--- kind: "range" citation: "11 U.S.C. §§ 559–562" title: "11" from: "559" to: "562" count: 4 release: "119-102" url: "https://uscodex.org/usc/11/559..562" --- # §559. Contractual right to liquidate, terminate, or accelerate a repurchase agreement The exercise of a contractual right of a [repo participant](/usc/11/101.md?p=46) or [financial participant](/usc/11/101.md?p=22A) to cause the liquidation, termination, or acceleration of a [repurchase agreement](/usc/11/101.md?p=47) because of a condition of the kind specified in [section 365(e)(1) of this title](/usc/11/365.md?p=e-1) shall not be stayed, avoided, or otherwise limited by operation of any provision of this title or by order of a court or administrative agency in any proceeding under this title, unless, where the [debtor](/usc/11/101.md?p=13) is a [stockbroker](/usc/11/101.md?p=53A) or [securities clearing agency](/usc/11/101.md?p=48), such order is authorized under the provisions of the [Securities](/usc/11/101.md?p=49) Investor Protection Act of 1970 or any statute administered by the [Securities](/usc/11/101.md?p=49) and Exchange Commission. In the event that a [repo participant](/usc/11/101.md?p=46) or [financial participant](/usc/11/101.md?p=22A) liquidates one or more [repurchase agreements](/usc/11/101.md?p=47) with a [debtor](/usc/11/101.md?p=13) and under the terms of one or more such agreements has agreed to deliver assets subject to [repurchase agreements](/usc/11/101.md?p=47) to the [debtor](/usc/11/101.md?p=13), any excess of the market prices received on liquidation of such assets (or if any such assets are not disposed of on the date of liquidation of such [repurchase agreements](/usc/11/101.md?p=47), at the prices available at the time of liquidation of such [repurchase agreements](/usc/11/101.md?p=47) from a generally recognized source or the most recent closing bid quotation from such a source) over the sum of the stated repurchase prices and all expenses in connection with the liquidation of such [repurchase agreements](/usc/11/101.md?p=47) shall be deemed property of the estate, subject to the available rights of setoff. As used in this section, the term “contractual right” includes a right set forth in a rule or bylaw of a derivatives clearing organization (as defined in the Commodity Exchange Act), a multilateral clearing organization (as defined in the Federal Deposit Insurance [Corporation](/usc/11/101.md?p=9) Improvement Act of 1991), a national [securities](/usc/11/101.md?p=49) exchange, a national [securities](/usc/11/101.md?p=49) association, a [securities clearing agency](/usc/11/101.md?p=48), a contract market designated under the Commodity Exchange Act, a derivatives transaction execution facility registered under the Commodity Exchange Act, or a board of trade (as defined in the Commodity Exchange Act) or in a resolution of the governing board thereof and a right, whether or not evidenced in writing, arising under common law, under law merchant or by reason of normal business practice. # §560. Contractual right to liquidate, terminate, or accelerate a swap agreement The exercise of any contractual right of any [swap participant](/usc/11/101.md?p=53C) or [financial participant](/usc/11/101.md?p=22A) to cause the liquidation, termination, or acceleration of one or more [swap agreements](/usc/11/101.md?p=53B) because of a condition of the kind specified in [section 365(e)(1) of this title](/usc/11/365.md?p=e-1) or to offset or net out any termination values or payment amounts arising under or in connection with the termination, liquidation, or acceleration of one or more [swap agreements](/usc/11/101.md?p=53B) shall not be stayed, avoided, or otherwise limited by operation of any provision of this title or by order of a court or administrative agency in any proceeding under this title. As used in this section, the term “contractual right” includes a right set forth in a rule or bylaw of a derivatives clearing organization (as defined in the Commodity Exchange Act), a multilateral clearing organization (as defined in the Federal Deposit Insurance [Corporation](/usc/11/101.md?p=9) Improvement Act of 1991), a national [securities](/usc/11/101.md?p=49) exchange, a national [securities](/usc/11/101.md?p=49) association, a [securities clearing agency](/usc/11/101.md?p=48), a contract market designated under the Commodity Exchange Act, a derivatives transaction execution facility registered under the Commodity Exchange Act, or a board of trade (as defined in the Commodity Exchange Act) or in a resolution of the governing board thereof and a right, whether or not evidenced in writing, arising under common law, under law merchant, or by reason of normal business practice. # §561. Contractual right to terminate, liquidate, accelerate, or offset under a master netting agreement and across contracts; proceedings under chapter 15 - (a) Subject to [subsection (b)](#b), the exercise of any [contractual right](#c), because of a condition of the kind specified in [section 365(e)(1)](/usc/11/365.md?p=e-1), to cause the termination, liquidation, or acceleration of or to offset or net termination values, payment amounts, or other [transfer](/usc/11/101.md?p=54) obligations arising under or in connection with one or more (or the termination, liquidation, or acceleration of one or more)— - (1) [securities](/usc/11/101.md?p=49) contracts, as defined in [section 741(7)](/usc/11/741.md?p=7); - (2) commodity contracts, as defined in [section 761(4)](/usc/11/761.md?p=4); - (3) [forward contracts](/usc/11/101.md?p=25); - (4) [repurchase agreements](/usc/11/101.md?p=47); - (5) [swap agreements](/usc/11/101.md?p=53B); or - (6) [master netting agreements](/usc/11/101.md?p=38A), shall not be stayed, avoided, or otherwise limited by operation of any provision of this title or by any order of a court or administrative agency in any proceeding under this title. - (b) - (1) A party may exercise a [contractual right](#c) described in [subsection (a)](#a) to terminate, liquidate, or accelerate only to the extent that such party could exercise such a right under section [555](/usc/11/555.md), [556](/usc/11/556.md), [559](/usc/11/559.md), or [560](/usc/11/560.md) for each individual contract covered by the [master netting agreement](/usc/11/101.md?p=38A) in issue. - (2) If a [debtor](/usc/11/101.md?p=13) is a [commodity broker](/usc/11/101.md?p=6) subject to subchapter IV of [chapter 7](/usc/11/ch7.md)— - (A) a party may not net or offset an obligation to the [debtor](/usc/11/101.md?p=13) arising under, or in connection with, a commodity contract traded on or subject to the rules of a contract market designated under the Commodity Exchange Act or a derivatives transaction execution facility registered under the Commodity Exchange Act against any [claim](/usc/11/101.md?p=5) arising under, or in connection with, other instruments, contracts, or agreements listed in [subsection (a)](#a) except to the extent that the party has positive net equity in the commodity accounts at the [debtor](/usc/11/101.md?p=13), as calculated under such subchapter; and - (B) another [commodity broker](/usc/11/101.md?p=6) may not net or offset an obligation to the [debtor](/usc/11/101.md?p=13) arising under, or in connection with, a commodity contract entered into or held on behalf of a customer of the [debtor](/usc/11/101.md?p=13) and traded on or subject to the rules of a contract market designated under the Commodity Exchange Act or a derivatives transaction execution facility registered under the Commodity Exchange Act against any [claim](/usc/11/101.md?p=5) arising under, or in connection with, other instruments, contracts, or agreements listed in [subsection (a)](#a). - (3) No provision of subparagraph [(A)](#b-2-A) or [(B)](#b-2-B) of paragraph (2) shall prohibit the offset of [claims](/usc/11/101.md?p=5) and obligations that arise under— - (A) a cross-margining agreement or similar arrangement that has been approved by the Commodity Futures Trading Commission or submitted to the Commodity Futures Trading Commission under paragraph (1) or (2) of section 5c(c) of the Commodity Exchange Act and has not been abrogated or rendered ineffective by the Commodity Futures Trading Commission; or - (B) any other netting agreement between a clearing organization (as defined in [section 761](/usc/11/761.md)) and another [entity](/usc/11/101.md?p=15) that has been approved by the Commodity Futures Trading Commission. - (c) As used in this section, the term “contractual right” includes a right set forth in a rule or bylaw of a derivatives clearing organization (as defined in the Commodity Exchange Act), a multilateral clearing organization (as defined in the Federal Deposit Insurance [Corporation](/usc/11/101.md?p=9) Improvement Act of 1991), a national [securities](/usc/11/101.md?p=49) exchange, a national [securities](/usc/11/101.md?p=49) association, a [securities clearing agency](/usc/11/101.md?p=48), a contract market designated under the Commodity Exchange Act, a derivatives transaction execution facility registered under the Commodity Exchange Act, or a board of trade (as defined in the Commodity Exchange Act) or in a resolution of the governing board thereof, and a right, whether or not evidenced in writing, arising under common law, under law merchant, or by reason of normal business practice. - (d) Any provisions of this title relating to [securities](/usc/11/101.md?p=49) contracts, commodity contracts, [forward contracts](/usc/11/101.md?p=25), [repurchase agreements](/usc/11/101.md?p=47), [swap agreements](/usc/11/101.md?p=53B), or [master netting agreements](/usc/11/101.md?p=38A) shall apply in a case under [chapter 15](/usc/11/ch15.md), so that enforcement of contractual provisions of such contracts and agreements in accordance with their terms will not be stayed or otherwise limited by operation of any provision of this title or by order of a court in any case under this title, and to limit avoidance powers to the same extent as in a proceeding under chapter [7](/usc/11/ch7.md) or [11](/usc/11/ch11.md) of this title (such enforcement not to be limited based on the presence or absence of assets of the [debtor](/usc/11/101.md?p=13) in the [United States](/usc/11/101.md?p=55)). # §562. Timing of damage measurement in connection with swap agreements, securities contracts, forward contracts, commodity contracts, repurchase agreements, and master netting agreements - (a) If the [trustee](/usc/11/1502.md?p=6) rejects a [swap agreement](/usc/11/101.md?p=53B), [securities](/usc/11/101.md?p=49) contract (as defined in [section 741](/usc/11/741.md)), [forward contract](/usc/11/101.md?p=25), commodity contract (as defined in [section 761](/usc/11/761.md)), [repurchase agreement](/usc/11/101.md?p=47), or [master netting agreement](/usc/11/101.md?p=38A) pursuant to [section 365(a)](/usc/11/365.md?p=a), or if a [forward contract merchant](/usc/11/101.md?p=26), [stockbroker](/usc/11/101.md?p=53A), [financial institution](/usc/11/101.md?p=22), [securities clearing agency](/usc/11/101.md?p=48), [repo participant](/usc/11/101.md?p=46), [financial participant](/usc/11/101.md?p=22A), [master netting agreement participant](/usc/11/101.md?p=38B), or [swap participant](/usc/11/101.md?p=53C) liquidates, terminates, or accelerates such contract or agreement, damages shall be measured as of the earlier of— - (1) the date of such rejection; or - (2) the date or dates of such liquidation, termination, or acceleration. - (b) If there are not any commercially reasonable determinants of value as of any date referred to in paragraph [(1)](#a-1) or [(2)](#a-2) of subsection (a), damages shall be measured as of the earliest subsequent date or dates on which there are commercially reasonable determinants of value. - (c) For the purposes of [subsection (b)](#b), if damages are not measured as of the date or dates of rejection, liquidation, termination, or acceleration, and the [forward contract merchant](/usc/11/101.md?p=26), [stockbroker](/usc/11/101.md?p=53A), [financial institution](/usc/11/101.md?p=22), [securities clearing agency](/usc/11/101.md?p=48), [repo participant](/usc/11/101.md?p=46), [financial participant](/usc/11/101.md?p=22A), [master netting agreement participant](/usc/11/101.md?p=38B), or [swap participant](/usc/11/101.md?p=53C) or the [trustee](/usc/11/1502.md?p=6) objects to the timing of the measurement of damages— - (1) the [trustee](/usc/11/1502.md?p=6), in the case of an objection by a [forward contract merchant](/usc/11/101.md?p=26), [stockbroker](/usc/11/101.md?p=53A), [financial institution](/usc/11/101.md?p=22), [securities clearing agency](/usc/11/101.md?p=48), [repo participant](/usc/11/101.md?p=46), [financial participant](/usc/11/101.md?p=22A), [master netting agreement participant](/usc/11/101.md?p=38B), or [swap participant](/usc/11/101.md?p=53C); or - (2) the [forward contract merchant](/usc/11/101.md?p=26), [stockbroker](/usc/11/101.md?p=53A), [financial institution](/usc/11/101.md?p=22), [securities clearing agency](/usc/11/101.md?p=48), [repo participant](/usc/11/101.md?p=46), [financial participant](/usc/11/101.md?p=22A), [master netting agreement participant](/usc/11/101.md?p=38B), or [swap participant](/usc/11/101.md?p=53C), in the case of an objection by the [trustee](/usc/11/1502.md?p=6), has the burden of proving that there were no commercially reasonable determinants of value as of such date or dates.