedited relief outside of the [claims](/usc/12/5381.md?p=a-4) process established under [paragraph (3)](#a-3), for any claimant that alleges—
      - (i) having a legally valid and enforceable or perfected security interest in property of a [covered financial company](/usc/12/5381.md?p=a-8) or [control](/usc/12/24a.md?p=g-1) of any legally valid and enforceable security entitlement in respect of any asset held by the [covered financial company](/usc/12/5381.md?p=a-8) for which the [Corporation](/usc/12/5301.md?p=7) has been appointed receiver; and
      - (ii) that irreparable injury will occur if the [claims](/usc/12/5381.md?p=a-4) procedure established under [paragraph (3)](#a-3) is followed.
    - (B) **Determination period—** Prior to the end of the 90-day period beginning on the date on which a [claim](/usc/12/5381.md?p=a-4) is filed in accordance with the procedures established pursuant to [subparagraph (A)](#a-5-A), the [Corporation](/usc/12/5301.md?p=7) shall—
      - (i) determine—
        - (I) whether to allow or disallow such [claim](/usc/12/5381.md?p=a-4), or any portion thereof; or
        - (II) whether such [claim](/usc/12/5381.md?p=a-4) should be determined pursuant to the procedures established pursuant to [paragraph (3)](#a-3);
      - (ii) notify the claimant of the determination; and
      - (iii) if the [claim](/usc/12/5381.md?p=a-4) is disallowed, provide a statement of each reason for the disallowance and the procedure for obtaining a judicial determination.
    - (C) **Period for filing or renewing suit—** Any claimant who files a request for expedited relief shall be permitted to file suit (or continue a suit filed before the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver[^2] seeking a determination of the rights of the claimant with respect to such security interest (or such security entitlement) after the earlier of—
      - (i) the end of the 90-day period beginning on the date of the filing of a request for expedited relief; or
      - (ii) the date on which the [Corporation](/usc/12/5301.md?p=7) denies the [claim](/usc/12/5381.md?p=a-4) or a portion thereof.
    - (D) **Statute of limitations—** If an action described in [subparagraph (C)](#a-5-C) is not filed, or the motion to renew a previously filed suit is not made, before the end of the 30-day period beginning on the date on which such action or motion may be filed in accordance with [subparagraph (C)](#a-5-C), the [claim](/usc/12/5381.md?p=a-4) shall be deemed to be disallowed as of the end of such period (other than any portion of such [claim](/usc/12/5381.md?p=a-4) which was allowed by the receiver), such disallowance shall be final, and the claimant shall have no further rights or remedies with respect to such [claim](/usc/12/5381.md?p=a-4).
    - (E) **Legal effect of filing—**
      - (i) **Statute of limitations tolled—** For purposes of any applicable statute of limitations, the filing of a [claim](/usc/12/5381.md?p=a-4) with the receiver shall constitute a commencement of an action.
      - (ii) **No prejudice to other actions—** Subject to [paragraph (8)](#a-8), the filing of a [claim](/usc/12/5381.md?p=a-4) with the receiver shall not prejudice any right of the claimant to continue any action which was filed before the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver for the [covered financial company](/usc/12/5381.md?p=a-8).
  - (6) **Agreements against interest of the receiver—** No agreement that tends to diminish or defeat the interest of the [Corporation](/usc/12/5301.md?p=7) as receiver in any asset acquired by the receiver under this section shall be valid against the receiver, unless such agreement—
    - (A) is in writing;
    - (B) was executed by an authorized officer or representative of the [covered financial company](/usc/12/5381.md?p=a-8), or confirmed in the ordinary course of business by the [covered financial company](/usc/12/5381.md?p=a-8); and
    - (C) has been, since the time of its execution, an official record of the [company](/usc/12/24a.md?p=g-1) or the party claiming under the agreement provides documentation, acceptable to the receiver, of such agreement and its authorized execution or confirmation by the [covered financial company](/usc/12/5381.md?p=a-8).
  - (7) **Payment of claims—**
    - (A) **In general—** Subject to [subparagraph (B)](#a-7-B), the [Corporation](/usc/12/5301.md?p=7) as receiver may, in its discretion and to the extent that [funds](/usc/12/4702.md?p=10) are available, pay creditor [claims](/usc/12/5381.md?p=a-4), in such manner and amounts as are authorized under this section, which are—
      - (i) allowed by the receiver;
      - (ii) approved by the receiver pursuant to a final determination pursuant to paragraph [(3)](#a-3) or [(5)](#a-5), as applicable; or
      - (iii) determined by the final judgment of a [court](/usc/12/5381.md?p=a-6) of competent jurisdiction.
    - (B) **Limitation—** A creditor shall, in no event, receive less than the amount that the creditor is entitled to receive under paragraphs [(2)](#d-2) and [(3)](#d-3) of subsection (d), as applicable.
    - (C) **Payment of dividends on claims—** The [Corporation](/usc/12/5301.md?p=7) as receiver may, in its sole discretion, and to the extent otherwise permitted by this section, pay dividends on proven [claims](/usc/12/5381.md?p=a-4) at any time, and no liability shall attach to the [Corporation](/usc/12/5301.md?p=7) as receiver, by reason of any such payment or for failure to pay dividends to a claimant whose [claim](/usc/12/5381.md?p=a-4) is not proved at the time of any such payment.
    - (D) **Rulemaking by the Corporation—** The [Corporation](/usc/12/5301.md?p=7) may prescribe such rules, [including](/usc/12/25b.md?p=a-3) definitions of terms, as the [Corporation](/usc/12/5301.md?p=7) deems appropriate to establish an interest rate for or to make payments of post-insolvency interest to creditors holding proven [claims](/usc/12/5381.md?p=a-4) against the receivership estate of a [covered financial company](/usc/12/5381.md?p=a-8), except that no such interest shall be paid until the [Corporation](/usc/12/5301.md?p=7) as receiver has satisfied the principal amount of all creditor [claims](/usc/12/5381.md?p=a-4).
  - (8) **Suspension of legal actions—**
    - (A) **In general—** After the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), the [Corporation](/usc/12/5301.md?p=7) may request a stay in any judicial action or proceeding in which such [covered financial company](/usc/12/5381.md?p=a-8) is or becomes a party, for a period of not to exceed 90 days.
    - (B) **Grant of stay by all courts required—** Upon receipt of a request by the [Corporation](/usc/12/5301.md?p=7) pursuant to [subparagraph (A)](#a-8-A), the [court](/usc/12/5381.md?p=a-6) shall grant such stay as to all parties.
  - (9) **Additional rights and duties—**
    - (A) **Prior final adjudication—** The [Corporation](/usc/12/5301.md?p=7) shall abide by any final, non-appealable judgment of any [court](/usc/12/5381.md?p=a-6) of competent jurisdiction that was rendered before the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver.
    - (B) **Rights and remedies of receiver—** In the event of any appealable judgment, the [Corporation](/usc/12/5301.md?p=7) as receiver shall—
      - (i) have all the rights and remedies available to the [covered financial company](/usc/12/5381.md?p=a-8) (before the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver under [section 5382 of this title](/usc/12/5382.md)) and the [Corporation](/usc/12/5301.md?p=7), [including](/usc/12/25b.md?p=a-3) removal to Federal [court](/usc/12/5381.md?p=a-6) and all appellate rights; and
      - (ii) not be required to post any bond in order to pursue such remedies.
    - (C) **No attachment or execution—** No attachment or execution may be issued by any [court](/usc/12/5381.md?p=a-6) upon assets in the possession of the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8).
    - (D) **Limitation on judicial review—** Except as otherwise provided in this subchapter, no [court](/usc/12/5381.md?p=a-6) shall have jurisdiction over—
      - (i) any [claim](/usc/12/5381.md?p=a-4) or action for payment from, or any action seeking a determination of rights with respect to, the assets of any [covered financial company](/usc/12/5381.md?p=a-8) for which the [Corporation](/usc/12/5301.md?p=7) has been appointed receiver, [including](/usc/12/25b.md?p=a-3) any assets which the [Corporation](/usc/12/5301.md?p=7) may [acquire](/usc/12/1467a.md?p=a-1-J) from itself as such receiver; or
      - (ii) any [claim](/usc/12/5381.md?p=a-4) relating to any act or omission of such [covered financial company](/usc/12/5381.md?p=a-8) or the [Corporation](/usc/12/5301.md?p=7) as receiver.
    - (E) **Disposition of assets—** In exercising any right, power, privilege, or authority as receiver in connection with any [covered financial company](/usc/12/5381.md?p=a-8) for which the [Corporation](/usc/12/5301.md?p=7) is acting as receiver under this section, the [Corporation](/usc/12/5301.md?p=7) shall, to the greatest extent practicable, conduct its operations in a manner that—
      - (i) maximizes the net present [value](#a-11-H-i-III) return from the sale or disposition of such assets;
      - (ii) minimizes the amount of any loss realized in the resolution of cases;
      - (iii) mitigates the potential for serious adverse effects to the financial system;
      - (iv) ensures timely and adequate competition and fair and consistent treatment of offerors; and
      - (v) prohibits discrimination on the basis of race, sex, or ethnic group in the solicitation and consideration of offers.
  - (10) **Statute of limitations for actions brought by receiver—**
    - (A) **In general—** Notwithstanding any provision of any contract, the applicable statute of limitations with regard to any action brought by the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) shall be—
      - (i) in the case of any contract [claim](/usc/12/5381.md?p=a-4), the longer of—
        - (I) the 6-year period beginning on the date on which the [claim](/usc/12/5381.md?p=a-4) accrues; or
        - (II) the period applicable under [State](/usc/12/5301.md?p=16) law; and
      - (ii) in the case of any tort [claim](/usc/12/5381.md?p=a-4), the longer of—
        - (I) the 3-year period beginning on the date on which the [claim](/usc/12/5381.md?p=a-4) accrues; or
        - (II) the period applicable under [State](/usc/12/5301.md?p=16) law.
    - (B) **Date on which a claim accrues—** For purposes of [subparagraph (A)](#a-10-A), the date on which the statute of limitations begins to run on any [claim](/usc/12/5381.md?p=a-4) described in [subparagraph (A)](#a-10-A) shall be the later of—
      - (i) the date of the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver under this subchapter; or
      - (ii) the date on which the cause of action accrues.
    - (C) **Revival of expired State causes of action—**
      - (i) **In general—** In the case of any tort [claim](/usc/12/5381.md?p=a-4) described in [clause (ii)](#a-10-C-ii) for which the applicable statute of limitations under [State](/usc/12/5301.md?p=16) law has expired not more than 5 years before the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), the [Corporation](/usc/12/5301.md?p=7) may bring an action as receiver on such [claim](/usc/12/5381.md?p=a-4) without regard to the expiration of the statute of limitations.
      - (ii) **Claims described—** A tort [claim](/usc/12/5381.md?p=a-4) referred to in [clause (i)](#a-10-C-i) is a [claim](/usc/12/5381.md?p=a-4) arising from fraud, intentional misconduct resulting in unjust enrichment, or intentional misconduct resulting in substantial loss to the [covered financial company](/usc/12/5381.md?p=a-8).
  - (11) **Avoidable transfers—**
    - (A) **Fraudulent transfers—** The [Corporation](/usc/12/5301.md?p=7), as receiver for any [covered financial company](/usc/12/5381.md?p=a-8), may avoid a transfer of any interest of the [covered financial company](/usc/12/5381.md?p=a-8) in property, or any obligation incurred by the [covered financial company](/usc/12/5381.md?p=a-8), that was made or incurred at or within 2 years before the date on which the [Corporation](/usc/12/5301.md?p=7) was appointed receiver, if—
      - (i) the [covered financial company](/usc/12/5381.md?p=a-8) voluntarily or involuntarily—
        - (I) made such transfer or incurred such obligation with actual intent to hinder, delay, or defraud any entity to which the [covered financial company](/usc/12/5381.md?p=a-8) was or became, on or after the date on which such transfer was made or such obligation was incurred, indebted; or
        - (II) received less than a reasonably equivalent [value](#a-11-H-i-III) in exchange for such transferor obligation; and
      - (ii) the [covered financial company](/usc/12/5381.md?p=a-8) voluntarily or involuntarily—
        - (I) was [insolvent](#a-11-H-ii-II) on the date that such transfer was made or such obligation was incurred, or became [insolvent](#a-11-H-ii-II) as a result of such transfer or obligation;
        - (II) was engaged in business or a transaction, or was about to engage in business or a transaction, for which any property remaining with the [covered financial company](/usc/12/5381.md?p=a-8) was an unreasonably small [capital](/usc/12/51c.md);
        - (III) intended to incur, or believed that the [covered financial company](/usc/12/5381.md?p=a-8) would incur, debts that would be beyond the ability of the [covered financial company](/usc/12/5381.md?p=a-8) to pay as such debts matured; or
        - (IV) made such transfer to or for the benefit of an [insider](#a-11-H-i-I), or incurred such obligation to or for the benefit of an [insider](#a-11-H-i-I), under an employment contract and not in the ordinary course of business.
    - (B) **Preferential transfers—** The [Corporation](/usc/12/5301.md?p=7) as receiver for any [covered financial company](/usc/12/5381.md?p=a-8) may avoid a transfer of an interest of the [covered financial company](/usc/12/5381.md?p=a-8) in property—
      - (i) to or for the benefit of a creditor;
      - (ii) for or on account of an antecedent debt that was owed by the [covered financial company](/usc/12/5381.md?p=a-8) before the transfer was made;
      - (iii) that was made while the [covered financial company](/usc/12/5381.md?p=a-8) was [insolvent](#a-11-H-ii-II);
      - (iv) that was made—
        - (I) 90 days or less before the date on which the [Corporation](/usc/12/5301.md?p=7) was appointed receiver; or
        - (II) more than 90 days, but less than 1 year before the date on which the [Corporation](/usc/12/5301.md?p=7) was appointed receiver, if such creditor at the time of the transfer was an [insider](#a-11-H-i-I); and
      - (v) that enables the creditor to receive more than the creditor would receive if—
        - (I) the [covered financial company](/usc/12/5381.md?p=a-8) had been liquidated under [chapter 7](/usc/12/ch7.md) of the [Bankruptcy Code](/usc/12/5381.md?p=a-2);
        - (II) the transfer had not been made; and
        - (III) the creditor received payment of such debt to the extent provided by the provisions of [chapter 7](/usc/12/ch7.md) of the [Bankruptcy Code](/usc/12/5381.md?p=a-2).
    - (C) **Post-receivership transactions—** The [Corporation](/usc/12/5301.md?p=7) as receiver for any [covered financial company](/usc/12/5381.md?p=a-8) may avoid a transfer of property of the receivership that occurred after the [Corporation](/usc/12/5301.md?p=7) was appointed receiver that was not authorized under this subchapter by the [Corporation](/usc/12/5301.md?p=7) as receiver.
    - (D) **Right of recovery—** To the extent that a transfer is avoided under subparagraph [(A)](#a-11-A), [(B)](#a-11-B), or [(C)](#a-11-C), the [Corporation](/usc/12/5301.md?p=7) may recover, for the benefit of the [covered financial company](/usc/12/5381.md?p=a-8), the property transferred or, if a [court](/usc/12/5381.md?p=a-6) so orders, the [value](#a-11-H-i-III) of such property (at the time of such transfer) from—
      - (i) the initial transferee of such transfer or the [person](/usc/12/5481.md?p=19) for whose benefit such transfer was made; or
      - (ii) any immediate or mediate transferee of any such initial transferee.
    - (E) **Rights of transferee or obligee—** The [Corporation](/usc/12/5301.md?p=7) may not recover under [subparagraph (D)(ii)](#a-11-D-ii) from—
      - (i) any transferee that takes for [value](#a-11-H-i-III), [including](/usc/12/25b.md?p=a-3) in satisfaction of or to secure a present or antecedent debt, in good faith, and without knowledge of the voidability of the transfer avoided; or
      - (ii) any immediate or mediate good faith transferee of such transferee.
    - (F) **Defenses—** Subject to the other provisions of this subchapter—
      - (i) a transferee or obligee from which the [Corporation](/usc/12/5301.md?p=7) seeks to recover a transfer or to avoid an obligation under subparagraph [(A)](#a-11-A), [(B)](#a-11-B), [(C)](#a-11-C), or [(D)](#a-11-D) shall have the same defenses available to a transferee or obligee from which a trustee seeks to recover a transfer or avoid an obligation under sections 547, 548, and 549 of the [Bankruptcy Code](/usc/12/5381.md?p=a-2); and
      - (ii) the authority of the [Corporation](/usc/12/5301.md?p=7) to recover a transfer or avoid an obligation shall be subject to subsections (b) and (c) of section 546, section 547(c), and [section 548(c)](/usc/12/548.md) of the [Bankruptcy Code](/usc/12/5381.md?p=a-2).
    - (G) **Rights under this section—** The rights of the [Corporation](/usc/12/5301.md?p=7) as receiver under this section shall be superior to any rights of a trustee or any other party (other than a [Federal agency](/usc/12/3101.md?p=5)) under the [Bankruptcy Code](/usc/12/5381.md?p=a-2).
    - (H) **Rules of construction; definitions—** For purposes of—
      - (i) subparagraphs [(A)](#a-11-A) and [(B)](#a-11-B)—
        - (I) the term “insider” has the same meaning as in section 101(31) of the [Bankruptcy Code](/usc/12/5381.md?p=a-2);
        - (II) a transfer is made when such transfer is so perfected that a bona fide purchaser from the [covered financial company](/usc/12/5381.md?p=a-8) against whom applicable law permits such transfer to be perfected cannot [acquire](/usc/12/1467a.md?p=a-1-J) an interest in the property transferred that is superior to the interest in such property of the transferee, but if such transfer is not so perfected before the date on which the [Corporation](/usc/12/5301.md?p=7) is appointed as receiver for the [covered financial company](/usc/12/5381.md?p=a-8), such transfer is made immediately before the date of such appointment; and
        - (III) the term “value” means property, or satisfaction or securing of a present or antecedent debt of the [covered financial company](/usc/12/5381.md?p=a-8), but does not include an unperformed promise to furnish support to the [covered financial company](/usc/12/5381.md?p=a-8); and
      - (ii) [subparagraph (B)](#a-11-B)—
        - (I) the [covered financial company](/usc/12/5381.md?p=a-8) is presumed to have been [insolvent](#a-11-H-ii-II) on and during the 90-day period immediately preceding the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver; and
        - (II) the term “insolvent” has the same meaning as in section 101(32) of the [Bankruptcy Code](/usc/12/5381.md?p=a-2).
  - (12) **Setoff—**
    - (A) **Generally—** Except as otherwise provided in this subchapter, any right of a creditor to offset a mutual debt owed by the creditor to any [covered financial company](/usc/12/5381.md?p=a-8) that arose before the [Corporation](/usc/12/5301.md?p=7) was appointed as receiver for the [covered financial company](/usc/12/5381.md?p=a-8) against a [claim](/usc/12/5381.md?p=a-4) of such creditor may be asserted if enforceable under applicable noninsolvency law, except to the extent that—
      - (i) the [claim](/usc/12/5381.md?p=a-4) of the creditor against the [covered financial company](/usc/12/5381.md?p=a-8) is disallowed;
      - (ii) the [claim](/usc/12/5381.md?p=a-4) was transferred, by an entity other than the [covered financial company](/usc/12/5381.md?p=a-8), to the creditor—
        - (I) after the [Corporation](/usc/12/5301.md?p=7) was appointed as receiver of the [covered financial company](/usc/12/5381.md?p=a-8); or
        - (II)
          - (aa) after the 90-day period preceding the date on which the [Corporation](/usc/12/5301.md?p=7) was appointed as receiver for the [covered financial company](/usc/12/5381.md?p=a-8); and
          - (bb) while the [covered financial company](/usc/12/5381.md?p=a-8) was [insolvent](#a-11-H-ii-II) (except for a setoff in connection with a qualified financial contract); or
      - (iii) the debt owed to the [covered financial company](/usc/12/5381.md?p=a-8) was incurred by the [covered financial company](/usc/12/5381.md?p=a-8)—
        - (I) after the 90-day period preceding the date on which the [Corporation](/usc/12/5301.md?p=7) was appointed as receiver for the [covered financial company](/usc/12/5381.md?p=a-8);
        - (II) while the [covered financial company](/usc/12/5381.md?p=a-8) was [insolvent](#a-11-H-ii-II); and
        - (III) for the purpose of obtaining a right of setoff against the [covered financial company](/usc/12/5381.md?p=a-8) (except for a setoff in connection with a qualified financial contract).
    - (B) **Insufficiency—**
      - (i) **In general—** Except with respect to a setoff in connection with a qualified financial contract, if a creditor offsets a mutual debt owed to the [covered financial company](/usc/12/5381.md?p=a-8) against a [claim](/usc/12/5381.md?p=a-4) of the [covered financial company](/usc/12/5381.md?p=a-8) on or within the 90-day period preceding the date on which the [Corporation](/usc/12/5301.md?p=7) is appointed as receiver for the [covered financial company](/usc/12/5381.md?p=a-8), the [Corporation](/usc/12/5301.md?p=7) may recover from the creditor the amount so offset, to the extent that any [insufficiency](#a-12-B-ii) on the date of such setoff is less than the [insufficiency](#a-12-B-ii) on the later of—
        - (I) the date that is 90 days before the date on which the [Corporation](/usc/12/5301.md?p=7) is appointed as receiver for the [covered financial company](/usc/12/5381.md?p=a-8); or
        - (II) the first day on which there is an [insufficiency](#a-12-B-ii) during the 90-day period preceding the date on which the [Corporation](/usc/12/5301.md?p=7) is appointed as receiver for the [covered financial company](/usc/12/5381.md?p=a-8).
      - (ii) **Definition of insufficiency—** In this subparagraph, the term “insufficiency” means the amount, if any, by which a [claim](/usc/12/5381.md?p=a-4) against the [covered financial company](/usc/12/5381.md?p=a-8) exceeds a mutual debt owed to the [covered financial company](/usc/12/5381.md?p=a-8) by the holder of such [claim](/usc/12/5381.md?p=a-4).
    - (C) **Insolvency—** The term “[insolvent](#a-11-H-ii-II)” has the same meaning as in section 101(32) of the [Bankruptcy Code](/usc/12/5381.md?p=a-2).
    - (D) **Presumption of insolvency—** For purposes of this paragraph, the [covered financial company](/usc/12/5381.md?p=a-8) is presumed to have been [insolvent](#a-11-H-ii-II) on and during the 90-day period preceding the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver.
    - (E) **Limitation—** Nothing in this [paragraph (12)](#a-12) shall be the basis for any right of setoff where no such right exists under applicable noninsolvency law.
    - (F) **Priority claim—** Except as otherwise provided in this subchapter, the [Corporation](/usc/12/5301.md?p=7) as receiver for the [covered financial company](/usc/12/5381.md?p=a-8) may sell or transfer any assets free and clear of the setoff rights of any party, except that such party shall be entitled to a [claim](/usc/12/5381.md?p=a-4), subordinate to the [claims](/usc/12/5381.md?p=a-4) payable under subparagraphs [(A)](#b-1-A), [(B)](#b-1-B), [(C)](#b-1-C), and [(D)](#b-1-D) of subsection (b)(1), but senior to all other unsecured liabilities defined in [subsection (b)(1)(E)](#b-1-E), in an amount equal to the [value](#a-11-H-i-III) of such setoff rights.
  - (13) **Attachment of assets and other injunctive relief—** Subject to [paragraph (14)](#a-14), any [court](/usc/12/5381.md?p=a-6) of competent jurisdiction may, at the request of the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), issue an order in accordance with [Rule 65](/usc/28a/civil-65.md) of the Federal Rules of Civil Procedure, [including](/usc/12/25b.md?p=a-3) an order placing the assets of [any person](/usc/12/1715z–4a.md?p=a-2) designated by the [Corporation](/usc/12/5301.md?p=7) under the [control](/usc/12/24a.md?p=g-1) of the [court](/usc/12/5381.md?p=a-6) and appointing a trustee to hold such assets.
  - (14) **Standards—**
    - (A) **Showing—** [Rule 65](/usc/28a/civil-65.md) of the Federal Rules of Civil Procedure shall apply with respect to any proceeding under [paragraph (13)](#a-13), without regard to the requirement that the applicant show that the injury, loss, or damage is irreparable and immediate.
    - (B) **State proceeding—** If, in the case of any proceeding in a [State](/usc/12/5301.md?p=16) [court](/usc/12/5381.md?p=a-6), the [court](/usc/12/5381.md?p=a-6) determines that rules of civil procedure available under the laws of the [State](/usc/12/5301.md?p=16) provide substantially similar protections of the right of the parties to due process as provided under [Rule 65](/usc/12/65.md) (as modified with respect to such proceeding by [subparagraph (A)](#a-14-A)), the relief sought by the [Corporation](/usc/12/5301.md?p=7) pursuant to [paragraph (14)](#a-14) may be requested under the laws of such [State](/usc/12/5301.md?p=16).
  - (15) **Treatment of claims arising from breach of contracts executed by the Corporation as receiver—** Notwithstanding any other provision of this subchapter, any final and non-appealable judgment for monetary damages entered against the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) for the breach of an agreement executed or approved by the [Corporation](/usc/12/5301.md?p=7) after the date of its appointment shall be paid as an administrative expense of the receiver. Nothing in this paragraph shall be construed to limit the power of a receiver to exercise any rights under contract or law, [including](/usc/12/25b.md?p=a-3) to terminate, breach, cancel, or otherwise discontinue such agreement.
  - (16) **Accounting and recordkeeping requirements—**
    - (A) **In general—** The [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) shall, consistent with the accounting and reporting practices and procedures established by the [Corporation](/usc/12/5301.md?p=7), maintain a full accounting of each receivership or other disposition of any [covered financial company](/usc/12/5381.md?p=a-8).
    - (B) **Annual accounting or report—** With respect to each receivership to which the [Corporation](/usc/12/5301.md?p=7) is appointed, the [Corporation](/usc/12/5301.md?p=7) shall make an annual accounting or report, as appropriate, available to the [Secretary](/usc/12/5301.md?p=14) and the Comptroller General of the United States.
    - (C) **Availability of reports—** Any report prepared pursuant to [subparagraph (B)](#a-16-B) and [section 5383(c)(3) of this title](/usc/12/5383.md?p=c-3) shall be made available to the public by the [Corporation](/usc/12/5301.md?p=7).
    - (D) **Recordkeeping requirement—**
      - (i) **In general—** The [Corporation](/usc/12/5301.md?p=7) shall prescribe such regulations and establish such retention schedules as are necessary to maintain the documents and [records](#a-16-D-iii) of the [Corporation](/usc/12/5301.md?p=7) generated in exercising the authorities of this subchapter and the [records of a covered financial company](#a-16-D-iii) for which the [Corporation](/usc/12/5301.md?p=7) is appointed receiver, with due regard for—
        - (I) the avoidance of duplicative record retention; and
        - (II) the expected evidentiary needs of the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) and the public regarding the [records](#a-16-D-iii) of [covered financial companies](/usc/12/5381.md?p=a-8).
      - (ii) **Retention of records—** Unless otherwise required by applicable Federal law or [court](/usc/12/5381.md?p=a-6) order, the [Corporation](/usc/12/5301.md?p=7) may not, at any time, destroy any [records](#a-16-D-iii) that are subject to [clause (i)](#a-16-D-i).
      - (iii) **Records defined—** As used in this subparagraph, the terms “records” and “records of a covered financial company” mean any document, book, paper, map, photograph, microfiche, microfilm, computer or electronically-created record generated or maintained by the [covered financial company](/usc/12/5381.md?p=a-8) in the course of and necessary to its transaction of business.
- (b) **Priority of expenses and unsecured claims—**
  - (1) **In general—** Unsecured [claims](/usc/12/5381.md?p=a-4) against a [covered financial company](/usc/12/5381.md?p=a-8), or the [Corporation](/usc/12/5301.md?p=7) as receiver for such [covered financial company](/usc/12/5381.md?p=a-8) under this section, that are proven to the satisfaction of the receiver shall have priority in the following order:
    - (A) [Administrative expenses of the receiver](/usc/12/5381.md?p=a-1).
    - (B) Any amounts owed to the United States, unless the United States agrees or consents otherwise.
    - (C) Wages, salaries, or [commissions](/usc/12/5301.md?p=5), [including](/usc/12/25b.md?p=a-3) vacation, severance, and sick leave pay earned by an individual (other than an individual described in [subparagraph (G)](#b-1-G)), but only to the extent of $11,725 for each individual (as indexed for inflation, by regulation of the [Corporation](/usc/12/5301.md?p=7)) earned not later than 180 days before the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver.
    - (D) Contributions owed to employee benefit plans arising from services rendered not later than 180 days before the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver, to the extent of the number of employees covered by each such plan, multiplied by $11,725 (as indexed for inflation, by regulation of the [Corporation](/usc/12/5301.md?p=7)), less the aggregate amount paid to such employees under [subparagraph (C)](#b-1-C), plus the aggregate amount paid by the receivership on behalf of such employees to any other employee benefit plan.
    - (E) Any other general or senior liability of the [covered financial company](/usc/12/5381.md?p=a-8) (which is not a liability described under subparagraph [(F)](#b-1-F), [(G)](#b-1-G), or [(H)](#b-1-H)).
    - (F) Any obligation subordinated to general creditors (which is not an obligation described under subparagraph [(G)](#b-1-G) or [(H)](#b-1-H)).
    - (G) Any wages, salaries, or [commissions](/usc/12/5301.md?p=5), [including](/usc/12/25b.md?p=a-3) vacation, severance, and sick leave pay earned, owed to senior executives and [directors](/usc/12/2279bb.md?p=3) of the [covered financial company](/usc/12/5381.md?p=a-8).
    - (H) Any obligation to shareholders, [members](/usc/12/1426a.md?p=g-1), general partners, limited partners, or other [persons](/usc/12/5481.md?p=19), with interests in the equity of the [covered financial company](/usc/12/5381.md?p=a-8) arising as a result of their status as shareholders, [members](/usc/12/1426a.md?p=g-1), general partners, limited partners, or other [persons](/usc/12/5481.md?p=19) with interests in the equity of the [covered financial company](/usc/12/5381.md?p=a-8).
  - (2) **Post-receivership financing priority—** In the event that the [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), is unable to obtain unsecured [credit](/usc/12/5481.md?p=7) for the [covered financial company](/usc/12/5381.md?p=a-8) from commercial sources, the [Corporation](/usc/12/5301.md?p=7) as receiver may obtain [credit](/usc/12/5481.md?p=7) or incur debt on the part of the [covered financial company](/usc/12/5381.md?p=a-8), which shall have priority over any or all [administrative expenses of the receiver](/usc/12/5381.md?p=a-1) under [paragraph (1)(A)](#b-1-A).
  - (3) **Claims of the United States—** Unsecured [claims](/usc/12/5381.md?p=a-4) of the United States shall, at a minimum, have a higher priority than liabilities of the [covered financial company](/usc/12/5381.md?p=a-8) that count as regulatory [capital](/usc/12/51c.md).
  - (4) **Creditors similarly situated—** All claimants of a [covered financial company](/usc/12/5381.md?p=a-8) that are similarly situated under [paragraph (1)](#b-1) shall be treated in a similar manner, except that the [Corporation](/usc/12/5301.md?p=7) may take any action ([including](/usc/12/25b.md?p=a-3) making payments, subject to [subsection (o)(1)(D)(i)](#o-1-D-i)) that does not comply with this subsection, if—
    - (A) the [Corporation](/usc/12/5301.md?p=7) determines that such action is necessary—
      - (i) to maximize the [value](#a-11-H-i-III) of the assets of the [covered financial company](/usc/12/5381.md?p=a-8);
      - (ii) to initiate and continue operations essential to implementation of the receivership or any [bridge financial company](/usc/12/5381.md?p=a-3);
      - (iii) to maximize the present [value](#a-11-H-i-III) return from the sale or other disposition of the assets of the [covered financial company](/usc/12/5381.md?p=a-8); or
      - (iv) to minimize the amount of any loss realized upon the sale or other disposition of the assets of the [covered financial company](/usc/12/5381.md?p=a-8); and
    - (B) all claimants that are similarly situated under [paragraph (1)](#b-1) receive not less than the amount provided in paragraphs [(2)](#d-2) and [(3)](#d-3) of subsection (d).
  - (5) **Secured claims unaffected—** This section shall not affect secured [claims](/usc/12/5381.md?p=a-4) or security entitlements in respect of assets or property held by the [covered financial company](/usc/12/5381.md?p=a-8), except to the extent that the security is insufficient to satisfy the [claim](/usc/12/5381.md?p=a-4), and then only with regard to the difference between the [claim](/usc/12/5381.md?p=a-4) and the amount realized from the security.
  - (6) **Priority of expenses and unsecured claims in the orderly liquidation of SIPC member—** Where the [Corporation](/usc/12/5301.md?p=7) is appointed as receiver for a [covered broker or dealer](/usc/12/5381.md?p=a-7), unsecured [claims](/usc/12/5381.md?p=a-4) against such [covered broker or dealer](/usc/12/5381.md?p=a-7), or the [Corporation](/usc/12/5301.md?p=7) as receiver for such [covered broker or dealer](/usc/12/5381.md?p=a-7) under this section, that are proven to the satisfaction of the receiver under [section 5385(e) of this title](/usc/12/5385.md?p=e), shall have the priority prescribed in [paragraph (1)](#b-1), except that—
    - (A) [SIPC](/usc/12/5381.md?p=a-16) shall be entitled to recover administrative expenses incurred in performing its responsibilities under [section 5385 of this title](/usc/12/5385.md) on an equal basis with the [Corporation](/usc/12/5301.md?p=7), in accordance with [paragraph (1)(A)](#b-1-A);
    - (B) the [Corporation](/usc/12/5301.md?p=7) shall be entitled to recover any amounts paid to [customers](/usc/12/5381.md?p=a-10) or to [SIPC](/usc/12/5381.md?p=a-16) pursuant to [section 5385(f) of this title](/usc/12/5385.md?p=f), in accordance with [paragraph (1)(B)](#b-1-B);
    - (C) [SIPC](/usc/12/5381.md?p=a-16) shall be entitled to recover any amounts paid out of the [SIPC](/usc/12/5381.md?p=a-16) [Fund](/usc/12/4702.md?p=10) to meet its obligations under [section 5385 of this title](/usc/12/5385.md) and under the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.), which [claim](/usc/12/5381.md?p=a-4) shall be subordinate to the [claims](/usc/12/5381.md?p=a-4) payable under subparagraphs [(A)](#b-1-A) and [(B)](#b-1-B) of paragraph (1), but senior to all other [claims](/usc/12/5381.md?p=a-4); and
    - (D) the [Corporation](/usc/12/5301.md?p=7) may, after paying any proven [claims](/usc/12/5381.md?p=a-4) to [customers](/usc/12/5381.md?p=a-10) under [section 5385 of this title](/usc/12/5385.md) and the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.), and as provided above, pay dividends on other proven [claims](/usc/12/5381.md?p=a-4), in its discretion, and to the extent that [funds](/usc/12/4702.md?p=10) are available, in accordance with the priorities set forth in [paragraph (1)](#b-1).
- (c) **Provisions relating to contracts entered into before appointment of receiver—**
  - (1) **Authority to repudiate contracts—** In addition to any other rights that a receiver may have, the [Corporation](/usc/12/5301.md?p=7) as receiver for any [covered financial company](/usc/12/5381.md?p=a-8) may disaffirm or repudiate any contract or lease—
    - (A) to which the [covered financial company](/usc/12/5381.md?p=a-8) is a party;
    - (B) the performance of which the [Corporation](/usc/12/5301.md?p=7) as receiver, in the discretion of the [Corporation](/usc/12/5301.md?p=7), determines to be burdensome; and
    - (C) the disaffirmance or repudiation of which the [Corporation](/usc/12/5301.md?p=7) as receiver determines, in the discretion of the [Corporation](/usc/12/5301.md?p=7), will promote the orderly administration of the affairs of the [covered financial company](/usc/12/5381.md?p=a-8).
  - (2) **Timing of repudiation—** The [Corporation](/usc/12/5301.md?p=7), as receiver for any [covered financial company](/usc/12/5381.md?p=a-8), shall determine whether or not to exercise the rights of repudiation under this section within a reasonable period of time.
  - (3) **Claims for damages for repudiation—**
    - (A) **In general—** Except as provided in paragraphs [(4)](#c-4), [(5)](#c-5), and [(6)](#c-6) and in subparagraphs (C), (D), and (E) of this paragraph, the liability of the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) for the disaffirmance or repudiation of any contract pursuant to [paragraph (1)](#c-1) shall be—
      - (i) limited to [actual direct compensatory damages](#c-3-B); and
      - (ii) determined as of—
        - (I) the date of the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver; or
        - (II) in the case of any contract or agreement referred to in [paragraph (8)](#c-8), the date of the disaffirmance or repudiation of such contract or agreement.
    - (B) **No liability for other damages—** For purposes of [subparagraph (A)](#c-3-A), the term “actual direct compensatory damages” does not include—
      - (i) punitive or exemplary damages;
      - (ii) damages for lost profits or opportunity; or
      - (iii) damages for pain and suffering.
    - (C) **Measure of damages for repudiation of qualified financial contracts—** In the case of any qualified financial contract or agreement to which [paragraph (8)](#c-8) applies, compensatory damages shall be—
      - (i) deemed to include normal and reasonable costs of cover or other reasonable measures of damages utilized in the industries for such contract and agreement [claims](/usc/12/5381.md?p=a-4); and
      - (ii) paid in accordance with this paragraph and [subsection (d)](#d), except as otherwise specifically provided in this subsection.
    - (D) **Measure of damages for repudiation or disaffirmance of debt obligation—** In the case of any debt for borrowed money or evidenced by a security, [actual direct compensatory damages](#c-3-B) shall be no less than the amount lent plus accrued interest plus any accreted original issue discount as of the date the [Corporation](/usc/12/5301.md?p=7) was appointed receiver of the [covered financial company](/usc/12/5381.md?p=a-8) and, to the extent that an allowed secured [claim](/usc/12/5381.md?p=a-4) is secured by property the [value](#a-11-H-i-III) of which is greater than the amount of such [claim](/usc/12/5381.md?p=a-4) and any accrued interest through the date of repudiation or disaffirmance, such accrued interest pursuant to [paragraph (1)](#c-1).
    - (E) **Measure of damages for repudiation or disaffirmance of contingent obligation—** In the case of any contingent obligation of a [covered financial company](/usc/12/5381.md?p=a-8) consisting of any obligation under a guarantee, letter of [credit](/usc/12/5481.md?p=7), loan commitment, or similar [credit](/usc/12/5481.md?p=7) obligation, the [Corporation](/usc/12/5301.md?p=7) may, by rule or regulation, prescribe that [actual direct compensatory damages](#c-3-B) shall be no less than the estimated [value](#a-11-H-i-III) of the [claim](/usc/12/5381.md?p=a-4) as of the date the [Corporation](/usc/12/5301.md?p=7) was appointed receiver of the [covered financial company](/usc/12/5381.md?p=a-8), as such [value](#a-11-H-i-III) is measured based on the likelihood that such contingent [claim](/usc/12/5381.md?p=a-4) would become fixed and the probable magnitude thereof.
  - (4) **Leases under which the covered financial company is the lessee—**
    - (A) **In general—** If the [Corporation](/usc/12/5301.md?p=7) as receiver disaffirms or repudiates a lease under which the [covered financial company](/usc/12/5381.md?p=a-8) is the lessee, the receiver shall not be liable for any damages (other than damages determined pursuant to [subparagraph (B)](#c-4-B)) for the disaffirmance or repudiation of such lease.
    - (B) **Payments of rent—** Notwithstanding [subparagraph (A)](#c-4-A), the lessor under a lease to which [subparagraph (A)](#c-4-A) would otherwise apply shall—
      - (i) be entitled to the contractual rent accruing before the later of the date on which—
        - (I) the notice of disaffirmance or repudiation is mailed; or
        - (II) the disaffirmance or repudiation becomes effective, unless the lessor is in [default](/usc/12/1467a.md?p=e-7-A) or breach of the terms of the lease;
      - (ii) have no [claim](/usc/12/5381.md?p=a-4) for damages under any acceleration clause or other penalty provision in the lease; and
      - (iii) have a [claim](/usc/12/5381.md?p=a-4) for any unpaid rent, subject to all appropriate offsets and defenses, due as of the date of the appointment which shall be paid in accordance with this paragraph and [subsection (d)](#d).
  - (5) **Leases under which the covered financial company is the lessor—**
    - (A) **In general—** If the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) repudiates an unexpired written lease of real property of the [covered financial company](/usc/12/5381.md?p=a-8) under which the [covered financial company](/usc/12/5381.md?p=a-8) is the lessor and the lessee is not, as of the date of such repudiation, in [default](/usc/12/1467a.md?p=e-7-A), the lessee under such lease may either—
      - (i) treat the lease as terminated by such repudiation; or
      - (ii) remain in possession of the leasehold interest for the balance of the term of the lease, unless the lessee [defaults](/usc/12/1467a.md?p=e-7-A) under the terms of the lease after the date of such repudiation.
    - (B) **Provisions applicable to lessee remaining in possession—** If any lessee under a lease described in [subparagraph (A)](#c-5-A) remains in possession of a leasehold interest pursuant to [clause (ii)](#c-5-A-ii) of subparagraph (A)—
      - (i) the lessee—
        - (I) shall continue to pay the contractual rent pursuant to the terms of the lease after the date of the repudiation of such lease; and
        - (II) may offset against any rent payment which accrues after the date of the repudiation of the lease, any damages which accrue after such date due to the nonperformance of any obligation of the [covered financial company](/usc/12/5381.md?p=a-8) under the lease after such date; and
      - (ii) the [Corporation](/usc/12/5301.md?p=7) as receiver shall not be liable to the lessee for any damages arising after such date as a result of the repudiation, other than the amount of any offset allowed under [clause (i)(II)](#c-5-B-i-II).
  - (6) **Contracts for the sale of real property—**
    - (A) **In general—** If the receiver repudiates any contract (which meets the requirements of [subsection (a)(6)](#a-6)) for the sale of real property, and the purchaser of such real property under such contract is in possession and is not, as of the date of such repudiation, in [default](/usc/12/1467a.md?p=e-7-A), such purchaser may either—
      - (i) treat the contract as terminated by such repudiation; or
      - (ii) remain in possession of such real property.
    - (B) **Provisions applicable to purchaser remaining in possession—** If any purchaser of real property under any contract described in [subparagraph (A)](#c-6-A) remains in possession of such property pursuant to [clause (ii)](#c-6-A-ii) of subparagraph (A)—
      - (i) the purchaser—
        - (I) shall continue to make all payments due under the contract after the date of the repudiation of the contract; and
        - (II) may offset against any such payments any damages which accrue after such date due to the nonperformance (after such date) of any obligation of the [covered financial company](/usc/12/5381.md?p=a-8) under the contract; and
      - (ii) the [Corporation](/usc/12/5301.md?p=7) as receiver shall—
        - (I) not be liable to the purchaser for any damages arising after such date as a result of the repudiation, other than the amount of any offset allowed under [clause (i)(II)](#c-6-B-i-II);
        - (II) deliver title to the purchaser in accordance with the provisions of the contract; and
        - (III) have no obligation under the contract other than the performance required under [subclause (II)](#c-6-B-ii-II).
    - (C) **Assignment and sale allowed—**
      - (i) **In general—** No provision of this paragraph shall be construed as limiting the right of the [Corporation](/usc/12/5301.md?p=7) as receiver to assign the contract described in [subparagraph (A)](#c-6-A) and sell the property, subject to the contract and the provisions of this paragraph.
      - (ii) **No liability after assignment and sale—** If an assignment and sale described in [clause (i)](#c-6-C-i) is consummated, the [Corporation](/usc/12/5301.md?p=7) as receiver shall have no further liability under the contract described in [subparagraph (A)](#c-6-A) or with respect to the real property which was the subject of such contract.
  - (7) **Provisions applicable to service contracts—**
    - (A) **Services performed before appointment—** In the case of any contract for services between [any person](/usc/12/1715z–4a.md?p=a-2) and any [covered financial company](/usc/12/5381.md?p=a-8) for which the [Corporation](/usc/12/5301.md?p=7) has been appointed receiver, any [claim](/usc/12/5381.md?p=a-4) of such [person](#c-8-D-x) for services performed before the date of appointment shall be—
      - (i) a [claim](/usc/12/5381.md?p=a-4) to be paid in accordance with subsections [(a)](#a), [(b)](#b), and [(d)](#d); and
      - (ii) deemed to have arisen as of the date on which the receiver was appointed.
    - (B) **Services performed after appointment and prior to repudiation—** If, in the case of any contract for services described in [subparagraph (A)](#c-7-A), the [Corporation](/usc/12/5301.md?p=7) as receiver accepts performance by the other [person](#c-8-D-x) before making any determination to exercise the right of repudiation of such contract under this section—
      - (i) the other party shall be paid under the terms of the contract for the services performed; and
      - (ii) the amount of such payment shall be treated as an administrative expense of the receivership.
    - (C) **Acceptance of performance no bar to subsequent repudiation—** The acceptance by the [Corporation](/usc/12/5301.md?p=7) as receiver for services referred to in [subparagraph (B)](#c-7-B) in connection with a contract described in [subparagraph (B)](#c-7-B) shall not affect the right of the [Corporation](/usc/12/5301.md?p=7) as receiver to repudiate such contract under this section at any time after such performance.
  - (8) **Certain qualified financial contracts—**
    - (A) **Rights of parties to contracts—** Subject to [subsection (a)(8)](#a-8) and paragraphs (9) and (10) of this subsection, and notwithstanding any other provision of this section, any other provision of Federal law, or the law of any [State](/usc/12/5301.md?p=16), no [person](#c-8-D-x) shall be stayed or prohibited from exercising—
      - (i) any right that such [person](#c-8-D-x) has to cause the termination, liquidation, or acceleration of any [qualified financial contract](#c-8-D-i) with a [covered financial company](/usc/12/5381.md?p=a-8) which arises upon the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver for such [covered financial company](/usc/12/5381.md?p=a-8) or at any time after such appointment;
      - (ii) any right under any security agreement or arrangement or other [credit](/usc/12/5481.md?p=7) enhancement related to one or more [qualified financial contracts](#c-8-D-i) described in [clause (i)](#c-8-A-i); or
      - (iii) any right to offset or net out any termination [value](#a-11-H-i-III), payment amount, or other [transfer](#c-8-D-ix) obligation arising under or in connection with 1 or more contracts or agreements described in [clause (i)](#c-8-A-i), [including](/usc/12/25b.md?p=a-3) any master agreement for such contracts or agreements.
    - (B) **Applicability of other provisions—** [Subsection (a)(8)](#a-8) shall apply in the case of any judicial action or proceeding brought against the [Corporation](/usc/12/5301.md?p=7) as receiver referred to in [subparagraph (A)](#c-8-A), or the subject [covered financial company](/usc/12/5381.md?p=a-8), by any party to a contract or agreement described in [subparagraph (A)(i)](#c-8-A-i) with such [covered financial company](/usc/12/5381.md?p=a-8).
    - (C) **Certain transfers not avoidable—**
      - (i) **In general—** Notwithstanding subsection [(a)(11)](#a-11), [(a)(12)](#a-12), or [(c)(12)](#c-12), [section 91 of this title](/usc/12/91.md), or any other provision of Federal or [State](/usc/12/5301.md?p=16) law relating to the avoidance of preferential or fraudulent [transfers](#c-8-D-ix), the [Corporation](/usc/12/5301.md?p=7), whether acting as the [Corporation](/usc/12/5301.md?p=7) or as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), may not avoid any [transfer](#c-8-D-ix) of money or other property in connection with any [qualified financial contract](#c-8-D-i) with a [covered financial company](/usc/12/5381.md?p=a-8).
      - (ii) **Exception for certain transfers—** [Clause (i)](#c-8-C-i) shall not apply to any [transfer](#c-8-D-ix) of money or other property in connection with any [qualified financial contract](#c-8-D-i) with a [covered financial company](/usc/12/5381.md?p=a-8) if the transferee had actual intent to hinder, delay, or defraud such [company](/usc/12/24a.md?p=g-1), the creditors of such [company](/usc/12/24a.md?p=g-1), or the [Corporation](/usc/12/5301.md?p=7) as receiver appointed for such [company](/usc/12/24a.md?p=g-1).
    - (D) **Certain contracts and agreements defined—** For purposes of this subsection, the following definitions shall apply:
      - (i) **Qualified financial contract—** The term “qualified financial contract” means any [securities contract](#c-8-D-ii), [commodity contract](#c-8-D-iii), [forward contract](#c-8-D-iv), [repurchase agreement](#c-8-D-v), [swap agreement](#c-8-D-vi), and any similar agreement that the [Corporation](/usc/12/5301.md?p=7) determines by regulation, resolution, or order to be a qualified financial contract for purposes of this paragraph.
      - (ii) **Securities contract—** The term “securities contract”—
        - (I) means a contract for the purchase, sale, or loan of a security, a certificate of [deposit](/usc/12/5301.md?p=18-A), a [mortgage](/usc/12/1707.md?p=a) loan, any interest in a [mortgage](/usc/12/1707.md?p=a) loan, a group or index of securities, certificates of [deposit](/usc/12/5301.md?p=18-A), or [mortgage](/usc/12/1707.md?p=a) loans or interests therein ([including](/usc/12/25b.md?p=a-3) any interest therein or based on the [value](#a-11-H-i-III) thereof), or any option on any of the foregoing, [including](/usc/12/25b.md?p=a-3) any option to purchase or sell any such security, certificate of [deposit](/usc/12/5301.md?p=18-A), [mortgage](/usc/12/1707.md?p=a) loan, interest, group or index, or option, and [including](/usc/12/25b.md?p=a-3) any repurchase or reverse repurchase transaction on any such security, certificate of [deposit](/usc/12/5301.md?p=18-A), [mortgage](/usc/12/1707.md?p=a) loan, interest, group or index, or option (whether or not such repurchase or reverse repurchase transaction is a “[repurchase agreement](#c-8-D-v)”, as defined in [clause (v)](#c-8-D-v));
        - (II) does not include any purchase, sale, or repurchase obligation under a [participation](/usc/12/2206a.md?p=a-1) in a commercial [mortgage](/usc/12/1707.md?p=a) loan unless the [Corporation](/usc/12/5301.md?p=7) determines by regulation, resolution, or order to include any such agreement within the meaning of such term;
        - (III) means any option entered into on a national securities exchange relating to foreign currencies;
        - (IV) means the guarantee ([including](/usc/12/25b.md?p=a-3) by novation) by or to any securities clearing [agency](/usc/12/1422.md?p=12) of any settlement of cash, securities, certificates of [deposit](/usc/12/5301.md?p=18-A), [mortgage](/usc/12/1707.md?p=a) loans or interests therein, group or index of securities, certificates of [deposit](/usc/12/5301.md?p=18-A) or [mortgage](/usc/12/1707.md?p=a) loans or interests therein ([including](/usc/12/25b.md?p=a-3) any interest therein or based on the [value](#a-11-H-i-III) thereof) or an option on any of the foregoing, [including](/usc/12/25b.md?p=a-3) any option to purchase or sell any such security, certificate of [deposit](/usc/12/5301.md?p=18-A), [mortgage](/usc/12/1707.md?p=a) loan, interest, group or index, or option (whether or not such settlement is in connection with any agreement or transaction referred to in [subclauses (I) through (XII)](#c-8-D-ii-I..c-8-D-ii-XII) (other than [subclause (II)](#c-8-D-ii-II)));
        - (V) means any margin loan;
        - (VI) means any [extension of credit](/usc/12/1843.md?p=c-14-F-iv) for the clearance or settlement of securities transactions;
        - (VII) means any loan transaction coupled with a securities collar transaction, any prepaid securities forward transaction, or any total return [swap](/usc/12/5301.md?p=6) transaction coupled with a securities sale transaction;
        - (VIII) means any other agreement or transaction that is similar to any agreement or transaction referred to in this clause;
        - (IX) means any combination of the agreements or transactions referred to in this clause;
        - (X) means any option to enter into any agreement or transaction referred to in this clause;
        - (XI) means a master agreement that provides for an agreement or transaction referred to in any of [subclauses (I) through (X)](#c-8-D-ii-I..c-8-D-ii-X), other than [subclause (II)](#c-8-D-ii-II), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a [securities contract](#c-8-D-ii) under this clause, except that the master agreement shall be considered to be a [securities contract](#c-8-D-ii) under this clause only with respect to each agreement or transaction under the master agreement that is referred to in any of [subclauses (I) through (X)](#c-8-D-ii-I..c-8-D-ii-X), other than [subclause (II)](#c-8-D-ii-II); and
        - (XII) means any security agreement or arrangement or other [credit](/usc/12/5481.md?p=7) enhancement related to any agreement or transaction referred to in this clause, [including](/usc/12/25b.md?p=a-3) any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in this clause.
      - (iii) **Commodity contract—** The term “commodity contract” means—
        - (I) with respect to a [futures commission merchant](/usc/12/5301.md?p=6), a contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a contract market or [board of trade](/usc/12/5301.md?p=6);
        - (II) with respect to a foreign [futures commission merchant](/usc/12/5301.md?p=6), a foreign future;
        - (III) with respect to a leverage transaction merchant, a leverage transaction;
        - (IV) with respect to a [clearing organization](/usc/12/1787.md?p=c-9-D-ii), a contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a contract market or [board of trade](/usc/12/5301.md?p=6) that is cleared by such [clearing organization](/usc/12/1787.md?p=c-9-D-ii), or commodity option traded on, or subject to the rules of, a contract market or [board of trade](/usc/12/5301.md?p=6) that is cleared by such [clearing organization](/usc/12/1787.md?p=c-9-D-ii);
        - (V) with respect to a commodity options dealer, a commodity option;
        - (VI) any other agreement or transaction that is similar to any agreement or transaction referred to in this clause;
        - (VII) any combination of the agreements or transactions referred to in this clause;
        - (VIII) any option to enter into any agreement or transaction referred to in this clause;
        - (IX) a master agreement that provides for an agreement or transaction referred to in any of [subclauses (I) through (VIII)](#c-8-D-iii-I..c-8-D-iii-VIII), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a [commodity contract](#c-8-D-iii) under this clause, except that the master agreement shall be considered to be a [commodity contract](#c-8-D-iii) under this clause only with respect to each agreement or transaction under the master agreement that is referred to in any of [subclauses (I) through (VIII)](#c-8-D-iii-I..c-8-D-iii-VIII); or
        - (X) any security agreement or arrangement or other [credit](/usc/12/5481.md?p=7) enhancement related to any agreement or transaction referred to in this clause, [including](/usc/12/25b.md?p=a-3) any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in this clause.
      - (iv) **Forward contract—** The term “forward contract” means—
        - (I) a contract (other than a [commodity contract](#c-8-D-iii)) for the purchase, sale, or [transfer](#c-8-D-ix) of a commodity or any similar good, article, service, right, or interest which is presently or in the future becomes the subject of dealing in the [forward contract](#c-8-D-iv) trade, or product or byproduct thereof, with a [maturity date](/usc/12/1707.md?p=c) that is more than 2 days after the date on which the contract is entered into, [including](/usc/12/25b.md?p=a-3) a repurchase or reverse repurchase transaction (whether or not such repurchase or reverse repurchase transaction is a “[repurchase agreement](#c-8-D-v)”, as defined in [clause (v)](#c-8-D-v)), consignment, lease, [swap](/usc/12/5301.md?p=6), hedge transaction, [deposit](/usc/12/5301.md?p=18-A), loan, option, allocated transaction, unallocated transaction, or any other similar agreement;
        - (II) any combination of agreements or transactions referred to in subclauses [(I)](#c-8-D-iv-I) and [(III)](#c-8-D-iv-III);
        - (III) any option to enter into any agreement or transaction referred to in subclause [(I)](#c-8-D-iv-I) or [(II)](#c-8-D-iv-II);
        - (IV) a master agreement that provides for an agreement or transaction referred to in subclause [(I)](#c-8-D-iv-I), [(II)](#c-8-D-iv-II), or [(III)](#c-8-D-iv-III), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a [forward contract](#c-8-D-iv) under this clause, except that the master agreement shall be considered to be a [forward contract](#c-8-D-iv) under this clause only with respect to each agreement or transaction under the master agreement that is referred to in subclause [(I)](#c-8-D-iv-I), [(II)](#c-8-D-iv-II), or [(III)](#c-8-D-iv-III); or
        - (V) any security agreement or arrangement or other [credit](/usc/12/5481.md?p=7) enhancement related to any agreement or transaction referred to in subclause [(I)](#c-8-D-iv-I), [(II)](#c-8-D-iv-II), [(III)](#c-8-D-iv-III), or [(IV)](#c-8-D-iv-IV), [including](/usc/12/25b.md?p=a-3) any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such subclause.
      - (v) **Repurchase agreement—** The term “repurchase agreement” (which definition also applies to a reverse repurchase agreement)—
        - (I) means an agreement, [including](/usc/12/25b.md?p=a-3) related terms, which provides for the [transfer](#c-8-D-ix) of one or more certificates of [deposit](/usc/12/5301.md?p=18-A), [mortgage](/usc/12/1707.md?p=a) related securities (as such term is defined in section 3 of the Securities Exchange Act of 1934 [[15 U.S.C. 78c](/usc/15/78c.md)]), [mortgage](/usc/12/1707.md?p=a) loans, interests in [mortgage](/usc/12/1707.md?p=a)-related securities or [mortgage](/usc/12/1707.md?p=a) loans, eligible bankers’ acceptances, qualified foreign government securities (which, for purposes of this clause, means a security that is a direct obligation of, or that is fully guaranteed by, the central government of a [member](/usc/12/1426a.md?p=g-1) of the Organization for Economic Cooperation and Development, as determined by regulation or order adopted by the [Board of Governors](/usc/12/5301.md?p=3)), or securities that are direct obligations of, or that are fully guaranteed by, the United States or any [agency](/usc/12/1422.md?p=12) of the United States against the [transfer](#c-8-D-ix) of [funds](/usc/12/4702.md?p=10) by the transferee of such certificates of [deposit](/usc/12/5301.md?p=18-A), eligible bankers’ acceptances, securities, [mortgage](/usc/12/1707.md?p=a) loans, or interests with a simultaneous agreement by such transferee to [transfer](#c-8-D-ix) to the transferor thereof certificates of [deposit](/usc/12/5301.md?p=18-A), eligible bankers’ acceptances, securities, [mortgage](/usc/12/1707.md?p=a) loans, or interests as described above, at a date certain not later than 1 year after such [transfers](#c-8-D-ix) or on demand, against the [transfer](#c-8-D-ix) of [funds](/usc/12/4702.md?p=10), or any other similar agreement;
        - (II) does not include any repurchase obligation under a [participation](/usc/12/2206a.md?p=a-1) in a commercial [mortgage](/usc/12/1707.md?p=a) loan, unless the [Corporation](/usc/12/5301.md?p=7) determines, by regulation, resolution, or order to include any such [participation](/usc/12/2206a.md?p=a-1) within the meaning of such term;
        - (III) means any combination of agreements or transactions referred to in subclauses [(I)](#c-8-D-v-I) and [(IV)](#c-8-D-v-IV);
        - (IV) means any option to enter into any agreement or transaction referred to in subclause [(I)](#c-8-D-v-I) or [(III)](#c-8-D-v-III);
        - (V) means a master agreement that provides for an agreement or transaction referred to in subclause [(I)](#c-8-D-v-I), [(III)](#c-8-D-v-III), or [(IV)](#c-8-D-v-IV), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a [repurchase agreement](#c-8-D-v) under this clause, except that the master agreement shall be considered to be a [repurchase agreement](#c-8-D-v) under this subclause only with respect to each agreement or transaction under the master agreement that is referred to in subclause [(I)](#c-8-D-v-I), [(III)](#c-8-D-v-III), or [(IV)](#c-8-D-v-IV); and
        - (VI) means any security agreement or arrangement or other [credit](/usc/12/5481.md?p=7) enhancement related to any agreement or transaction referred to in subclause [(I)](#c-8-D-v-I), [(III)](#c-8-D-v-III), [(IV)](#c-8-D-v-IV), or [(V)](#c-8-D-v-V), [including](/usc/12/25b.md?p=a-3) any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such subclause.
      - (vi) **Swap agreement—** The term “swap agreement” means—
        - (I) any agreement, [including](/usc/12/25b.md?p=a-3) the terms and conditions incorporated by reference in any such agreement, which is an interest rate [swap](/usc/12/5301.md?p=6), option, future, or forward agreement, [including](/usc/12/25b.md?p=a-3) a rate floor, rate cap, rate collar, cross-currency rate [swap](/usc/12/5301.md?p=6), and basis [swap](/usc/12/5301.md?p=6); a spot, same day-tomorrow, tomorrow-next, forward, or other [foreign exchange](/usc/12/5481.md?p=16), precious metals, or other commodity agreement; a currency [swap](/usc/12/5301.md?p=6), option, future, or forward agreement; an equity index or equity [swap](/usc/12/5301.md?p=6), option, future, or forward agreement; a debt index or debt [swap](/usc/12/5301.md?p=6), option, future, or forward agreement; a total return, [credit](/usc/12/5481.md?p=7) spread or [credit](/usc/12/5481.md?p=7) [swap](/usc/12/5301.md?p=6), option, future, or forward agreement; a commodity index or commodity [swap](/usc/12/5301.md?p=6), option, future, or forward agreement; weather [swap](/usc/12/5301.md?p=6), option, future, or forward agreement; an emissions [swap](/usc/12/5301.md?p=6), option, future, or forward agreement; or an inflation [swap](/usc/12/5301.md?p=6), option, future, or forward agreement;
        - (II) any agreement or transaction that is similar to any other agreement or transaction referred to in this clause and that is of a type that has been, is presently, or in the future becomes, the subject of recurrent dealings in the [swap](/usc/12/5301.md?p=6) or other derivatives markets ([including](/usc/12/25b.md?p=a-3) terms and conditions incorporated by reference in such agreement) and that is a forward, [swap](/usc/12/5301.md?p=6), future, option, or spot transaction on one or more rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments, quantitative measures associated with an occurrence, extent of an occurrence, or contingency associated with a financial, commercial, or economic consequence, or economic or financial indices or measures of economic or financial risk or [value](#a-11-H-i-III);
        - (III) any combination of agreements or transactions referred to in this clause;
        - (IV) any option to enter into any agreement or transaction referred to in this clause;
        - (V) a master agreement that provides for an agreement or transaction referred to in subclause [(I)](#c-8-D-vi-I), [(II)](#c-8-D-vi-II), [(III)](#c-8-D-vi-III), or [(IV)](#c-8-D-vi-IV), together with all supplements to any such master agreement, without regard to whether the master agreement contains an agreement or transaction that is not a [swap agreement](#c-8-D-vi) under this clause, except that the master agreement shall be considered to be a [swap agreement](#c-8-D-vi) under this clause only with respect to each agreement or transaction under the master agreement that is referred to in subclause [(I)](#c-8-D-vi-I), [(II)](#c-8-D-vi-II), [(III)](#c-8-D-vi-III), or [(IV)](#c-8-D-vi-IV); and
        - (VI) any security agreement or arrangement or other [credit](/usc/12/5481.md?p=7) enhancement related to any agreement or transaction referred to in any of [subclauses (I) through (V)](#c-8-D-vi-I..c-8-D-vi-V), [including](/usc/12/25b.md?p=a-3) any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such clause.
      - (vii) **Definitions relating to default—** When used in this paragraph and paragraphs [(9)](#c-9) and [(10)](#c-10)—
        - (I) the term “default” means, with respect to a [covered financial company](/usc/12/5381.md?p=a-8), any adjudication or other official decision by any [court](/usc/12/5381.md?p=a-6) of competent jurisdiction, or other public authority pursuant to which the [Corporation](/usc/12/5301.md?p=7) has been appointed receiver; and
        - (II) the term “in danger of default” means a [covered financial company](/usc/12/5381.md?p=a-8) with respect to which the [Corporation](/usc/12/5301.md?p=7) or appropriate [State](/usc/12/5301.md?p=16) authority has determined that—
          - (aa) in the opinion of the [Corporation](/usc/12/5301.md?p=7) or such authority—
            - (AA) the [covered financial company](/usc/12/5381.md?p=a-8) is not likely to be able to pay its obligations in the normal course of business; and
            - (BB) there is no reasonable prospect that the [covered financial company](/usc/12/5381.md?p=a-8) will be able to pay such obligations without Federal assistance; or
          - (bb) in the opinion of the [Corporation](/usc/12/5301.md?p=7) or such authority—
            - (AA) the [covered financial company](/usc/12/5381.md?p=a-8) has incurred or is likely to incur losses that will deplete all or substantially all of its [capital](/usc/12/51c.md); and
            - (BB) there is no reasonable prospect that the [capital](/usc/12/51c.md) will be replenished without Federal assistance.
      - (viii) **Treatment of master agreement as one agreement—** Any master agreement for any contract or agreement described in any of [clauses (i) through (vi)](#c-8-D-i..c-8-D-vi) (or any master agreement for such master agreement or agreements), together with all supplements to such master agreement, shall be treated as a single agreement and a single qualified financial contact. If a master agreement contains provisions relating to agreements or transactions that are not themselves [qualified financial contracts](#c-8-D-i), the master agreement shall be deemed to be a [qualified financial contract](#c-8-D-i) only with respect to those transactions that are themselves [qualified financial contracts](#c-8-D-i).
      - (ix) **Transfer—** The term “transfer” means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with property or with an interest in property, [including](/usc/12/25b.md?p=a-3) retention of title as a security interest and foreclosure of the equity of redemption of the [covered financial company](/usc/12/5381.md?p=a-8).
      - (x) **Person—** The term “person” [includes](/usc/12/25b.md?p=a-3) any governmental entity in addition to any entity included in the definition of such term in [section 1](/usc/12/1.md), [title 1](/usc/1.md).
    - (E) **Clarification—** No provision of law shall be construed as limiting the right or power of the [Corporation](/usc/12/5301.md?p=7), or authorizing any [court](/usc/12/5381.md?p=a-6) or [agency](/usc/12/1422.md?p=12) to limit or delay, in any manner, the right or power of the [Corporation](/usc/12/5301.md?p=7) to [transfer](#c-8-D-ix) any [qualified financial contract](#c-8-D-i) or to disaffirm or repudiate any such contract in accordance with this subsection.
    - (F) **Walkaway clauses not effective—**
      - (i) **In general—** Notwithstanding the provisions of subparagraph (A) of this paragraph and sections 403 and 404 of the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance [Corporation](/usc/12/5301.md?p=7) Improvement Act of 1991 [[12 U.S.C. 4403](/usc/12/4403.md), 4404], no [walkaway clause](#c-8-F-iii) shall be enforceable in a [qualified financial contract](#c-8-D-i) of a [covered financial company](/usc/12/5381.md?p=a-8) in [default](#c-8-D-vii-I).
      - (ii) **Limited suspension of certain obligations—** In the case of a [qualified financial contract](#c-8-D-i) referred to in [clause (i)](#c-8-F-i), any payment or delivery obligations otherwise due from a party pursuant to the [qualified financial contract](#c-8-D-i) shall be suspended from the time at which the [Corporation](/usc/12/5301.md?p=7) is appointed as receiver until the earlier of—
        - (I) the time at which such party receives notice that such contract has been transferred pursuant to [paragraph (10)(A)](#c-10-A); or
        - (II) 5:00 p.m. (eastern time) on the [business day](/usc/12/5002.md?p=5) following the date of the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver.
      - (iii) **Walkaway clause defined—** For purposes of this subparagraph, the term “walkaway clause” means any provision in a [qualified financial contract](#c-8-D-i) that suspends, conditions, or extinguishes a payment obligation of a party, in whole or in part, or does not create a payment obligation of a party that would otherwise exist, solely because of the status of such party as a nondefaulting party in connection with the insolvency of a [covered financial company](/usc/12/5381.md?p=a-8) that is a party to the contract or the appointment of or the exercise of rights or powers by the [Corporation](/usc/12/5301.md?p=7) as receiver for such [covered financial company](/usc/12/5381.md?p=a-8), and not as a result of the exercise by a party of any right to offset, setoff, or net obligations that exist under the contract, any other contract between those parties, or applicable law.
    - (G) **Certain obligations to clearing organizations—** In the event that the [Corporation](/usc/12/5301.md?p=7) has been appointed as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) which is a party to any [qualified financial contract](#c-8-D-i) cleared by or subject to the rules of a [clearing organization](/usc/12/1787.md?p=c-9-D-ii) (as defined in [paragraph (9)(D)](#c-9-D)), the receiver shall use its best efforts to meet all margin, collateral, and settlement obligations of the [covered financial company](/usc/12/5381.md?p=a-8) that arise under [qualified financial contracts](#c-8-D-i) (other than any margin, collateral, or settlement obligation that is not enforceable against the receiver under [paragraph (8)(F)(i)](#c-8-F-i) or [paragraph (10)(B)](#c-10-B)), as required by the rules of the [clearing organization](/usc/12/1787.md?p=c-9-D-ii) when due. Notwithstanding any other provision of this subchapter, if the receiver fails to satisfy any such margin, collateral, or settlement obligations under the rules of the [clearing organization](/usc/12/1787.md?p=c-9-D-ii), the [clearing organization](/usc/12/1787.md?p=c-9-D-ii) shall have the immediate right to exercise, and shall not be stayed from exercising, all of its rights and remedies under its rules and applicable law with respect to any [qualified financial contract](#c-8-D-i) of the [covered financial company](/usc/12/5381.md?p=a-8), [including](/usc/12/25b.md?p=a-3), without limitation, the right to liquidate all positions and collateral of such [covered financial company](/usc/12/5381.md?p=a-8) under the [company](/usc/12/24a.md?p=g-1)’s [qualified financial contracts](#c-8-D-i), and suspend or cease to act for such [covered financial company](/usc/12/5381.md?p=a-8), all in accordance with the rules of the [clearing organization](/usc/12/1787.md?p=c-9-D-ii).
    - (H) **Recordkeeping—**
      - (i) **Joint rulemaking—** The Federal [primary financial regulatory agencies](/usc/12/5301.md?p=12) shall jointly prescribe regulations requiring that [financial companies](/usc/12/5381.md?p=a-11) maintain such records with respect to [qualified financial contracts](#c-8-D-i) ([including](/usc/12/25b.md?p=a-3) market valuations) that the Federal [primary financial regulatory agencies](/usc/12/5301.md?p=12) determine to be necessary or appropriate in order to assist the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) in being able to exercise its rights and fulfill its obligations under this paragraph or paragraph [(9)](#c-9) or [(10)](#c-10).
      - (ii) **Time frame—** The Federal [primary financial regulatory agencies](/usc/12/5301.md?p=12) shall prescribe joint final or interim final regulations not later than 24 months after July 21, 2010.
      - (iii) **Back-up rulemaking authority—** If the Federal [primary financial regulatory agencies](/usc/12/5301.md?p=12) do not prescribe joint final or interim final regulations within the time frame in [clause (ii)](#c-8-H-ii), the Chairperson of the [Council](/usc/12/5301.md?p=8) shall prescribe, in consultation with the [Corporation](/usc/12/5301.md?p=7), the regulations required by [clause (i)](#c-8-H-i).
      - (iv) **Categorization and tiering—** The joint regulations prescribed under [clause (i)](#c-8-H-i) shall, as appropriate, differentiate among [financial companies](/usc/12/5381.md?p=a-11) by taking into consideration their size, risk, complexity, leverage, frequency and dollar amount of [qualified financial contracts](#c-8-D-i), interconnectedness to the financial system, and any other factors deemed appropriate.
  - (9) **Transfer of qualified financial contracts—**
    - (A) **In general—** In making any [transfer](#c-8-D-ix) of assets or liabilities of a [covered financial company](/usc/12/5381.md?p=a-8) in [default](/usc/12/1467a.md?p=e-7-A), which [includes](/usc/12/25b.md?p=a-3) any qualified financial contract, the [Corporation](/usc/12/5301.md?p=7) as receiver for such [covered financial company](/usc/12/5381.md?p=a-8) shall either—
      - (i) [transfer](#c-8-D-ix) to one [financial institution](#c-9-D-i), other than a [financial institution](#c-9-D-i) for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed or which is otherwise the subject of a bankruptcy or insolvency proceeding—
        - (I) all qualified financial contracts between [any person](/usc/12/1715z–4a.md?p=a-2) or any [affiliate](/usc/12/24a.md?p=g-1) of such [person](#c-8-D-x) and the [covered financial company](/usc/12/5381.md?p=a-8) in [default](/usc/12/1467a.md?p=e-7-A);
        - (II) all [claims](/usc/12/5381.md?p=a-4) of such [person](#c-8-D-x) or any [affiliate](/usc/12/24a.md?p=g-1) of such [person](#c-8-D-x) against such [covered financial company](/usc/12/5381.md?p=a-8) under any such contract (other than any [claim](/usc/12/5381.md?p=a-4) which, under the terms of any such contract, is subordinated to the [claims](/usc/12/5381.md?p=a-4) of general unsecured creditors of such [company](/usc/12/24a.md?p=g-1));
        - (III) all [claims](/usc/12/5381.md?p=a-4) of such [covered financial company](/usc/12/5381.md?p=a-8) against such [person](#c-8-D-x) or any [affiliate](/usc/12/24a.md?p=g-1) of such [person](#c-8-D-x) under any such contract; and
        - (IV) all property securing or any other [credit](/usc/12/5481.md?p=7) enhancement for any contract described in [subclause (I)](#c-9-A-i-I) or any [claim](/usc/12/5381.md?p=a-4) described in subclause [(II)](#c-9-A-i-II) or [(III)](#c-9-A-i-III) under any such contract; or
      - (ii) [transfer](#c-8-D-ix) none of the qualified financial contracts, [claims](/usc/12/5381.md?p=a-4), property or other [credit](/usc/12/5481.md?p=7) enhancement referred to in [clause (i)](#c-9-A-i) (with respect to such [person](#c-8-D-x) and any [affiliate](/usc/12/24a.md?p=g-1) of such [person](#c-8-D-x)).
    - (B) **Transfer to foreign bank, financial institution, or branch or agency thereof—** In transferring any qualified financial contracts and related [claims](/usc/12/5381.md?p=a-4) and property under [subparagraph (A)(i)](#c-9-A-i), the [Corporation](/usc/12/5301.md?p=7) as receiver for the [covered financial company](/usc/12/5381.md?p=a-8) shall not make such [transfer](#c-8-D-ix) to a [foreign bank](/usc/12/1817.md?p=j-9-B-i), [financial institution](#c-9-D-i) organized under the laws of a foreign country, or a branch or [agency](/usc/12/1422.md?p=12) of a [foreign bank](/usc/12/1817.md?p=j-9-B-i) or [financial institution](#c-9-D-i) unless, under the law applicable to such [bank](/usc/12/1426a.md?p=g-1), [financial institution](#c-9-D-i), branch or [agency](/usc/12/1422.md?p=12), to the qualified financial contracts, and to any netting contract, any security agreement or arrangement or other [credit](/usc/12/5481.md?p=7) enhancement related to one or more qualified financial contracts, the contractual rights of the parties to such qualified financial contracts, netting contracts, security agreements or arrangements, or other [credit](/usc/12/5481.md?p=7) enhancements are enforceable substantially to the same extent as permitted under this section.
    - (C) **Transfer of contracts subject to the rules of a clearing organization—** In the event that the [Corporation](/usc/12/5301.md?p=7) as receiver for a [financial institution](#c-9-D-i) [transfers](#c-8-D-ix) any qualified financial contract and related [claims](/usc/12/5381.md?p=a-4), property, or [credit](/usc/12/5481.md?p=7) enhancement pursuant to [subparagraph (A)(i)](#c-9-A-i) and such contract is cleared by or subject to the rules of a [clearing organization](#c-9-D-ii), the [clearing organization](#c-9-D-ii) shall not be required to accept the transferee as a [member](/usc/12/1426a.md?p=g-1) by virtue of the [transfer](#c-8-D-ix).
    - (D) **Definitions—** For purposes of this paragraph—
      - (i) the term “financial institution” means a broker or dealer, a [depository institution](/usc/12/24a.md?p=g-2), a [futures commission merchant](/usc/12/5301.md?p=6), a [bridge financial company](/usc/12/5381.md?p=a-3), or any other institution determined by the [Corporation](/usc/12/5301.md?p=7), by regulation, to be a financial institution; and
      - (ii) the term “clearing organization” has the same meaning as in section 402 of the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance [Corporation](/usc/12/5301.md?p=7) Improvement Act of 1991 [[12 U.S.C. 4402](/usc/12/4402.md)].
  - (10) **Notification of transfer—**
    - (A) **In general—**
      - (i) **Notice—** The [Corporation](/usc/12/5301.md?p=7) shall provide notice in accordance with [clause (ii)](#c-10-A-ii), if—
        - (I) the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) in [default](/usc/12/1467a.md?p=e-7-A) or [in danger of default](/usc/12/1467a.md?p=e-7-A) [transfers](#c-8-D-ix) any assets or liabilities of the [covered financial company](/usc/12/5381.md?p=a-8); and
        - (II) the [transfer](#c-8-D-ix) [includes](/usc/12/25b.md?p=a-3) any qualified financial contract.
      - (ii) **Timing—** The [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) shall notify [any person](/usc/12/1715z–4a.md?p=a-2) who is a party to any contract described in [clause (i)](#c-10-A-i) of such [transfer](#c-8-D-ix) not later than 5:00 p.m. (eastern time) on the [business day](#c-10-D) following the date of the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver.
    - (B) **Certain rights not enforceable—**
      - (i) **Receivership—** A [person](#c-8-D-x) who is a party to a qualified financial contract with a [covered financial company](/usc/12/5381.md?p=a-8) may not exercise any right that such [person](#c-8-D-x) has to terminate, liquidate, or net such contract under [paragraph (8)(A)](#c-8-A) solely by reason of or incidental to the appointment under this section of the [Corporation](/usc/12/5301.md?p=7) as receiver for the [covered financial company](/usc/12/5381.md?p=a-8) (or the insolvency or financial condition of the [covered financial company](/usc/12/5381.md?p=a-8) for which the [Corporation](/usc/12/5301.md?p=7) has been appointed as receiver)—
        - (I) until 5:00 p.m. (eastern time) on the [business day](#c-10-D) following the date of the appointment; or
        - (II) after the [person](#c-8-D-x) has received notice that the contract has been transferred pursuant to [paragraph (9)(A)](#c-9-A).
      - (ii) **Notice—** For purposes of this paragraph, the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) shall be deemed to have notified a [person](#c-8-D-x) who is a party to a qualified financial contract with such [covered financial company](/usc/12/5381.md?p=a-8), if the [Corporation](/usc/12/5301.md?p=7) has taken steps reasonably calculated to provide notice to such [person](#c-8-D-x) by the time specified in [subparagraph (A)](#c-10-A).
    - (C) **Treatment of bridge financial company—** For purposes of [paragraph (9)](#c-9), a [bridge financial company](/usc/12/5381.md?p=a-3) shall not be considered to be a [financial institution](/usc/12/1715k.md?p=h-1-C) for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed, or which is otherwise the subject of a bankruptcy or insolvency proceeding.
    - (D) **Business day defined—** For purposes of this paragraph, the term “business day” means any day other than any Saturday, Sunday, or any day on which either the New York Stock Exchange or the Federal [Reserve Bank](/usc/12/221a.md?p=a) of New York is closed.
  - (11) **Disaffirmance or repudiation of qualified financial contracts—** In exercising the rights of disaffirmance or repudiation of the [Corporation](/usc/12/5301.md?p=7) as receiver with respect to any qualified financial contract to which a [covered financial company](/usc/12/5381.md?p=a-8) is a party, the [Corporation](/usc/12/5301.md?p=7) shall either—
    - (A) disaffirm or repudiate all qualified financial contracts between—
      - (i) [any person](/usc/12/1715z–4a.md?p=a-2) or any [affiliate](/usc/12/24a.md?p=g-1) of such [person](#c-8-D-x); and
      - (ii) the [covered financial company](/usc/12/5381.md?p=a-8) in [default](/usc/12/1467a.md?p=e-7-A); or
    - (B) disaffirm or repudiate none of the qualified financial contracts referred to in [subparagraph (A)](#c-11-A) (with respect to such [person](#c-8-D-x) or any [affiliate](/usc/12/24a.md?p=g-1) of such [person](#c-8-D-x)).
  - (12) **Certain security and customer interests not avoidable—** No provision of this subsection shall be construed as permitting the avoidance of any—
    - (A) legally enforceable or perfected security interest in any of the assets of any [covered financial company](/usc/12/5381.md?p=a-8), except in accordance with [subsection (a)(11)](#a-11); or
    - (B) legally enforceable interest in [customer property](/usc/12/5381.md?p=a-10), security entitlements in respect of assets or property held by the [covered financial company](/usc/12/5381.md?p=a-8) for any security entitlement holder.
  - (13) **Authority to enforce contracts—**
    - (A) **In general—** The [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), may enforce any contract, other than a liability insurance contract of a [director](/usc/12/2279bb.md?p=3) or officer, a [financial institution](/usc/12/1715k.md?p=h-1-C) bond entered into by the [covered financial company](/usc/12/5381.md?p=a-8), notwithstanding any provision of the contract providing for termination, [default](/usc/12/1467a.md?p=e-7-A), acceleration, or exercise of rights upon, or solely by reason of, insolvency, the appointment of or the exercise of rights or powers by the [Corporation](/usc/12/5301.md?p=7) as receiver, the filing of the petition pursuant to [section 5382(a)(1) of this title](/usc/12/5382.md?p=a-1), or the issuance of the recommendations or determination, or any actions or events occurring in connection therewith or as a result thereof, pursuant to [section 5383 of this title](/usc/12/5383.md).
    - (B) **Certain rights not affected—** No provision of this paragraph may be construed as impairing or affecting any right of the [Corporation](/usc/12/5301.md?p=7) as receiver to enforce or recover under a liability insurance contract of a [director](/usc/12/2279bb.md?p=3) or officer or [financial institution](/usc/12/1715k.md?p=h-1-C) bond under other applicable law.
    - (C) **Consent requirement and ipso facto clauses—**
      - (i) **In general—** Except as otherwise provided by this section, no [person](#c-8-D-x) may exercise any right or power to terminate, accelerate, or declare a [default](/usc/12/1467a.md?p=e-7-A) under any contract to which the [covered financial company](/usc/12/5381.md?p=a-8) is a party (and no provision in any such contract providing for such [default](/usc/12/1467a.md?p=e-7-A), termination, or acceleration shall be enforceable), or to obtain possession of or exercise [control](/usc/12/24a.md?p=g-1) over any property of the [covered financial company](/usc/12/5381.md?p=a-8) or affect any contractual rights of the [covered financial company](/usc/12/5381.md?p=a-8), without the consent of the [Corporation](/usc/12/5301.md?p=7) as receiver for the [covered financial company](/usc/12/5381.md?p=a-8) during the 90 day period beginning from the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver.
      - (ii) **Exceptions—** No provision of this subparagraph shall apply to a [director](/usc/12/2279bb.md?p=3) or officer liability insurance contract or a [financial institution](/usc/12/1715k.md?p=h-1-C) bond, to the rights of parties to certain qualified financial contracts pursuant to [paragraph (8)](#c-8), or to the rights of parties to netting contracts pursuant to subtitle A of title IV of the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance [Corporation](/usc/12/5301.md?p=7) Improvement Act of 1991 ([12 U.S.C. 4401](/usc/12/4401.md) et seq.), or shall be construed as permitting the [Corporation](/usc/12/5301.md?p=7) as receiver to fail to comply with otherwise enforceable provisions of such contract.
    - (D) **Contracts to extend credit—** Notwithstanding any other provision in this subchapter, if the [Corporation](/usc/12/5301.md?p=7) as receiver enforces any contract to extend [credit](/usc/12/5481.md?p=7) to the [covered financial company](/usc/12/5381.md?p=a-8) or [bridge financial company](/usc/12/5381.md?p=a-3), any valid and enforceable obligation to repay such debt shall be paid by the [Corporation](/usc/12/5301.md?p=7) as receiver, as an administrative expense of the receivership.
  - (14) **Exception for Federal reserve banks and Corporation security interest—** No provision of this subsection shall apply with respect to—
    - (A) any [extension of credit](/usc/12/1843.md?p=c-14-F-iv) from any Federal [reserve bank](/usc/12/221a.md?p=a) or the [Corporation](/usc/12/5301.md?p=7) to any [covered financial company](/usc/12/5381.md?p=a-8); or
    - (B) any security interest in the assets of the [covered financial company](/usc/12/5381.md?p=a-8) securing any such [extension of credit](/usc/12/1843.md?p=c-14-F-iv).
  - (15) **Savings clause—** The meanings of terms used in this subsection are applicable for purposes of this subsection only, and shall not be construed or applied so as to challenge or affect the characterization, definition, or treatment of any similar terms under any other statute, regulation, or rule, [including](/usc/12/25b.md?p=a-3) the Gramm-Leach-Bliley Act, the Legal Certainty for [Bank](/usc/12/1426a.md?p=g-1) Products Act of 2000 [[7 U.S.C. 27](/usc/7/27.md) to 27f], the securities laws (as that term is defined in section 3(a)(47) of the Securities Exchange Act of 1934 [[15 U.S.C. 78c(a)(47)](/usc/15/78c.md?p=a-47)]), and the Commodity Exchange Act [[7 U.S.C. 1](/usc/7/1.md) et seq.].
  - (16) **Enforcement of contracts guaranteed by the covered financial company—**
    - (A) **In general—** The [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) or as receiver for a [subsidiary](/usc/12/24a.md?p=g-1) of a [covered financial company](/usc/12/5381.md?p=a-8) ([including](/usc/12/25b.md?p=a-3) an [insured depository institution](/usc/12/24a.md?p=g-2)) shall have the power to enforce contracts of [subsidiaries](/usc/12/24a.md?p=g-1) or [affiliates](/usc/12/24a.md?p=g-1) of the [covered financial company](/usc/12/5381.md?p=a-8), the obligations under which are guaranteed or otherwise supported by or linked to the [covered financial company](/usc/12/5381.md?p=a-8), notwithstanding any contractual right to cause the termination, liquidation, or acceleration of such contracts based solely on the insolvency, financial condition, or receivership of the [covered financial company](/usc/12/5381.md?p=a-8), if—
      - (i) such guaranty or other support and all related assets and liabilities are transferred to and assumed by a [bridge financial company](/usc/12/5381.md?p=a-3) or a third party (other than a third party for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed, or which is otherwise the subject of a bankruptcy or insolvency proceeding) within the same period of time as the [Corporation](/usc/12/5301.md?p=7) is entitled to [transfer](#c-8-D-ix) the qualified financial contracts of such [covered financial company](/usc/12/5381.md?p=a-8); or
      - (ii) the [Corporation](/usc/12/5301.md?p=7), as receiver, otherwise provides adequate protection with respect to such obligations.
    - (B) **Rule of construction—** For purposes of this paragraph, a [bridge financial company](/usc/12/5381.md?p=a-3) shall not be considered to be a third party for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed, or which is otherwise the subject of a bankruptcy or insolvency proceeding.
- (d) **Valuation of claims in default—**
  - (1) **In general—** Notwithstanding any other provision of Federal law or the law of any [State](/usc/12/5301.md?p=16), and regardless of the method utilized by the [Corporation](/usc/12/5301.md?p=7) for a [covered financial company](/usc/12/5381.md?p=a-8), [including](/usc/12/25b.md?p=a-3) transactions authorized under [subsection (h)](#h), this subsection shall govern the rights of the creditors of any such [covered financial company](/usc/12/5381.md?p=a-8).
  - (2) **Maximum liability—** The maximum liability of the [Corporation](/usc/12/5301.md?p=7), acting as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) or in any other capacity, to [any person](/usc/12/1715z–4a.md?p=a-2) having a [claim](/usc/12/5381.md?p=a-4) against the [Corporation](/usc/12/5301.md?p=7) as receiver or the [covered financial company](/usc/12/5381.md?p=a-8) for which the [Corporation](/usc/12/5301.md?p=7) is appointed shall equal the amount that such claimant would have received if—
    - (A) the [Corporation](/usc/12/5301.md?p=7) had not been appointed receiver with respect to the [covered financial company](/usc/12/5381.md?p=a-8); and
    - (B) the [covered financial company](/usc/12/5381.md?p=a-8) had been liquidated under [chapter 7](/usc/12/ch7.md) of the [Bankruptcy Code](/usc/12/5381.md?p=a-2), or any similar provision of [State](/usc/12/5301.md?p=16) insolvency law applicable to the [covered financial company](/usc/12/5381.md?p=a-8).
  - (3) **Special provision for orderly liquidation by SIPC—** The maximum liability of the [Corporation](/usc/12/5301.md?p=7), acting as receiver or in its corporate capacity for any [covered broker or dealer](/usc/12/5381.md?p=a-7) to any [customer](/usc/12/5381.md?p=a-10) of such [covered broker or dealer](/usc/12/5381.md?p=a-7), with respect to [customer property](/usc/12/5381.md?p=a-10) of such [customer](/usc/12/5381.md?p=a-10), shall be—
    - (A) equal to the amount that such [customer](/usc/12/5381.md?p=a-10) would have received with respect to such [customer property](/usc/12/5381.md?p=a-10) in a case initiated by [SIPC](/usc/12/5381.md?p=a-16) under the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.); and
    - (B) determined as of the close of business on the date on which the [Corporation](/usc/12/5301.md?p=7) is appointed as receiver.
  - (4) **Additional payments authorized—**
    - (A) **In general—** Subject to [subsection (o)(1)(D)(i)](#o-1-D-i), the [Corporation](/usc/12/5301.md?p=7), with the approval of the [Secretary](/usc/12/5301.md?p=14), may make additional payments or [credit](/usc/12/5481.md?p=7) additional amounts to or with respect to or for the account of any claimant or category of claimants of the [covered financial company](/usc/12/5381.md?p=a-8), if the [Corporation](/usc/12/5301.md?p=7) determines that such payments or [credits](/usc/12/5481.md?p=7) are necessary or appropriate to minimize losses to the [Corporation](/usc/12/5301.md?p=7) as receiver from the orderly liquidation of the [covered financial company](/usc/12/5381.md?p=a-8) under this section.
    - (B) **Limitations—**
      - (i) **Prohibition—** The [Corporation](/usc/12/5301.md?p=7) shall not make any payments or [credit](/usc/12/5481.md?p=7) amounts to any claimant or category of claimants that would result in any claimant receiving more than the face [value](#a-11-H-i-III) amount of any [claim](/usc/12/5381.md?p=a-4) that is proven to the satisfaction of the [Corporation](/usc/12/5301.md?p=7).
      - (ii) **No obligation—** Notwithstanding any other provision of Federal or [State](/usc/12/5301.md?p=16) law, or the Constitution of any [State](/usc/12/5301.md?p=16), the [Corporation](/usc/12/5301.md?p=7) shall not be obligated, as a result of having made any payment under [subparagraph (A)](#d-4-A) or credited any amount described in [subparagraph (A)](#d-4-A) to or with respect to, or for the account, of any claimant or category of claimants, to make payments to any other claimant or category of claimants.
    - (C) **Manner of payment—** The [Corporation](/usc/12/5301.md?p=7) may make payments or [credit](/usc/12/5481.md?p=7) amounts under [subparagraph (A)](#d-4-A) directly to the claimants or may make such payments or [credit](/usc/12/5481.md?p=7) such amounts to a [company](/usc/12/24a.md?p=g-1) other than a [covered financial company](/usc/12/5381.md?p=a-8) or a [bridge financial company](/usc/12/5381.md?p=a-3) established with respect thereto in order to induce such other [company](/usc/12/24a.md?p=g-1) to accept liability for such [claims](/usc/12/5381.md?p=a-4).
- (e) **Limitation on court action—** Except as provided in this subchapter, no [court](/usc/12/5381.md?p=a-6) may take any action to restrain or affect the exercise of powers or functions of the receiver hereunder, and any remedy against the [Corporation](/usc/12/5301.md?p=7) or receiver shall be limited to money damages determined in accordance with this subchapter.
- (f) **Liability of directors and officers—**
  - (1) **In general—** A [director](/usc/12/2279bb.md?p=3) or officer of a [covered financial company](/usc/12/5381.md?p=a-8) may be held personally liable for monetary damages in any civil action described in [paragraph (2)](#f-2) by, on behalf of, or at the request or direction of the [Corporation](/usc/12/5301.md?p=7), which action is prosecuted wholly or partially for the benefit of the [Corporation](/usc/12/5301.md?p=7)—
    - (A) acting as receiver for such [covered financial company](/usc/12/5381.md?p=a-8);
    - (B) acting based upon a suit, [claim](/usc/12/5381.md?p=a-4), or cause of action purchased from, assigned by, or otherwise conveyed by the [Corporation](/usc/12/5301.md?p=7) as receiver; or
    - (C) acting based upon a suit, [claim](/usc/12/5381.md?p=a-4), or cause of action purchased from, assigned by, or otherwise conveyed in whole or in part by a [covered financial company](/usc/12/5381.md?p=a-8) or its [affiliate](/usc/12/24a.md?p=g-1) in connection with assistance provided under this subchapter.
  - (2) **Actions covered—** [Paragraph (1)](#f-1) shall apply with respect to actions for gross negligence, [including](/usc/12/25b.md?p=a-3) any similar conduct or conduct that demonstrates a greater disregard of a duty of care (than gross negligence) [including](/usc/12/25b.md?p=a-3) intentional tortious conduct, as such terms are defined and determined under applicable [State](/usc/12/5301.md?p=16) law.
  - (3) **Savings clause—** Nothing in this subsection shall impair or affect any right of the [Corporation](/usc/12/5301.md?p=7) under other applicable law.
- (g) **Damages—** In any proceeding related to any [claim](/usc/12/5381.md?p=a-4) against a [director](/usc/12/2279bb.md?p=3), officer, employee, agent, attorney, accountant, or appraiser of a [covered financial company](/usc/12/5381.md?p=a-8), or any other party employed by or providing services to a [covered financial company](/usc/12/5381.md?p=a-8), recoverable damages determined to result from the improvident or otherwise improper use or investment of any assets of the [covered financial company](/usc/12/5381.md?p=a-8) shall include principal losses and appropriate interest.
- (h) **Bridge financial companies—**
  - (1) **Organization—**
    - (A) **Purpose—** The [Corporation](/usc/12/5301.md?p=7), as receiver for one or more [covered financial companies](/usc/12/5381.md?p=a-8) or in anticipation of being appointed receiver for one or more [covered financial companies](/usc/12/5381.md?p=a-8), may organize one or more [bridge financial companies](/usc/12/5381.md?p=a-3) in accordance with this subsection.
    - (B) **Authorities—** Upon the creation of a [bridge financial company](/usc/12/5381.md?p=a-3) under [subparagraph (A)](#h-1-A) with respect to a [covered financial company](/usc/12/5381.md?p=a-8), such [bridge financial company](/usc/12/5381.md?p=a-3) may—
      - (i) assume such liabilities ([including](/usc/12/25b.md?p=a-3) liabilities associated with any trust or custody business, but excluding any liabilities that count as regulatory [capital](/usc/12/51c.md)) of such [covered financial company](/usc/12/5381.md?p=a-8) as the [Corporation](/usc/12/5301.md?p=7) may, in its discretion, determine to be appropriate;
      - (ii) purchase such assets ([including](/usc/12/25b.md?p=a-3) assets associated with any trust or custody business) of such [covered financial company](/usc/12/5381.md?p=a-8) as the [Corporation](/usc/12/5301.md?p=7) may, in its discretion, determine to be appropriate; and
      - (iii) perform any other temporary function which the [Corporation](/usc/12/5301.md?p=7) may, in its discretion, prescribe in accordance with this section.
  - (2) **Charter and establishment—**
    - (A) **Establishment—** Except as provided in [subparagraph (H)](#h-2-H), where the [covered financial company](/usc/12/5381.md?p=a-8) is a [covered broker or dealer](/usc/12/5381.md?p=a-7), the [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), may grant a Federal charter to and approve articles of [association](/usc/12/1828.md?p=s-4-E-i) for one or more [bridge financial company](/usc/12/5381.md?p=a-3) or [companies](/usc/12/24a.md?p=g-1), with respect to such [covered financial company](/usc/12/5381.md?p=a-8) which shall, by operation of law and immediately upon issuance of its charter and approval of its articles of [association](/usc/12/1828.md?p=s-4-E-i), be established and operate in accordance with, and subject to, such charter, articles, and this section.
    - (B) **Management—** Upon its establishment, a [bridge financial company](/usc/12/5381.md?p=a-3) shall be under the management of a [board](/usc/12/221a.md?p=a) of [directors](/usc/12/2279bb.md?p=3) appointed by the [Corporation](/usc/12/5301.md?p=7).
    - (C) **Articles of association—** The articles of [association](/usc/12/1828.md?p=s-4-E-i) and organization certificate of a [bridge financial company](/usc/12/5381.md?p=a-3) shall have such terms as the [Corporation](/usc/12/5301.md?p=7) may provide, and shall be executed by such representatives as the [Corporation](/usc/12/5301.md?p=7) may designate.
    - (D) **Terms of charter; rights and privileges—** Subject to and in accordance with the provisions of this subsection, the [Corporation](/usc/12/5301.md?p=7) shall—
      - (i) establish the terms of the charter of a [bridge financial company](/usc/12/5381.md?p=a-3) and the rights, powers, authorities, and privileges of a [bridge financial company](/usc/12/5381.md?p=a-3) granted by the charter or as an incident thereto; and
      - (ii) provide for, and establish the terms and conditions governing, the management ([including](/usc/12/25b.md?p=a-3) the bylaws and the number of [directors](/usc/12/2279bb.md?p=3) of the [board](/usc/12/221a.md?p=a) of [directors](/usc/12/2279bb.md?p=3)) and operations of the [bridge financial company](/usc/12/5381.md?p=a-3).
    - (E) **Transfer of rights and privileges of covered financial company—**
      - (i) **In general—** Notwithstanding any other provision of Federal or [State](/usc/12/5301.md?p=16) law, the [Corporation](/usc/12/5301.md?p=7) may provide for a [bridge financial company](/usc/12/5381.md?p=a-3) to succeed to and assume any rights, powers, authorities, or privileges of the [covered financial company](/usc/12/5381.md?p=a-8) with respect to which the [bridge financial company](/usc/12/5381.md?p=a-3) was established and, upon such determination by the [Corporation](/usc/12/5301.md?p=7), the [bridge financial company](/usc/12/5381.md?p=a-3) shall immediately and by operation of law succeed to and assume such rights, powers, authorities, and privileges.
      - (ii) **Effective without approval—** Any succession to or assumption by a [bridge financial company](/usc/12/5381.md?p=a-3) of rights, powers, authorities, or privileges of a [covered financial company](/usc/12/5381.md?p=a-8) under [clause (i)](#h-2-E-i) or otherwise shall be effective without any further approval under Federal or [State](/usc/12/5301.md?p=16) law, assignment, or consent with respect thereto.
    - (F) **Corporate governance and election and designation of body of law—** To the extent permitted by the [Corporation](/usc/12/5301.md?p=7) and consistent with this section and any rules, regulations, or directives issued by the [Corporation](/usc/12/5301.md?p=7) under this section, a [bridge financial company](/usc/12/5381.md?p=a-3) may elect to follow the corporate governance practices and procedures that are applicable to a [corporation](/usc/12/5301.md?p=7) incorporated under the general [corporation](/usc/12/5301.md?p=7) law of the [State](/usc/12/5301.md?p=16) of Delaware, or the [State](/usc/12/5301.md?p=16) of incorporation or organization of the [covered financial company](/usc/12/5381.md?p=a-8) with respect to which the [bridge financial company](/usc/12/5381.md?p=a-3) was established, as such law may be amended from time to time.
    - (G) **Capital—**
      - (i) **Capital not required—** Notwithstanding any other provision of Federal or [State](/usc/12/5301.md?p=16) law, a [bridge financial company](/usc/12/5381.md?p=a-3) may, if permitted by the [Corporation](/usc/12/5301.md?p=7), operate without any [capital](/usc/12/51c.md) or surplus, or with such [capital](/usc/12/51c.md) or surplus as the [Corporation](/usc/12/5301.md?p=7) may in its discretion determine to be appropriate.
      - (ii) **No contribution by the Corporation required—** The [Corporation](/usc/12/5301.md?p=7) is not required to pay [capital](/usc/12/51c.md) into a [bridge financial company](/usc/12/5381.md?p=a-3) or to issue any [capital stock](/usc/12/51c.md) on behalf of a [bridge financial company](/usc/12/5381.md?p=a-3) established under this subsection.
      - (iii) **Authority—** If the [Corporation](/usc/12/5301.md?p=7) determines that such action is advisable, the [Corporation](/usc/12/5301.md?p=7) may cause [capital stock](/usc/12/51c.md) or other securities of a [bridge financial company](/usc/12/5381.md?p=a-3) established with respect to a [covered financial company](/usc/12/5381.md?p=a-8) to be issued and offered for sale in such amounts and on such terms and conditions as the [Corporation](/usc/12/5301.md?p=7) may, in its discretion, determine.
      - (iv) **Operating funds in lieu of capital and implementation plan—** Upon the organization of a [bridge financial company](/usc/12/5381.md?p=a-3), and thereafter as the [Corporation](/usc/12/5301.md?p=7) may, in its discretion, determine to be necessary or advisable, the [Corporation](/usc/12/5301.md?p=7) may make available to the [bridge financial company](/usc/12/5381.md?p=a-3), subject to the plan described in [subsection (n)(9)](#n-9), [funds](/usc/12/4702.md?p=10) for the operation of the [bridge financial company](/usc/12/5381.md?p=a-3) in lieu of [capital](/usc/12/51c.md).
    - (H) **Bridge brokers or dealers—**
      - (i) **In general—** The [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered broker or dealer](/usc/12/5381.md?p=a-7), may approve articles of [association](/usc/12/1828.md?p=s-4-E-i) for one or more [bridge financial companies](/usc/12/5381.md?p=a-3) with respect to such [covered broker or dealer](/usc/12/5381.md?p=a-7), which [bridge financial company](/usc/12/5381.md?p=a-3) or [companies](/usc/12/24a.md?p=g-1) shall, by operation of law and immediately upon approval of its articles of [association](/usc/12/1828.md?p=s-4-E-i)—
        - (I) be established and deemed registered with the [Commission](/usc/12/5301.md?p=5) under the Securities Exchange Act of 1934 [[15 U.S.C. 78a](/usc/15/78a.md) et seq.] and a [member](/usc/12/1426a.md?p=g-1) of [SIPC](/usc/12/5381.md?p=a-16);
        - (II) operate in accordance with such articles and this section; and
        - (III) succeed to any and all registrations and memberships of the [covered financial company](/usc/12/5381.md?p=a-8) with or in any self-regulatory organizations.
      - (ii) **Other requirements—** Except as provided in [clause (i)](#h-2-H-i), and notwithstanding any other provision of this section, the [bridge financial company](/usc/12/5381.md?p=a-3) shall be subject to the Federal securities laws and all requirements with respect to being a [member](/usc/12/1426a.md?p=g-1) of a self-regulatory organization, unless exempted from any such requirements by the [Commission](/usc/12/5301.md?p=5), as is necessary or appropriate in the public interest or for the protection of investors.
      - (iii) **Treatment of customers—** Except as otherwise provided by this subchapter, any [customer](/usc/12/5381.md?p=a-10) of the [covered broker or dealer](/usc/12/5381.md?p=a-7) whose account is transferred to a [bridge financial company](/usc/12/5381.md?p=a-3) shall have all the rights, privileges, and protections under [section 5385(f) of this title](/usc/12/5385.md?p=f) and under the Securities Investor Protection Act of 1970 ([15 U.S.C. 78aaa](/usc/15/78aaa.md) et seq.), that such [customer](/usc/12/5381.md?p=a-10) would have had if the account were not transferred from the [covered financial company](/usc/12/5381.md?p=a-8) under this subparagraph.
      - (iv) **Operation of bridge brokers or dealers—** Notwithstanding any other provision of this subchapter, the [Corporation](/usc/12/5301.md?p=7) shall not operate any [bridge financial company](/usc/12/5381.md?p=a-3) created by the [Corporation](/usc/12/5301.md?p=7) under this subchapter with respect to a [covered broker or dealer](/usc/12/5381.md?p=a-7) in such a manner as to adversely affect the ability of [customers](/usc/12/5381.md?p=a-10) to promptly access their [customer property](/usc/12/5381.md?p=a-10) in accordance with applicable law.
  - (3) **Interests in and assets and obligations of covered financial company—** Notwithstanding paragraph [(1)](#h-1) or [(2)](#h-2) or any other provision of law—
    - (A) a [bridge financial company](/usc/12/5381.md?p=a-3) shall assume, [acquire](/usc/12/1467a.md?p=a-1-J), or succeed to the assets or liabilities of a [covered financial company](/usc/12/5381.md?p=a-8) ([including](/usc/12/25b.md?p=a-3) the assets or liabilities associated with any trust or custody business) only to the extent that such assets or liabilities are transferred by the [Corporation](/usc/12/5301.md?p=7) to the [bridge financial company](/usc/12/5381.md?p=a-3) in accordance with, and subject to the restrictions set forth in, [paragraph (1)(B)](#h-1-B); and
    - (B) a [bridge financial company](/usc/12/5381.md?p=a-3) shall not assume, [acquire](/usc/12/1467a.md?p=a-1-J), or succeed to any obligation that a [covered financial company](/usc/12/5381.md?p=a-8) for which the [Corporation](/usc/12/5301.md?p=7) has been appointed receiver may have to any shareholder, [member](/usc/12/1426a.md?p=g-1), general partner, limited partner, or other [person](/usc/12/5481.md?p=19) with an interest in the equity of the [covered financial company](/usc/12/5381.md?p=a-8) that arises as a result of the status of that [person](/usc/12/5481.md?p=19) having an equity [claim](/usc/12/5381.md?p=a-4) in the [covered financial company](/usc/12/5381.md?p=a-8).
  - (4) **Bridge financial company treated as being in default for certain purposes—** A [bridge financial company](/usc/12/5381.md?p=a-3) shall be treated as a [covered financial company](/usc/12/5381.md?p=a-8) in [default](/usc/12/1467a.md?p=e-7-A) at such times and for such purposes as the [Corporation](/usc/12/5301.md?p=7) may, in its discretion, determine.
  - (5) **Transfer of assets and liabilities—**
    - (A) **Authority of Corporation—** The [Corporation](/usc/12/5301.md?p=7), as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), may transfer any assets and liabilities of a [covered financial company](/usc/12/5381.md?p=a-8) ([including](/usc/12/25b.md?p=a-3) any assets or liabilities associated with any trust or custody business) to one or more [bridge financial companies](/usc/12/5381.md?p=a-3), in accordance with and subject to the restrictions of [paragraph (1)](#h-1).
    - (B) **Subsequent transfers—** At any time after the establishment of a [bridge financial company](/usc/12/5381.md?p=a-3) with respect to a [covered financial company](/usc/12/5381.md?p=a-8), the [Corporation](/usc/12/5301.md?p=7), as receiver, may transfer any assets and liabilities of such [covered financial company](/usc/12/5381.md?p=a-8) as the [Corporation](/usc/12/5301.md?p=7) may, in its discretion, determine to be appropriate in accordance with and subject to the restrictions of [paragraph (1)](#h-1).
    - (C) **Treatment of trust or custody business—** For purposes of this paragraph, the trust or custody business, [including](/usc/12/25b.md?p=a-3) fiduciary appointments, held by any [covered financial company](/usc/12/5381.md?p=a-8) is included among its assets and liabilities.
    - (D) **Effective without approval—** The transfer of any assets or liabilities, [including](/usc/12/25b.md?p=a-3) those associated with any trust or custody business of a [covered financial company](/usc/12/5381.md?p=a-8), to a [bridge financial company](/usc/12/5381.md?p=a-3) shall be effective without any further approval under Federal or [State](/usc/12/5301.md?p=16) law, assignment, or consent with respect thereto.
    - (E) **Equitable treatment of similarly situated creditors—** The [Corporation](/usc/12/5301.md?p=7) shall treat all creditors of a [covered financial company](/usc/12/5381.md?p=a-8) that are similarly situated under [subsection (b)(1)](#b-1), in a similar manner in exercising the authority of the [Corporation](/usc/12/5301.md?p=7) under this subsection to transfer any assets or liabilities of the [covered financial company](/usc/12/5381.md?p=a-8) to one or more [bridge financial companies](/usc/12/5381.md?p=a-3) established with respect to such [covered financial company](/usc/12/5381.md?p=a-8), except that the [Corporation](/usc/12/5301.md?p=7) may take any action ([including](/usc/12/25b.md?p=a-3) making payments, subject to [subsection (o)(1)(D)(i)](#o-1-D-i)) that does not comply with this subparagraph, if—
      - (i) the [Corporation](/usc/12/5301.md?p=7) determines that such action is necessary—
        - (I) to maximize the [value](#a-11-H-i-III) of the assets of the [covered financial company](/usc/12/5381.md?p=a-8);
        - (II) to maximize the present [value](#a-11-H-i-III) return from the sale or other disposition of the assets of the [covered financial company](/usc/12/5381.md?p=a-8); or
        - (III) to minimize the amount of any loss realized upon the sale or other disposition of the assets of the [covered financial company](/usc/12/5381.md?p=a-8); and
      - (ii) all creditors that are similarly situated under [subsection (b)(1)](#b-1) receive not less than the amount provided under paragraphs [(2)](#d-2) and [(3)](#d-3) of subsection (d).
    - (F) **Limitation on transfer of liabilities—** Notwithstanding any other provision of law, the aggregate amount of liabilities of a [covered financial company](/usc/12/5381.md?p=a-8) that are transferred to, or assumed by, a [bridge financial company](/usc/12/5381.md?p=a-3) from a [covered financial company](/usc/12/5381.md?p=a-8) may not exceed the aggregate amount of the assets of the [covered financial company](/usc/12/5381.md?p=a-8) that are transferred to, or purchased by, the [bridge financial company](/usc/12/5381.md?p=a-3) from the [covered financial company](/usc/12/5381.md?p=a-8).
  - (6) **Stay of judicial action—** Any judicial action to which a [bridge financial company](/usc/12/5381.md?p=a-3) becomes a party by virtue of its acquisition of any assets or assumption of any liabilities of a [covered financial company](/usc/12/5381.md?p=a-8) shall be stayed from further proceedings for a period of not longer than 45 days (or such longer period as may be agreed to upon the consent of all parties) at the request of the [bridge financial company](/usc/12/5381.md?p=a-3).
  - (7) **Agreements against interest of the bridge financial company—** No agreement that tends to diminish or defeat the interest of the [bridge financial company](/usc/12/5381.md?p=a-3) in any asset of a [covered financial company](/usc/12/5381.md?p=a-8) acquired by the [bridge financial company](/usc/12/5381.md?p=a-3) shall be valid against the [bridge financial company](/usc/12/5381.md?p=a-3), unless such agreement—
    - (A) is in writing;
    - (B) was executed by an authorized officer or representative of the [covered financial company](/usc/12/5381.md?p=a-8) or confirmed in the ordinary course of business by the [covered financial company](/usc/12/5381.md?p=a-8); and
    - (C) has been on the official record of the [company](/usc/12/24a.md?p=g-1), since the time of its execution, or with which, the party claiming under the agreement provides documentation of such agreement and its authorized execution or confirmation by the [covered financial company](/usc/12/5381.md?p=a-8) that is acceptable to the receiver.
  - (8) **No Federal status—**
    - (A) **Agency status—** A [bridge financial company](/usc/12/5381.md?p=a-3) is not an [agency](/usc/12/1422.md?p=12), establishment, or instrumentality of the United States.
    - (B) **Employee status—** Representatives for purposes of [paragraph (1)(B)](#h-1-B), [directors](/usc/12/2279bb.md?p=3), officers, employees, or agents of a [bridge financial company](/usc/12/5381.md?p=a-3) are not, solely by virtue of service in any such capacity, officers or employees of the United States. Any employee of the [Corporation](/usc/12/5301.md?p=7) or of any Federal instrumentality who serves at the request of the [Corporation](/usc/12/5301.md?p=7) as a representative for purposes of [paragraph (1)(B)](#h-1-B), [director](/usc/12/2279bb.md?p=3), officer, employee, or agent of a [bridge financial company](/usc/12/5381.md?p=a-3) shall not—
      - (i) solely by virtue of service in any such capacity lose any existing status as an officer or employee of the United States for purposes of [title 5](/usc/5.md) or any other provision of law; or
      - (ii) receive any salary or benefits for service in any such capacity with respect to a [bridge financial company](/usc/12/5381.md?p=a-3) in addition to such salary or benefits as are obtained through employment with the [Corporation](/usc/12/5301.md?p=7) or such Federal instrumentality.
  - (9) **Funding authorized—** The [Corporation](/usc/12/5301.md?p=7) may, subject to the plan described in [subsection (n)(9)](#n-9), provide funding to facilitate any transaction described in subparagraph [(A)](#h-13-A), [(B)](#h-13-B), [(C)](#h-13-C), or [(D)](#h-13-D) of paragraph (13) with respect to any [bridge financial company](/usc/12/5381.md?p=a-3), or facilitate the acquisition by a [bridge financial company](/usc/12/5381.md?p=a-3) of any assets, or the assumption of any liabilities, of a [covered financial company](/usc/12/5381.md?p=a-8) for which the [Corporation](/usc/12/5301.md?p=7) has been appointed receiver.
  - (10) **Exempt tax status—** Notwithstanding any other provision of Federal or [State](/usc/12/5301.md?p=16) law, a [bridge financial company](/usc/12/5381.md?p=a-3), its franchise, property, and income shall be exempt from all taxation now or hereafter imposed by the United States, by any territory, dependency, or possession thereof, or by any [State](/usc/12/5301.md?p=16), county, municipality, or local taxing authority.
  - (11) **Federal agency approval; antitrust review—** If a transaction involving the merger or sale of a [bridge financial company](/usc/12/5381.md?p=a-3) requires approval by a [Federal agency](/usc/12/3101.md?p=5), the transaction may not be consummated before the 5th calendar day after the date of approval by the [Federal agency](/usc/12/3101.md?p=5) responsible for such approval with respect thereto. If, in connection with any such approval a report on competitive factors from the Attorney General is required, the [Federal agency](/usc/12/3101.md?p=5) responsible for such approval shall promptly notify the Attorney General of the proposed transaction and the Attorney General shall provide the required report within 10 days of the request. If a notification is required under [section 18a of title 15](/usc/15/18a.md) with respect to such transaction, the required waiting period shall end on the 15th day after the date on which the Attorney General and the Federal Trade [Commission](/usc/12/5301.md?p=5) receive such notification, unless the waiting period is terminated earlier under [section 18a(b)(2) of title 15](/usc/15/18a.md?p=b-2), or extended under [section 18a(e)(2) of title 15](/usc/15/18a.md?p=e-2).
  - (12) **Duration of bridge financial company—** Subject to paragraphs [(13)](#h-13) and [(14)](#h-14), the status of a [bridge financial company](/usc/12/5381.md?p=a-3) as such shall terminate at the end of the 2-year period following the date on which it was granted a charter. The [Corporation](/usc/12/5301.md?p=7) may, in its discretion, extend the status of the [bridge financial company](/usc/12/5381.md?p=a-3) as such for no more than 3 additional 1-year periods.
  - (13) **Termination of bridge financial company status—** The status of any [bridge financial company](/usc/12/5381.md?p=a-3) as such shall terminate upon the earliest of—
    - (A) the date of the merger or consolidation of the [bridge financial company](/usc/12/5381.md?p=a-3) with a [company](/usc/12/24a.md?p=g-1) that is not a [bridge financial company](/usc/12/5381.md?p=a-3);
    - (B) at the election of the [Corporation](/usc/12/5301.md?p=7), the sale of a majority of the [capital stock](/usc/12/51c.md) of the [bridge financial company](/usc/12/5381.md?p=a-3) to a [company](/usc/12/24a.md?p=g-1) other than the [Corporation](/usc/12/5301.md?p=7) and other than another [bridge financial company](/usc/12/5381.md?p=a-3);
    - (C) the sale of 80 percent, or more, of the [capital stock](/usc/12/51c.md) of the [bridge financial company](/usc/12/5381.md?p=a-3) to a [person](/usc/12/5481.md?p=19) other than the [Corporation](/usc/12/5301.md?p=7) and other than another [bridge financial company](/usc/12/5381.md?p=a-3);
    - (D) at the election of the [Corporation](/usc/12/5301.md?p=7), either the assumption of all or substantially all of the liabilities of the [bridge financial company](/usc/12/5381.md?p=a-3) by a [company](/usc/12/24a.md?p=g-1) that is not a [bridge financial company](/usc/12/5381.md?p=a-3), or the acquisition of all or substantially all of the assets of the [bridge financial company](/usc/12/5381.md?p=a-3) by a [company](/usc/12/24a.md?p=g-1) that is not a [bridge financial company](/usc/12/5381.md?p=a-3), or other entity as permitted under applicable law; and
    - (E) the expiration of the period provided in [paragraph (12)](#h-12), or the earlier dissolution of the [bridge financial company](/usc/12/5381.md?p=a-3), as provided in [paragraph (15)](#h-15).
  - (14) **Effect of termination events—**
    - (A) **Merger or consolidation—** A merger or consolidation, described in [paragraph (13)(A)](#h-13-A) shall be conducted in accordance with, and shall have the effect provided in, the provisions of applicable law. For the purpose of effecting such a merger or consolidation, the [bridge financial company](/usc/12/5381.md?p=a-3) shall be treated as a [corporation](/usc/12/5301.md?p=7) organized under the laws of the [State](/usc/12/5301.md?p=16) of Delaware (unless the law of another [State](/usc/12/5301.md?p=16) has been selected by the [bridge financial company](/usc/12/5381.md?p=a-3) in accordance with [paragraph (2)(F)](#h-2-F)), and the [Corporation](/usc/12/5301.md?p=7) shall be treated as the sole shareholder thereof, notwithstanding any other provision of [State](/usc/12/5301.md?p=16) or Federal law.
    - (B) **Charter conversion—** Following the sale of a majority of the [capital stock](/usc/12/51c.md) of the [bridge financial company](/usc/12/5381.md?p=a-3), as provided in [paragraph (13)(B)](#h-13-B), the [Corporation](/usc/12/5301.md?p=7) may amend the charter of the [bridge financial company](/usc/12/5381.md?p=a-3) to reflect the termination of the status of the [bridge financial company](/usc/12/5381.md?p=a-3) as such, whereupon the [company](/usc/12/24a.md?p=g-1) shall have all of the rights, powers, and privileges under its constituent documents and applicable Federal or [State](/usc/12/5301.md?p=16) law. In connection therewith, the [Corporation](/usc/12/5301.md?p=7) may take such steps as may be necessary or convenient to reincorporate the [bridge financial company](/usc/12/5381.md?p=a-3) under the laws of a [State](/usc/12/5301.md?p=16) and, notwithstanding any provisions of Federal or [State](/usc/12/5301.md?p=16) law, such [State](/usc/12/5301.md?p=16)-chartered [corporation](/usc/12/5301.md?p=7) shall be deemed to succeed by operation of law to such rights, titles, powers, and interests of the [bridge financial company](/usc/12/5381.md?p=a-3) as the [Corporation](/usc/12/5301.md?p=7) may provide, with the same effect as if the [bridge financial company](/usc/12/5381.md?p=a-3) had merged with the [State](/usc/12/5301.md?p=16)-chartered [corporation](/usc/12/5301.md?p=7) under provisions of the corporate laws of such [State](/usc/12/5301.md?p=16).
    - (C) **Sale of stock—** Following the sale of 80 percent or more of the [capital stock](/usc/12/51c.md) of a [bridge financial company](/usc/12/5381.md?p=a-3), as provided in [paragraph (13)(C)](#h-13-C), the [company](/usc/12/24a.md?p=g-1) shall have all of the rights, powers, and privileges under its constituent documents and applicable Federal or [State](/usc/12/5301.md?p=16) law. In connection therewith, the [Corporation](/usc/12/5301.md?p=7) may take such steps as may be necessary or convenient to reincorporate the [bridge financial company](/usc/12/5381.md?p=a-3) under the laws of a [State](/usc/12/5301.md?p=16) and, notwithstanding any provisions of Federal or [State](/usc/12/5301.md?p=16) law, the [State](/usc/12/5301.md?p=16)-chartered [corporation](/usc/12/5301.md?p=7) shall be deemed to succeed by operation of law to such rights, titles, powers and interests of the [bridge financial company](/usc/12/5381.md?p=a-3) as the [Corporation](/usc/12/5301.md?p=7) may provide, with the same effect as if the [bridge financial company](/usc/12/5381.md?p=a-3) had merged with the [State](/usc/12/5301.md?p=16)-chartered [corporation](/usc/12/5301.md?p=7) under provisions of the corporate laws of such [State](/usc/12/5301.md?p=16).
    - (D) **Assumption of liabilities and sale of assets—** Following the assumption of all or substantially all of the liabilities of the [bridge financial company](/usc/12/5381.md?p=a-3), or the sale of all or substantially all of the assets of the [bridge financial company](/usc/12/5381.md?p=a-3), as provided in [paragraph (13)(D)](#h-13-D), at the election of the [Corporation](/usc/12/5301.md?p=7), the [bridge financial company](/usc/12/5381.md?p=a-3) may retain its status as such for the period provided in [paragraph (12)](#h-12) or may be dissolved at the election of the [Corporation](/usc/12/5301.md?p=7).
    - (E) **Amendments to charter—** Following the consummation of a transaction described in subparagraph [(A)](#h-13-A), [(B)](#h-13-B), [(C)](#h-13-C), or [(D)](#h-13-D) of paragraph (13), the charter of the resulting [company](/usc/12/24a.md?p=g-1) shall be amended to reflect the termination of [bridge financial company](/usc/12/5381.md?p=a-3) status, if appropriate.
  - (15) **Dissolution of bridge financial company—**
    - (A) **In general—** Notwithstanding any other provision of Federal or [State](/usc/12/5301.md?p=16) law, if the status of a [bridge financial company](/usc/12/5381.md?p=a-3) as such has not previously been terminated by the occurrence of an event specified in subparagraph [(A)](#h-13-A), [(B)](#h-13-B), [(C)](#h-13-C), or [(D)](#h-13-D) of paragraph (13)—
      - (i) the [Corporation](/usc/12/5301.md?p=7) may, in its discretion, dissolve the [bridge financial company](/usc/12/5381.md?p=a-3) in accordance with this paragraph at any time; and
      - (ii) the [Corporation](/usc/12/5301.md?p=7) shall promptly commence dissolution proceedings in accordance with this paragraph upon the expiration of the 2-year period following the date on which the [bridge financial company](/usc/12/5381.md?p=a-3) was chartered, or any extension thereof, as provided in [paragraph (12)](#h-12).
    - (B) **Procedures—** The [Corporation](/usc/12/5301.md?p=7) shall remain the receiver for a [bridge financial company](/usc/12/5381.md?p=a-3) for the purpose of dissolving the [bridge financial company](/usc/12/5381.md?p=a-3). The [Corporation](/usc/12/5301.md?p=7) as receiver for a [bridge financial company](/usc/12/5381.md?p=a-3) shall wind up the affairs of the [bridge financial company](/usc/12/5381.md?p=a-3) in conformity with the provisions of law relating to the liquidation of [covered financial companies](/usc/12/5381.md?p=a-8) under this subchapter. With respect to any such [bridge financial company](/usc/12/5381.md?p=a-3), the [Corporation](/usc/12/5301.md?p=7) as receiver shall have all the rights, powers, and privileges and shall perform the duties related to the exercise of such rights, powers, or privileges granted by law to the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) under this subchapter and, notwithstanding any other provision of law, in the exercise of such rights, powers, and privileges, the [Corporation](/usc/12/5301.md?p=7) shall not be subject to the direction or supervision of any [State](/usc/12/5301.md?p=16) [agency](/usc/12/1422.md?p=12) or other [Federal agency](/usc/12/3101.md?p=5).
  - (16) **Authority to obtain credit—**
    - (A) **In general—** A [bridge financial company](/usc/12/5381.md?p=a-3) may obtain unsecured [credit](/usc/12/5481.md?p=7) and issue unsecured debt.
    - (B) **Inability to obtain credit—** If a [bridge financial company](/usc/12/5381.md?p=a-3) is unable to obtain unsecured [credit](/usc/12/5481.md?p=7) or issue unsecured debt, the [Corporation](/usc/12/5301.md?p=7) may authorize the obtaining of [credit](/usc/12/5481.md?p=7) or the issuance of debt by the [bridge financial company](/usc/12/5381.md?p=a-3)—
      - (i) with priority over any or all of the obligations of the [bridge financial company](/usc/12/5381.md?p=a-3);
      - (ii) secured by a lien on property of the [bridge financial company](/usc/12/5381.md?p=a-3) that is not otherwise subject to a lien; or
      - (iii) secured by a junior lien on property of the [bridge financial company](/usc/12/5381.md?p=a-3) that is subject to a lien.
    - (C) **Limitations—**
      - (i) **In general—** The [Corporation](/usc/12/5301.md?p=7), after notice and a hearing, may authorize the obtaining of [credit](/usc/12/5481.md?p=7) or the issuance of debt by a [bridge financial company](/usc/12/5381.md?p=a-3) that is secured by a senior or equal lien on property of the [bridge financial company](/usc/12/5381.md?p=a-3) that is subject to a lien, only if—
        - (I) the [bridge financial company](/usc/12/5381.md?p=a-3) is unable to otherwise obtain such [credit](/usc/12/5481.md?p=7) or issue such debt; and
        - (II) there is adequate protection of the interest of the holder of the lien on the property with respect to which such senior or equal lien is proposed to be granted.
      - (ii) **Hearing—** The hearing required pursuant to this subparagraph shall be before a [court](/usc/12/5381.md?p=a-6) of the United States, which shall have jurisdiction to conduct such hearing and to authorize a [bridge financial company](/usc/12/5381.md?p=a-3) to obtain secured [credit](/usc/12/5481.md?p=7) under [clause (i)](#h-16-C-i).
    - (D) **Burden of proof—** In any hearing under this paragraph, the [Corporation](/usc/12/5301.md?p=7) has the burden of proof on the issue of adequate protection.
    - (E) **Qualified financial contracts—** No [credit](/usc/12/5481.md?p=7) or debt obtained or issued by a [bridge financial company](/usc/12/5381.md?p=a-3) may contain terms that impair the rights of a counterparty to a qualified financial contract upon a [default](/usc/12/1467a.md?p=e-7-A) by the [bridge financial company](/usc/12/5381.md?p=a-3), other than the priority of such counterparty’s unsecured [claim](/usc/12/5381.md?p=a-4) (after the exercise of rights) relative to the priority of the [bridge financial company](/usc/12/5381.md?p=a-3)’s obligations in respect of such [credit](/usc/12/5481.md?p=7) or debt, unless such counterparty consents in writing to any such impairment.
  - (17) **Effect on debts and liens—** The reversal or modification on appeal of an authorization under this subsection to obtain [credit](/usc/12/5481.md?p=7) or issue debt, or of a grant under this section of a priority or a lien, does not affect the validity of any debt so issued, or any priority or lien so granted, to an entity that extended such [credit](/usc/12/5481.md?p=7) in good faith, whether or not such entity knew of the pendency of the appeal, unless such authorization and the issuance of such debt, or the granting of such priority or lien, were stayed pending appeal.
- (i) **Sharing records—** If the [Corporation](/usc/12/5301.md?p=7) has been appointed as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), other Federal regulators shall make all records relating to the [covered financial company](/usc/12/5381.md?p=a-8) available to the [Corporation](/usc/12/5301.md?p=7), which may be used by the [Corporation](/usc/12/5301.md?p=7) in any manner that the [Corporation](/usc/12/5301.md?p=7) determines to be appropriate.
- (j) **Expedited procedures for certain claims—**
  - (1) **Time for filing notice of appeal—** The notice of appeal of any order, whether interlocutory or final, entered in any case brought by the [Corporation](/usc/12/5301.md?p=7) against a [director](/usc/12/2279bb.md?p=3), officer, employee, agent, attorney, accountant, or appraiser of the [covered financial company](/usc/12/5381.md?p=a-8), or any other [person](/usc/12/5481.md?p=19) employed by or providing services to a [covered financial company](/usc/12/5381.md?p=a-8), shall be filed not later than 30 days after the date of entry of the order. The hearing of the appeal shall be held not later than 120 days after the date of the notice of appeal. The appeal shall be decided not later than 180 days after the date of the notice of appeal.
  - (2) **Scheduling—** The [court](/usc/12/5381.md?p=a-6) shall expedite the consideration of any case brought by the [Corporation](/usc/12/5301.md?p=7) against a [director](/usc/12/2279bb.md?p=3), officer, employee, agent, attorney, accountant, or appraiser of a [covered financial company](/usc/12/5381.md?p=a-8) or any other [person](/usc/12/5481.md?p=19) employed by or providing services to a [covered financial company](/usc/12/5381.md?p=a-8). As far as practicable, the [court](/usc/12/5381.md?p=a-6) shall give such case priority on its docket.
  - (3) **Judicial discretion—** The [court](/usc/12/5381.md?p=a-6) may modify the schedule and limitations stated in paragraphs [(1)](#j-1) and [(2)](#j-2) in a particular case, based on a specific finding that the ends of justice that would be served by making such a modification would outweigh the best interest of the public in having the case resolved expeditiously.
- (k) **Foreign investigations—** The [Corporation](/usc/12/5301.md?p=7), as receiver for any [covered financial company](/usc/12/5381.md?p=a-8), and for purposes of carrying out any power, authority, or duty with respect to a [covered financial company](/usc/12/5381.md?p=a-8)—
  - (1) may request the assistance of any foreign financial authority and provide assistance to any foreign financial authority in accordance with [section 1818(v) of this title](/usc/12/1818.md?p=v), as if the [covered financial company](/usc/12/5381.md?p=a-8) were an [insured depository institution](/usc/12/24a.md?p=g-2), the [Corporation](/usc/12/5301.md?p=7) were the [appropriate Federal banking agency](/usc/12/24a.md?p=g-2) for the [company](/usc/12/24a.md?p=g-1), and any foreign financial authority were the foreign banking authority; and
  - (2) may maintain an [office](/usc/12/2279bb.md?p=4) to coordinate foreign investigations or investigations on behalf of foreign financial authorities.
- (l) **Prohibition on entering secrecy agreements and protective orders—** The [Corporation](/usc/12/5301.md?p=7) may not enter into any agreement or approve any protective order which prohibits the [Corporation](/usc/12/5301.md?p=7) from disclosing the terms of any settlement of an administrative or other action for damages or restitution brought by the [Corporation](/usc/12/5301.md?p=7) in its capacity as receiver for a [covered financial company](/usc/12/5381.md?p=a-8).
- (m) **Liquidation of certain covered financial companies or bridge financial companies—**
  - (1) **In general—** Except as specifically provided in this section, and notwithstanding any other provision of law, the [Corporation](/usc/12/5301.md?p=7), in connection with the liquidation of any [covered financial company](/usc/12/5381.md?p=a-8) or [bridge financial company](/usc/12/5381.md?p=a-3) with respect to which the [Corporation](/usc/12/5301.md?p=7) has been appointed as receiver, shall—
    - (A) in the case of any [covered financial company](/usc/12/5381.md?p=a-8) or [bridge financial company](/usc/12/5381.md?p=a-3) that is a [stockbroker](#m-2-B), but is not a [member](/usc/12/1426a.md?p=g-1) of the Securities Investor Protection [Corporation](/usc/12/5301.md?p=7), apply the provisions of subchapter III of [chapter 7](/usc/12/ch7.md) of the [Bankruptcy Code](/usc/12/5381.md?p=a-2), in respect of the distribution to any [customer](#m-2-A) of all [customer name security](#m-2-A) and [customer property and member property](#m-2-A), as if such [covered financial company](/usc/12/5381.md?p=a-8) or [bridge financial company](/usc/12/5381.md?p=a-3) were a debtor for purposes of such subchapter; or
    - (B) in the case of any [covered financial company](/usc/12/5381.md?p=a-8) or [bridge financial company](/usc/12/5381.md?p=a-3) that is a [commodity broker](#m-2-B), apply the provisions of subchapter IV of [chapter 7](/usc/12/ch7.md)[^3] the [Bankruptcy Code](/usc/12/5381.md?p=a-2), in respect of the distribution to any [customer](#m-2-A) of all [customer property and member property](#m-2-A), as if such [covered financial company](/usc/12/5381.md?p=a-8) or [bridge financial company](/usc/12/5381.md?p=a-3) were a debtor for purposes of such subchapter.
  - (2) **Definitions—** For purposes of this subsection—
    - (A) the terms “customer”, “customer name security”, and “customer property and member property” have the same meanings as in sections [741](/usc/11/741.md) and [761](/usc/11/761.md) of title 11; and
    - (B) the terms “commodity broker” and “stockbroker” have the same meanings as in section 101 of the [Bankruptcy Code](/usc/12/5381.md?p=a-2).
- (n) **Orderly Liquidation Fund—**
  - (1) **Establishment—** There is established in the Treasury of the United States a separate [fund](/usc/12/4702.md?p=10) to be known as the “Orderly Liquidation [Fund](/usc/12/4702.md?p=10)”, which shall be available to the [Corporation](/usc/12/5301.md?p=7) to carry out the authorities contained in this subchapter, for the cost of actions authorized by this subchapter, [including](/usc/12/25b.md?p=a-3) the orderly liquidation of [covered financial companies](/usc/12/5381.md?p=a-8), payment of administrative expenses, the payment of principal and interest by the [Corporation](/usc/12/5301.md?p=7) on obligations issued under [paragraph (5)](#n-5), and the exercise of the authorities of the [Corporation](/usc/12/5301.md?p=7) under this subchapter.
  - (2) **Proceeds—** Amounts received by the [Corporation](/usc/12/5301.md?p=7), [including](/usc/12/25b.md?p=a-3) assessments received under [subsection (o)](#o), proceeds of obligations issued under [paragraph (5)](#n-5), interest and other earnings from investments, and repayments to the [Corporation](/usc/12/5301.md?p=7) by [covered financial companies](/usc/12/5381.md?p=a-8), shall be deposited into the [Fund](/usc/12/4702.md?p=10).
  - (3) **Management—** The [Corporation](/usc/12/5301.md?p=7) shall manage the [Fund](/usc/12/4702.md?p=10) in accordance with this subsection and the policies and procedures established under [section 5383(d) of this title](/usc/12/5383.md?p=d).
  - (4) **Investments—** At the request of the [Corporation](/usc/12/5301.md?p=7), the [Secretary](/usc/12/5301.md?p=14) may invest such portion of amounts held in the [Fund](/usc/12/4702.md?p=10) that are not, in the judgment of the [Corporation](/usc/12/5301.md?p=7), required to meet the current needs of the [Corporation](/usc/12/5301.md?p=7), in obligations of the United States having suitable maturities, as determined by the [Corporation](/usc/12/5301.md?p=7). The interest on and the proceeds from the sale or redemption of such obligations shall be credited to the [Fund](/usc/12/4702.md?p=10).
  - (5) **Authority to issue obligations—**
    - (A) **Corporation authorized to issue obligations—** Upon appointment by the [Secretary](/usc/12/5301.md?p=14) of the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8), the [Corporation](/usc/12/5301.md?p=7) is authorized to issue obligations to the [Secretary](/usc/12/5301.md?p=14).
    - (B) **Secretary authorized to purchase obligations—** The [Secretary](/usc/12/5301.md?p=14) may, under such terms and conditions as the [Secretary](/usc/12/5301.md?p=14) may require, purchase or agree to purchase any obligations issued under [subparagraph (A)](#n-5-A), and for such purpose, the [Secretary](/usc/12/5301.md?p=14) is authorized to use as a public debt transaction the proceeds of the sale of any securities issued under [chapter 31](/usc/31/chstIII-ch31.md) of title 31, and the purposes for which securities may be issued under [chapter 31](/usc/31/chstIII-ch31.md) of title 31 are extended to include such purchases.
    - (C) **Interest rate—** Each purchase of obligations by the [Secretary](/usc/12/5301.md?p=14) under this paragraph shall be upon such terms and conditions as to yield a return at a rate determined by the [Secretary](/usc/12/5301.md?p=14), taking into consideration the current average yield on outstanding marketable obligations of the United States of comparable maturity, plus an interest rate surcharge to be determined by the [Secretary](/usc/12/5301.md?p=14), which shall be greater than the difference between—
      - (i) the current average rate on an index of corporate obligations of comparable maturity; and
      - (ii) the current average rate on outstanding marketable obligations of the United States of comparable maturity.
    - (D) **Secretary authorized to sell obligations—** The [Secretary](/usc/12/5301.md?p=14) may sell, upon such terms and conditions as the [Secretary](/usc/12/5301.md?p=14) shall determine, any of the obligations acquired under this paragraph.
    - (E) **Public debt transactions—** All purchases and sales by the [Secretary](/usc/12/5301.md?p=14) of such obligations under this paragraph shall be treated as public debt transactions of the United States, and the proceeds from the sale of any obligations acquired by the [Secretary](/usc/12/5301.md?p=14) under this paragraph shall be deposited into the Treasury of the United States as miscellaneous receipts.
  - (6) **Maximum obligation limitation—** The [Corporation](/usc/12/5301.md?p=7) may not, in connection with the orderly liquidation of a [covered financial company](/usc/12/5381.md?p=a-8), issue or incur any obligation, if, after issuing or incurring the obligation, the aggregate amount of such obligations outstanding under this subsection for each [covered financial company](/usc/12/5381.md?p=a-8) would exceed—
    - (A) an amount that is equal to 10 percent of the total consolidated assets of the [covered financial company](/usc/12/5381.md?p=a-8), based on the most recent financial statement available, during the 30-day period immediately following the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver (or a shorter time period if the [Corporation](/usc/12/5301.md?p=7) has calculated the amount described under [subparagraph (B)](#n-6-B)); and
    - (B) the amount that is equal to 90 percent of the fair [value](#a-11-H-i-III) of the total consolidated assets of each [covered financial company](/usc/12/5381.md?p=a-8) that are available for repayment, after the time period described in [subparagraph (A)](#n-6-A).
  - (7) **Rulemaking—** The [Corporation](/usc/12/5301.md?p=7) and the [Secretary](/usc/12/5301.md?p=14) shall jointly, in consultation with the [Council](/usc/12/5301.md?p=8), prescribe regulations governing the calculation of the maximum obligation limitation defined in this paragraph.
  - (8) **Rule of construction—**
    - (A) **In general—** Nothing in this section shall be construed to affect the authority of the [Corporation](/usc/12/5301.md?p=7) under subsection (a) or (b) of [section 1824 of this title](/usc/12/1824.md) or [section 1825(c)(5) of this title](/usc/12/1825.md?p=c-5), the management of the [Deposit Insurance Fund](/usc/12/1813.md?p=y-1) by the [Corporation](/usc/12/5301.md?p=7), or the resolution of [insured depository institutions](/usc/12/24a.md?p=g-2), provided that—
      - (i) the authorities of the [Corporation](/usc/12/5301.md?p=7) contained in this subchapter shall not be used to assist the [Deposit Insurance Fund](/usc/12/1813.md?p=y-1) or to assist any [financial company](/usc/12/5381.md?p=a-11) under applicable law other than this Act;
      - (ii) the authorities of the [Corporation](/usc/12/5301.md?p=7) relating to the [Deposit Insurance Fund](/usc/12/1813.md?p=y-1), or any other responsibilities of the [Corporation](/usc/12/5301.md?p=7) under applicable law other than this subchapter, shall not be used to assist a [covered financial company](/usc/12/5381.md?p=a-8) pursuant to this subchapter; and
      - (iii) the [Deposit Insurance Fund](/usc/12/1813.md?p=y-1) may not be used in any manner to otherwise circumvent the purposes of this subchapter.
    - (B) **Valuation—** For purposes of determining the amount of obligations under this subsection—
      - (i) the [Corporation](/usc/12/5301.md?p=7) shall include as an obligation any contingent liability of the [Corporation](/usc/12/5301.md?p=7) pursuant to this subchapter; and
      - (ii) the [Corporation](/usc/12/5301.md?p=7) shall [value](#a-11-H-i-III) any contingent liability at its expected cost to the [Corporation](/usc/12/5301.md?p=7).
  - (9) **Orderly liquidation and repayment plans—**
    - (A) **Orderly liquidation plan—** Amounts in the [Fund](/usc/12/4702.md?p=10) shall be available to the [Corporation](/usc/12/5301.md?p=7) with regard to a [covered financial company](/usc/12/5381.md?p=a-8) for which the [Corporation](/usc/12/5301.md?p=7) is appointed receiver after the [Corporation](/usc/12/5301.md?p=7) has developed an orderly liquidation plan that is acceptable to the [Secretary](/usc/12/5301.md?p=14) with regard to such [covered financial company](/usc/12/5381.md?p=a-8), [including](/usc/12/25b.md?p=a-3) the provision and use of [funds](/usc/12/4702.md?p=10), [including](/usc/12/25b.md?p=a-3) taking any actions specified under [section 5384(d) of this title](/usc/12/5384.md?p=d) and subsection [(h)(2)(G)(iv)](#h-2-G-iv) and [(h)(9)](#h-9) of this section, and payments to third parties. The orderly liquidation plan shall take into account actions to avoid or mitigate potential adverse effects on low income, minority, or underserved communities affected by the failure of the [covered financial company](/usc/12/5381.md?p=a-8), and shall provide for coordination with the [primary financial regulatory agencies](/usc/12/5301.md?p=12), as appropriate, to ensure that such actions are taken. The [Corporation](/usc/12/5301.md?p=7) may, at any time, amend any orderly liquidation plan approved by the [Secretary](/usc/12/5301.md?p=14) with the concurrence of the [Secretary](/usc/12/5301.md?p=14).
    - (B) **Mandatory repayment plan—**
      - (i) **In general—** No amount authorized under [paragraph (6)(B)](#n-6-B) may be provided by the [Secretary](/usc/12/5301.md?p=14) to the [Corporation](/usc/12/5301.md?p=7) under [paragraph (5)](#n-5), unless an agreement is in effect between the [Secretary](/usc/12/5301.md?p=14) and the [Corporation](/usc/12/5301.md?p=7) that—
        - (I) provides a specific plan and schedule to achieve the repayment of the outstanding amount of any borrowing under [paragraph (5)](#n-5); and
        - (II) demonstrates that income to the [Corporation](/usc/12/5301.md?p=7) from the liquidated assets of the [covered financial company](/usc/12/5381.md?p=a-8) and assessments under [subsection (o)](#o) will be sufficient to amortize the outstanding balance within the period established in the repayment schedule and pay the interest accruing on such balance within the time provided in [subsection (o)(1)(B)](#o-1-B).
      - (ii) **Consultation with and report to Congress—** The [Secretary](/usc/12/5301.md?p=14) and the [Corporation](/usc/12/5301.md?p=7) shall—
        - (I) consult with the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the terms of any repayment schedule agreement; and
        - (II) submit a copy of the repayment schedule agreement to the Committees described in [subclause (I)](#n-9-B-ii-I) before the end of the 30-day period beginning on the date on which any amount is provided by the [Secretary](/usc/12/5301.md?p=14) to the [Corporation](/usc/12/5301.md?p=7) under [paragraph (5)](#n-5).
  - (10) **Implementation expenses—**
    - (A) **In general—** Reasonable [implementation expenses](#n-10-C) of the [Corporation](/usc/12/5301.md?p=7) incurred after July 21, 2010, shall be treated as expenses of the [Council](/usc/12/5301.md?p=8).
    - (B) **Requests for reimbursement—** The [Corporation](/usc/12/5301.md?p=7) shall periodically submit a request for reimbursement for [implementation expenses](#n-10-C) to the Chairperson of the [Council](/usc/12/5301.md?p=8), who shall arrange for prompt reimbursement to the [Corporation](/usc/12/5301.md?p=7) of reasonable [implementation expenses](#n-10-C).
    - (C) **Definition—** As used in this paragraph, the term “implementation expenses”—
      - (i) means costs incurred by the [Corporation](/usc/12/5301.md?p=7) beginning on July 21, 2010, as part of its efforts to implement this subchapter that do not relate to a particular [covered financial company](/usc/12/5381.md?p=a-8); and
      - (ii) [includes](/usc/12/25b.md?p=a-3) the costs incurred in connection with the development of policies, procedures, rules, and regulations and other planning activities of the [Corporation](/usc/12/5301.md?p=7) consistent with carrying out this subchapter.
- (o) **Assessments—**
  - (1) **Risk-based assessments—**
    - (A) **Eligible financial companies defined—** For purposes of this subsection, the term “eligible financial company” means any [bank holding company](/usc/12/1813.md?p=w-2) with total consolidated assets equal to or greater than $50,000,000,000 and any [nonbank financial company supervised by the Board of Governors](/usc/12/5311.md?p=a-4-D).
    - (B) **Assessments—** The [Corporation](/usc/12/5301.md?p=7) shall charge one or more risk-based assessments in accordance with the provisions of [subparagraph (D)](#o-1-D), if such assessments are necessary to pay in full the obligations issued by the [Corporation](/usc/12/5301.md?p=7) to the [Secretary](/usc/12/5301.md?p=14) under this subchapter within 60 months of the date of issuance of such obligations.
    - (C) **Extensions authorized—** The [Corporation](/usc/12/5301.md?p=7) may, with the approval of the [Secretary](/usc/12/5301.md?p=14), extend the time period under [subparagraph (B)](#o-1-B), if the [Corporation](/usc/12/5301.md?p=7) determines that an extension is necessary to avoid a serious adverse effect on the financial system of the United States.
    - (D) **Application of assessments—** To meet the requirements of [subparagraph (B)](#o-1-B), the [Corporation](/usc/12/5301.md?p=7) shall—
      - (i) impose assessments, as soon as practicable, on any claimant that received additional payments or amounts from the [Corporation](/usc/12/5301.md?p=7) pursuant to subsection [(b)(4)](#b-4), [(d)(4)](#d-4), or [(h)(5)(E)](#h-5-E), except for payments or amounts necessary to initiate and continue operations essential to implementation of the receivership or any [bridge financial company](/usc/12/5381.md?p=a-3), to recover on a cumulative basis, the entire difference between—
        - (I) the aggregate [value](#a-11-H-i-III) the claimant received from the [Corporation](/usc/12/5301.md?p=7) on a [claim](/usc/12/5381.md?p=a-4) pursuant to this subchapter ([including](/usc/12/25b.md?p=a-3) pursuant to subsection[^4] (b)(4), (d)(4), and (h)(5)(E)), as of the date on which such [value](#a-11-H-i-III) was received; and
        - (II) the [value](#a-11-H-i-III) the claimant was entitled to receive from the [Corporation](/usc/12/5301.md?p=7) on such [claim](/usc/12/5381.md?p=a-4) solely from the proceeds of the liquidation of the [covered financial company](/usc/12/5381.md?p=a-8) under this subchapter; and
      - (ii) if the amounts to be recovered on a cumulative basis under [clause (i)](#o-1-D-i) are insufficient to meet the requirements of [subparagraph (B)](#o-1-B), after taking into account the considerations set forth in [paragraph (4)](#o-4), impose assessments on—
        - (I) [eligible financial companies](#o-1-A); and
        - (II) [financial companies](/usc/12/5381.md?p=a-11) with total consolidated assets equal to or greater than $50,000,000,000 that are not [eligible financial companies](#o-1-A).
    - (E) **Provision of financing—** Payments or amounts necessary to initiate and continue operations essential to implementation of the receivership or any [bridge financial company](/usc/12/5381.md?p=a-3) described in [subparagraph (D)(i)](#o-1-D-i) shall not include the provision of financing, as defined by rule of the [Corporation](/usc/12/5301.md?p=7), to third parties.
  - (2) **Graduated assessment rate—** The [Corporation](/usc/12/5301.md?p=7) shall impose assessments on a graduated basis, with [financial companies](/usc/12/5381.md?p=a-11) having greater assets and risk being assessed at a higher rate.
  - (3) **Notification and payment—** The [Corporation](/usc/12/5301.md?p=7) shall notify each [financial company](/usc/12/5381.md?p=a-11) of that [company](/usc/12/24a.md?p=g-1)’s assessment under this subsection. Any [financial company](/usc/12/5381.md?p=a-11) subject to assessment under this subsection shall pay such assessment in accordance with the regulations prescribed pursuant to [paragraph (6)](#o-6).
  - (4) **Risk-based assessment considerations—** In imposing assessments under [paragraph (1)(D)(ii)](#o-1-D-ii), the [Corporation](/usc/12/5301.md?p=7) shall use a risk matrix. The [Council](/usc/12/5301.md?p=8) shall make a recommendation to the [Corporation](/usc/12/5301.md?p=7) on the risk matrix to be used in imposing such assessments, and the [Corporation](/usc/12/5301.md?p=7) shall take into account any such recommendation in the establishment of the risk matrix to be used to impose such assessments. In recommending or establishing such risk matrix, the [Council](/usc/12/5301.md?p=8) and the [Corporation](/usc/12/5301.md?p=7), respectively, shall take into account—
    - (A) economic conditions generally affecting [financial companies](/usc/12/5381.md?p=a-11) so as to allow assessments to increase during more favorable economic conditions and to decrease during less favorable economic conditions;
    - (B) any assessments imposed on a [financial company](/usc/12/5381.md?p=a-11) or an [affiliate](/usc/12/24a.md?p=g-1) of a [financial company](/usc/12/5381.md?p=a-11) that—
      - (i) is an [insured depository institution](/usc/12/24a.md?p=g-2), assessed pursuant to section [1817](/usc/12/1817.md) or [1823(c)(4)(G)](/usc/12/1823.md?p=c-4-G) of this title;
      - (ii) is a [member](/usc/12/1426a.md?p=g-1) of the Securities Investor Protection [Corporation](/usc/12/5301.md?p=7), assessed pursuant to section 4 of the Securities Investor Protection Act of 1970 ([15 U.S.C. 78ddd](/usc/15/78ddd.md));
      - (iii) is an [insured credit union](/usc/12/1829c.md?p=a-6), assessed pursuant to [section 1782(c)(1)(A)(i) of this title](/usc/12/1782.md?p=c-1-A-i); or
      - (iv) is an [insurance company](/usc/12/5381.md?p=a-13), assessed pursuant to applicable [State](/usc/12/5301.md?p=16) law to cover (or reimburse payments made to cover) the costs of the rehabilitation, liquidation, or other [State](/usc/12/5301.md?p=16) insolvency proceeding with respect to 1 or more [insurance companies](/usc/12/5381.md?p=a-13);
    - (C) the risks presented by the [financial company](/usc/12/5381.md?p=a-11) to the financial system and the extent to which the [financial company](/usc/12/5381.md?p=a-11) has benefitted, or likely would benefit, from the orderly liquidation of a [financial company](/usc/12/5381.md?p=a-11) under this subchapter, [including](/usc/12/25b.md?p=a-3)—
      - (i) the amount, different categories, and concentrations of assets of the [financial company](/usc/12/5381.md?p=a-11) and its [affiliates](/usc/12/24a.md?p=g-1), [including](/usc/12/25b.md?p=a-3) both on-balance sheet and off-balance sheet assets;
      - (ii) the activities of the [financial company](/usc/12/5381.md?p=a-11) and its [affiliates](/usc/12/24a.md?p=g-1);
      - (iii) the relevant market share of the [financial company](/usc/12/5381.md?p=a-11) and its [affiliates](/usc/12/24a.md?p=g-1);
      - (iv) the extent to which the [financial company](/usc/12/5381.md?p=a-11) is leveraged;
      - (v) the potential exposure to sudden calls on liquidity precipitated by economic distress;
      - (vi) the amount, maturity, volatility, and stability of the [company](/usc/12/24a.md?p=g-1)’s financial obligations to, and relationship with, other [financial companies](/usc/12/5381.md?p=a-11);
      - (vii) the amount, maturity, volatility, and stability of the liabilities of the [company](/usc/12/24a.md?p=g-1), [including](/usc/12/25b.md?p=a-3) the degree of reliance on short-term funding, taking into consideration existing systems for measuring a [company](/usc/12/24a.md?p=g-1)’s risk-based [capital](/usc/12/51c.md);
      - (viii) the stability and variety of the [company](/usc/12/24a.md?p=g-1)’s sources of funding;
      - (ix) the [company](/usc/12/24a.md?p=g-1)’s importance as a source of [credit](/usc/12/5481.md?p=7) for households, businesses, and [State](/usc/12/5301.md?p=16) and local governments and as a source of liquidity for the financial system;
      - (x) the extent to which assets are simply managed and not owned by the [financial company](/usc/12/5381.md?p=a-11) and the extent to which ownership of assets under management is diffuse; and
      - (xi) the amount, different categories, and concentrations of liabilities, both insured and uninsured, contingent and noncontingent, [including](/usc/12/25b.md?p=a-3) both on-balance sheet and off-balance sheet liabilities, of the [financial company](/usc/12/5381.md?p=a-11) and its [affiliates](/usc/12/24a.md?p=g-1);
    - (D) any risks presented by the [financial company](/usc/12/5381.md?p=a-11) during the 10-year period immediately prior to the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver for the [covered financial company](/usc/12/5381.md?p=a-8) that contributed to the failure of the [covered financial company](/usc/12/5381.md?p=a-8); and
    - (E) such other risk-related factors as the [Corporation](/usc/12/5301.md?p=7), or the [Council](/usc/12/5301.md?p=8), as applicable, may determine to be appropriate.
  - (5) **Collection of information—** The [Corporation](/usc/12/5301.md?p=7) may impose on [covered financial companies](/usc/12/5381.md?p=a-8) such collection of information requirements as the [Corporation](/usc/12/5301.md?p=7) deems necessary to carry out this subsection after the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver under this subchapter.
  - (6) **Rulemaking—**
    - (A) **In general—** The [Corporation](/usc/12/5301.md?p=7) shall prescribe regulations to carry out this subsection. The [Corporation](/usc/12/5301.md?p=7) shall consult with the [Secretary](/usc/12/5301.md?p=14) in the development and finalization of such regulations.
    - (B) **Equitable treatment—** The regulations prescribed under [subparagraph (A)](#o-6-A) shall take into account the differences in risks posed to the financial stability of the United States by [financial companies](/usc/12/5381.md?p=a-11), the differences in the liability structures of [financial companies](/usc/12/5381.md?p=a-11), and the different bases for other assessments that such [financial companies](/usc/12/5381.md?p=a-11) may be required to pay, to ensure that assessed [financial companies](/usc/12/5381.md?p=a-11) are treated equitably and that assessments under this subsection reflect such differences.
- (p) **Unenforceability of certain agreements—**
  - (1) **In general—** No provision described in [paragraph (2)](#p-2) shall be enforceable against or impose any liability on [any person](/usc/12/1715z–4a.md?p=a-2), as such enforcement or liability shall be contrary to public policy.
  - (2) **Prohibited provisions—** A provision described in this paragraph is any term contained in any existing or future standstill, confidentiality, or other agreement that, directly or indirectly—
    - (A) affects, restricts, or limits the ability of [any person](/usc/12/1715z–4a.md?p=a-2) to offer to [acquire](/usc/12/1467a.md?p=a-1-J) or [acquire](/usc/12/1467a.md?p=a-1-J);
    - (B) prohibits [any person](/usc/12/1715z–4a.md?p=a-2) from offering to [acquire](/usc/12/1467a.md?p=a-1-J) or acquiring; or
    - (C) prohibits [any person](/usc/12/1715z–4a.md?p=a-2) from using any previously disclosed information in connection with any such offer to [acquire](/usc/12/1467a.md?p=a-1-J) or acquisition of,

    all or part of any [covered financial company](/usc/12/5381.md?p=a-8), [including](/usc/12/25b.md?p=a-3) any liabilities, assets, or interest therein, in connection with any transaction in which the [Corporation](/usc/12/5301.md?p=7) exercises its authority under this subchapter.

- (q) **Other exemptions—**
  - (1) **In general—** When acting as a receiver under this subchapter—
    - (A) the [Corporation](/usc/12/5301.md?p=7), [including](/usc/12/25b.md?p=a-3) its franchise, its [capital](/usc/12/51c.md), reserves and surplus, and its income, shall be exempt from all taxation imposed by any [State](/usc/12/5301.md?p=16), county, municipality, or local taxing authority, except that any real property of the [Corporation](/usc/12/5301.md?p=7) shall be subject to [State](/usc/12/5301.md?p=16), territorial, county, municipal, or local taxation to the same extent according to its [value](#a-11-H-i-III) as other real property is taxed, except that, notwithstanding the failure of [any person](/usc/12/1715z–4a.md?p=a-2) to challenge an assessment under [State](/usc/12/5301.md?p=16) law of the [value](#a-11-H-i-III) of such property, such [value](#a-11-H-i-III), and the tax thereon, shall be determined as of the period for which such tax is imposed;
    - (B) no property of the [Corporation](/usc/12/5301.md?p=7) shall be subject to levy, attachment, garnishment, foreclosure, or sale without the consent of the [Corporation](/usc/12/5301.md?p=7), nor shall any involuntary lien attach to the property of the [Corporation](/usc/12/5301.md?p=7); and
    - (C) the [Corporation](/usc/12/5301.md?p=7) shall not be liable for any amounts in the nature of penalties or fines, [including](/usc/12/25b.md?p=a-3) those arising from the failure of [any person](/usc/12/1715z–4a.md?p=a-2) to pay any real property, personal property, probate, or recording tax or any recording or filing fees when due; and
    - (D) the [Corporation](/usc/12/5301.md?p=7) shall be exempt from all prosecution by the United States or any [State](/usc/12/5301.md?p=16), county, municipality, or local authority for any criminal offense arising under Federal, [State](/usc/12/5301.md?p=16), county, municipal, or local law, which was allegedly committed by the [covered financial company](/usc/12/5381.md?p=a-8), or [persons](/usc/12/5481.md?p=19) acting on behalf of the [covered financial company](/usc/12/5381.md?p=a-8), prior to the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver.
  - (2) **Limitation—** [Paragraph (1)](#q-1) shall not apply with respect to any tax imposed (or other amount arising) under the Internal Revenue Code of 1986 [[26 U.S.C. 1](/usc/26/1.md) et seq.].
- (r) **Certain sales of assets prohibited—**
  - (1) **Persons who engaged in improper conduct with, or caused losses to, covered financial companies—** The [Corporation](/usc/12/5301.md?p=7) shall prescribe regulations which, at a minimum, shall prohibit the sale of assets of a [covered financial company](/usc/12/5381.md?p=a-8) by the [Corporation](/usc/12/5301.md?p=7) to—
    - (A) [any person](/usc/12/1715z–4a.md?p=a-2) who—
      - (i) has defaulted, or was a [member](/usc/12/1426a.md?p=g-1) of a partnership or an officer or [director](/usc/12/2279bb.md?p=3) of a [corporation](/usc/12/5301.md?p=7) that has defaulted, on 1 or more obligations, the aggregate amount of which exceeds $1,000,000, to such [covered financial company](/usc/12/5381.md?p=a-8);
      - (ii) has been found to have engaged in fraudulent activity in connection with any obligation referred to in [clause (i)](#r-1-A-i); and
      - (iii) proposes to purchase any such asset in whole or in part through the use of the proceeds of a loan or advance of [credit](/usc/12/5481.md?p=7) from the [Corporation](/usc/12/5301.md?p=7) or from any [covered financial company](/usc/12/5381.md?p=a-8);
    - (B) [any person](/usc/12/1715z–4a.md?p=a-2) who participated, as an officer or [director](/usc/12/2279bb.md?p=3) of such [covered financial company](/usc/12/5381.md?p=a-8) or of any [affiliate](/usc/12/24a.md?p=g-1) of such [company](/usc/12/24a.md?p=g-1), in a material way in any transaction that resulted in a substantial loss to such [covered financial company](/usc/12/5381.md?p=a-8); or
    - (C) [any person](/usc/12/1715z–4a.md?p=a-2) who has demonstrated a pattern or practice of defalcation regarding obligations to such [covered financial company](/usc/12/5381.md?p=a-8).
  - (2) **Convicted debtors—** Except as provided in [paragraph (3)](#r-3), a [person](/usc/12/5481.md?p=19) may not purchase any asset of such institution from the receiver, if that [person](/usc/12/5481.md?p=19)—
    - (A) has been convicted of an offense under section [215](/usc/18/215.md), [656](/usc/18/656.md), [657](/usc/18/657.md), [1005](/usc/18/1005.md), [1006](/usc/18/1006.md), [1007](/usc/18/1007.md), [1008](/usc/18/1008.md), [1014](/usc/18/1014.md), [1032](/usc/18/1032.md), [1341](/usc/18/1341.md), [1343](/usc/18/1343.md), or [1344](/usc/18/1344.md) of title 18, or of conspiring to commit such an offense, affecting any [covered financial company](/usc/12/5381.md?p=a-8); and
    - (B) is in [default](#r-4) on any loan or other [extension of credit](/usc/12/1843.md?p=c-14-F-iv) from such [covered financial company](/usc/12/5381.md?p=a-8) which, if not paid, will cause substantial loss to the [Fund](/usc/12/4702.md?p=10) or the [Corporation](/usc/12/5301.md?p=7).
  - (3) **Settlement of claims—** Paragraphs [(1)](#r-1) and [(2)](#r-2) shall not apply to the sale or transfer by the [Corporation](/usc/12/5301.md?p=7) of any asset of any [covered financial company](/usc/12/5381.md?p=a-8) to [any person](/usc/12/1715z–4a.md?p=a-2), if the sale or transfer of the asset resolves or settles, or is part of the resolution or settlement, of 1 or more [claims](/usc/12/5381.md?p=a-4) that have been, or could have been, asserted by the [Corporation](/usc/12/5301.md?p=7) against the [person](/usc/12/5481.md?p=19).
  - (4) **Definition of default—** For purposes of this subsection, the term “default” means a failure to comply with the terms of a loan or other obligation to such an extent that the property securing the obligation is foreclosed upon.
- (s) **Recoupment of compensation from senior executives and directors—**
  - (1) **In general—** The [Corporation](/usc/12/5301.md?p=7), as receiver of a [covered financial company](/usc/12/5381.md?p=a-8), may recover from any current or former senior executive or [director](/usc/12/2279bb.md?p=3) substantially responsible for the failed condition of the [covered financial company](/usc/12/5381.md?p=a-8) any [compensation](#s-3) received during the 2-year period preceding the date on which the [Corporation](/usc/12/5301.md?p=7) was appointed as the receiver of the [covered financial company](/usc/12/5381.md?p=a-8), except that, in the case of fraud, no time limit shall apply.
  - (2) **Cost considerations—** In seeking to recover any such [compensation](#s-3), the [Corporation](/usc/12/5301.md?p=7) shall weigh the financial and deterrent benefits of such recovery against the cost of executing the recovery.
  - (3) **Rulemaking—** The [Corporation](/usc/12/5301.md?p=7) shall promulgate regulations to implement the requirements of this subsection, [including](/usc/12/25b.md?p=a-3) defining the term “compensation” to mean any financial remuneration, [including](/usc/12/25b.md?p=a-3) salary, bonuses, incentives, benefits, severance, deferred compensation, or golden parachute benefits, and any profits realized from the sale of the securities of the [covered financial company](/usc/12/5381.md?p=a-8).

# §5391. Inspector General reviews

- (a) **to (c) Omitted—**
- (d) **FDIC Inspector General reviews—**
  - (1) **Scope—** The Inspector General of the [Corporation](/usc/12/5301.md?p=7) shall conduct, supervise, and coordinate audits and investigations of the liquidation of any [covered financial company](/usc/12/5381.md?p=a-8) by the [Corporation](/usc/12/5301.md?p=7) as receiver under this subchapter, [including](/usc/12/25b.md?p=a-3) collecting and summarizing—
    - (A) a description of actions taken by the [Corporation](/usc/12/5301.md?p=7) as receiver;
    - (B) a description of any material sales, transfers, mergers, obligations, purchases, and other material transactions entered into by the [Corporation](/usc/12/5301.md?p=7);
    - (C) an evaluation of the adequacy of the policies and procedures of the [Corporation](/usc/12/5301.md?p=7) under [section 5383(d) of this title](/usc/12/5383.md?p=d) and orderly liquidation plan under [section 5390(n)(14)](/usc/12/5390.md)[^1] of this title;
    - (D) an evaluation of the utilization by the [Corporation](/usc/12/5301.md?p=7) of the private sector in carrying out its functions, [including](/usc/12/25b.md?p=a-3) the adequacy of any conflict-of-interest reviews; and
    - (E) an evaluation of the overall performance of the [Corporation](/usc/12/5301.md?p=7) in liquidating the [covered financial company](/usc/12/5381.md?p=a-8), [including](/usc/12/25b.md?p=a-3) administrative costs, timeliness of liquidation process, and impact on the financial system.
  - (2) **Frequency—** Not later than 6 months after the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver under this subchapter and every 6 months thereafter, the Inspector General of the [Corporation](/usc/12/5301.md?p=7) shall conduct the audit and investigation described in [paragraph (1)](#d-1).
  - (3) **Reports and testimony—** The Inspector General of the [Corporation](/usc/12/5301.md?p=7) shall include in the semiannual reports required by [section 405(b) of title 5](/usc/5/405.md?p=b), a summary of the findings and evaluations under [paragraph (1)](#d-1), and shall appear before the appropriate committees of Congress, if requested, to present each such report.
  - (4) **Funding—**
    - (A) **Initial funding—** The expenses of the Inspector General of the [Corporation](/usc/12/5301.md?p=7) in carrying out this subsection shall be considered administrative expenses of the receivership.
    - (B) **Additional funding—** If the maximum amount available to the [Corporation](/usc/12/5301.md?p=7) as receiver under this subchapter is insufficient to enable the Inspector General of the [Corporation](/usc/12/5301.md?p=7) to carry out the duties under this subsection, the [Corporation](/usc/12/5301.md?p=7) shall pay such additional amounts from assessments imposed under [section 5390 of this title](/usc/12/5390.md).
  - (5) **Termination of responsibilities—** The duties and responsibilities of the Inspector General of the [Corporation](/usc/12/5301.md?p=7) under this subsection shall terminate 1 year after the date of termination of the receivership under this subchapter.
- (e) **Treasury Inspector General reviews—**
  - (1) **Scope—** The Inspector General of the Department of the Treasury shall conduct, supervise, and coordinate audits and investigations of actions taken by the [Secretary](/usc/12/5301.md?p=14) related to the liquidation of any [covered financial company](/usc/12/5381.md?p=a-8) under this subchapter, [including](/usc/12/25b.md?p=a-3) collecting and summarizing—
    - (A) a description of actions taken by the [Secretary](/usc/12/5301.md?p=14) under this subchapter;
    - (B) an analysis of the approval by the [Secretary](/usc/12/5301.md?p=14) of the policies and procedures of the [Corporation](/usc/12/5301.md?p=7) under [section 5383 of this title](/usc/12/5383.md) and acceptance of the orderly liquidation plan of the [Corporation](/usc/12/5301.md?p=7) under [section 5390 of this title](/usc/12/5390.md); and
    - (C) an assessment of the terms and conditions underlying the purchase by the [Secretary](/usc/12/5301.md?p=14) of obligations of the [Corporation](/usc/12/5301.md?p=7) under [section 5390 of this title](/usc/12/5390.md).
  - (2) **Frequency—** Not later than 6 months after the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver under this subchapter and every 6 months thereafter, the Inspector General of the Department of the Treasury shall conduct the audit and investigation described in [paragraph (1)](#e-1).
  - (3) **Reports and testimony—** The Inspector General of the Department of the Treasury shall include in the semiannual reports required by [section 405(b) of title 5](/usc/5/405.md?p=b), a summary of the findings and assessments under [paragraph (1)](#e-1), and shall appear before the appropriate committees of Congress, if requested, to present each such report.
  - (4) **Termination of responsibilities—** The duties and responsibilities of the Inspector General of the Department of the Treasury under this subsection shall terminate 1 year after the date on which the obligations purchased by the [Secretary](/usc/12/5301.md?p=14) from the [Corporation](/usc/12/5301.md?p=7) under [section 5390 of this title](/usc/12/5390.md) are fully redeemed.
- (f) **Primary financial regulatory agency Inspector General reviews—**
  - (1) **Scope—** Upon the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver for a [covered financial company](/usc/12/5381.md?p=a-8) supervised by a Federal [primary financial regulatory agency](/usc/12/5301.md?p=12) or the [Board of Governors](/usc/12/5301.md?p=3) under [section 5365 of this title](/usc/12/5365.md), the Inspector General of the [agency](/usc/12/1422.md?p=12) or the [Board of Governors](/usc/12/5301.md?p=3) shall make a written report reviewing the supervision by the [agency](/usc/12/1422.md?p=12) or the [Board of Governors](/usc/12/5301.md?p=3) of the [covered financial company](/usc/12/5381.md?p=a-8), which shall—
    - (A) evaluate the effectiveness of the [agency](/usc/12/1422.md?p=12) or the [Board of Governors](/usc/12/5301.md?p=3) in carrying out its supervisory responsibilities with respect to the [covered financial company](/usc/12/5381.md?p=a-8);
    - (B) identify any acts or omissions on the part of [agency](/usc/12/1422.md?p=12) or [Board of Governors](/usc/12/5301.md?p=3) officials that contributed to the [covered financial company](/usc/12/5381.md?p=a-8) being in [default](/usc/12/1467a.md?p=e-7-A) or [in danger of default](/usc/12/1467a.md?p=e-7-A);
    - (C) identify any actions that could have been taken by the [agency](/usc/12/1422.md?p=12) or the [Board of Governors](/usc/12/5301.md?p=3) that would have prevented the [company](/usc/12/24a.md?p=g-1) from being in [default](/usc/12/1467a.md?p=e-7-A) or [in danger of default](/usc/12/1467a.md?p=e-7-A); and
    - (D) recommend appropriate administrative or legislative action.
  - (2) **Reports and testimony—** Not later than 1 year after the date of appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver under this subchapter, the Inspector General of the Federal [primary financial regulatory agency](/usc/12/5301.md?p=12) or the [Board of Governors](/usc/12/5301.md?p=3) shall provide the report required by [paragraph (1)](#f-1) to such [agency](/usc/12/1422.md?p=12) or the [Board of Governors](/usc/12/5301.md?p=3), and along with such [agency](/usc/12/1422.md?p=12) or the [Board of Governors](/usc/12/5301.md?p=3), as applicable, shall appear before the appropriate committees of Congress, if requested, to present the report required by [paragraph (1)](#f-1). Not later than 90 days after the date of receipt of the report required by [paragraph (1)](#f-1), such [agency](/usc/12/1422.md?p=12) or the [Board of Governors](/usc/12/5301.md?p=3), as applicable, shall provide a written report to Congress describing any actions taken in response to the recommendations in the report, and if no such actions were taken, describing the reasons why no actions were taken.

# §5392. Prohibition of circumvention and prevention of conflicts of interest

- (a) **No other funding—** [Funds](/usc/12/4702.md?p=10) for the orderly liquidation of any [covered financial company](/usc/12/5381.md?p=a-8) under this subchapter shall only be provided as specified under this subchapter.
- (b) **Limit on governmental actions—** No governmental entity may take any action to circumvent the purposes of this subchapter.
- (c) **Conflict of interest—** In the event that the [Corporation](/usc/12/5301.md?p=7) is appointed receiver for more than 1 [covered financial company](/usc/12/5381.md?p=a-8) or is appointed receiver for a [covered financial company](/usc/12/5381.md?p=a-8) and receiver for any [insured depository institution](/usc/12/24a.md?p=g-2) that is an [affiliate](/usc/12/24a.md?p=g-1) of such [covered financial company](/usc/12/5381.md?p=a-8), the [Corporation](/usc/12/5301.md?p=7) shall take appropriate action, as necessary to avoid any conflicts of interest that may arise in connection with multiple receiverships.

# §5393. Ban on certain activities by senior executives and directors

- (a) **Prohibition authority—** The [Board of Governors](/usc/12/5301.md?p=3) or, if the [covered financial company](/usc/12/5381.md?p=a-8) was not supervised by the [Board of Governors](/usc/12/5301.md?p=3), the [Corporation](/usc/12/5301.md?p=7), may exercise the authority provided by this section.
- (b) **Authority to issue order—** The appropriate [agency](/usc/12/1422.md?p=12) described in [subsection (a)](#a) may take any action authorized by [subsection (c)](#c), if the [agency](/usc/12/1422.md?p=12) determines that—
  - (1) a senior executive or a [director](/usc/12/2279bb.md?p=3) of the [covered financial company](/usc/12/5381.md?p=a-8), prior to the appointment of the [Corporation](/usc/12/5301.md?p=7) as receiver, has, directly or indirectly—
    - (A) violated—
      - (i) any law or regulation;
      - (ii) any cease-and-desist [order which has become final](/usc/12/2271.md?p=1);
      - (iii) any condition imposed in writing by a [Federal agency](/usc/12/3101.md?p=5) in connection with any action on any application, notice, or request by such [company](/usc/12/24a.md?p=g-1) or senior executive; or
      - (iv) any written agreement between such [company](/usc/12/24a.md?p=g-1) and such [agency](/usc/12/1422.md?p=12);
    - (B) engaged or participated in any unsafe or unsound practice in connection with any [financial company](/usc/12/5381.md?p=a-11); or
    - (C) committed or engaged in any act, omission, or practice which constitutes a breach of the fiduciary duty of such senior executive or [director](/usc/12/2279bb.md?p=3);
  - (2) by reason of the violation, practice, or breach described in any subparagraph of [paragraph (1)](#b-1), such senior executive or [director](/usc/12/2279bb.md?p=3) has received financial gain or other benefit by reason of such violation, practice, or breach and such violation, practice, or breach contributed to the failure of the [company](/usc/12/24a.md?p=g-1); and
  - (3) such violation, practice, or breach—
    - (A) involves personal dishonesty on the part of such senior executive or [director](/usc/12/2279bb.md?p=3); or
    - (B) demonstrates willful or continuing disregard by such senior executive or [director](/usc/12/2279bb.md?p=3) for the safety or soundness of such [company](/usc/12/24a.md?p=g-1).
- (c) **Authorized actions—**
  - (1) **In general—** The appropriate [agency](/usc/12/1422.md?p=12) for a [financial company](/usc/12/5381.md?p=a-11), as described in [subsection (a)](#a), may serve upon a senior executive or [director](/usc/12/2279bb.md?p=3) described in [subsection (b)](#b) a written notice of the intention of the [agency](/usc/12/1422.md?p=12) to prohibit any further [participation](/usc/12/2206a.md?p=a-1) by such [person](/usc/12/5481.md?p=19), in any manner, in the conduct of the affairs of any [financial company](/usc/12/5381.md?p=a-11) for a period of time determined by the appropriate [agency](/usc/12/1422.md?p=12) to be commensurate with such violation, practice, or breach, provided such period shall be not less than 2 years.
  - (2) **Procedures—** The due process requirements and other procedures under section 8(e) of the Federal [Deposit](/usc/12/5301.md?p=18-A) Insurance Act ([12 U.S.C. 1818(e)](/usc/12/1818.md?p=e)) shall apply to actions under this section as if the [covered financial company](/usc/12/5381.md?p=a-8) were an [insured depository institution](/usc/12/24a.md?p=g-2) and the senior executive or [director](/usc/12/2279bb.md?p=3) were an institution-affiliated party, as those terms are defined in that Act [[12 U.S.C. 1811](/usc/12/1811.md) et seq.].
- (d) **Regulations—** The [Corporation](/usc/12/5301.md?p=7) and the [Board of Governors](/usc/12/5301.md?p=3), in consultation with the [Council](/usc/12/5301.md?p=8), shall jointly prescribe rules or regulations to administer and carry out this section, [including](/usc/12/25b.md?p=a-3) rules, regulations, or guidelines to further define the term senior executive for the purposes of this section.

# §5394. Prohibition on taxpayer funding

- (a) **Liquidation required—** All [financial companies](/usc/12/5381.md?p=a-11) put into receivership under this subchapter shall be liquidated. No taxpayer [funds](/usc/12/4702.md?p=10) shall be used to prevent the liquidation of any [financial company](/usc/12/5381.md?p=a-11) under this subchapter.
- (b) **Recovery of funds—** All [funds](/usc/12/4702.md?p=10) expended in the liquidation of a [financial company](/usc/12/5381.md?p=a-11) under this subchapter shall be recovered from the disposition of assets of such [financial company](/usc/12/5381.md?p=a-11), or shall be the responsibility of the financial sector, through assessments.
- (c) **No losses to taxpayers—** Taxpayers shall bear no losses from the exercise of any authority under this subchapter.