§549 — Title 11 Bankruptcy | U.S. Code

Summary

The trustee can undo transfers of estate property made after the bankruptcy case starts if the transfer was allowed only by sections 303(f) or 542(c) of the bankruptcy law or was not allowed by the law or the court. In an involuntary case, the trustee cannot undo a transfer made after the case began but before the court’s order for relief when the buyer gave value after the case started (value can include services but not payment or security for a debt that existed before the case). The trustee also cannot undo a transfer of real estate to a good‑faith buyer who did not know about the case and paid current fair value, if the buyer recorded or otherwise perfected the ownership before a copy or notice of the petition was filed. If the buyer paid less than fair value, they get a lien for the amount they did give unless notice was filed first. Any action to undo a transfer must start no later than two years after the transfer or before the case is closed or dismissed, whichever happens first.

Title 11, §549

Bankruptcy — Source: USLM XML via OLRC

(a)Except as provided in subsection (b) or (c) of this section, the trustee may avoid a transfer of property of the estate—

(1)that occurs after the commencement of the case; and

(2)(A)that is authorized only under section 303(f) or 542(c) of this title; or

(B)that is not authorized under this title or by the court.

(b)In an involuntary case, the trustee may not avoid under subsection (a) of this section a transfer made after the commencement of such case but before the order for relief to the extent any value, including services, but not including satisfaction or securing of a debt that arose before the commencement of the case, is given after the commencement of the case in exchange for such transfer, notwithstanding any notice or knowledge of the case that the transferee has.

(c)The trustee may not avoid under subsection (a) of this section a transfer of an interest in real property to a good faith purchaser without knowledge of the commencement of the case and for present fair equivalent value unless a copy or notice of the petition was filed, where a transfer of an interest in such real property may be recorded to perfect such transfer, before such transfer is so perfected that a bona fide purchaser of such real property, against whom applicable law permits such transfer to be perfected, could not acquire an interest that is superior to such interest of such good faith purchaser. A good faith purchaser without knowledge of the commencement of the case and for less than present fair equivalent value has a lien on the property transferred to the extent of any present value given, unless a copy or notice of the petition was so filed before such transfer was so perfected.

(d)An action or proceeding under this section may not be commenced after the earlier of—

(1)two years after the date of the transfer sought to be avoided; or

(2)the time the case is closed or dismissed.

Notes & Related Subsidiaries

Historical and Revision Notes

Legislative Statements

section 549 of the House amendment has been redrafted in order to incorporate section 342(b) and (c) of the Senate amendment. Those sections have been consolidated and redrafted in section 549(c) of the House amendment. section 549(d) of the House amendment adopts a provision contained in section 549(c) of the Senate amendment.

senate report no. 95–989

This section modifies section 70d of current law [section 110(d) of former title 11]. It permits the trustee to avoid transfers of property that occur after the commencement of the case. The transfer must either have been unauthorized, or authorized under a section that protects only the transferor. Subsection (b) protects “involuntary gap” transferees to the extent of any value (including services, but not including satisfaction of a debt that arose before the commencement of the case), given after commencement in exchange for the transfer. Notice or knowledge of the transferee is irrelevant in determining whether he is protected under this provision.

Editorial Notes

Amendments

2005—Subsec. (c). Pub. L. 109–8 inserted “an interest in” after “transfer of” in two places and substituted “purchaser of such real property” for “purchaser of such property” and “such interest” for “the interest”. 1994—Subsec. (b). Pub. L. 103–394 inserted “the trustee may not avoid under subsection (a) of this section” after “involuntary case,”. 1986—Subsec. (b). Pub. L. 99–554 substituted “made” for “that occurs”, and “to the extent” for “is valid against the trustee to the extent of”, and inserted “is” before “given”. 1984—Subsec. (a). Pub. L. 98–353, § 464(a)(1), (2), substituted “(b) or (c)” for “(b) and (c)” in provisions preceding par. (1) and inserted “only” between “authorized” and “under” in par. (2)(A). In the original of Pub. L. 98–353, subsec. (a)(2) of section 464 thereof ended with a period but was followed by pars. (3), (4), and (5). Such pars. (3), (4), and (5) purported to amend subsec. (a) of this section in ways not susceptible of execution. In a predecessor bill [S. 445], these pars. (3), (4), and (5) formed a part of a subsec. (b) of section 361 thereof which amended subsec. (b) of this section. Such subsec. (b) of section 361 of S. 445 was not carried into Pub. L. 98–353, § 464. Subsec. (c). Pub. L. 98–353, § 464(c), amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “The trustee may not avoid under subsection (a) of this section a transfer, to a good faith purchaser without knowledge of the commencement of the case and for present fair equivalent value or to a purchaser at a judicial sale, of real property located other than in the county in which the case is commenced, unless a copy of the petition was filed in the office where conveyances of real property in such county are recorded before such transfer was so far perfected that a bona fide purchaser of such property against whom applicable law permits such transfer to be perfected cannot acquire an interest that is superior to the interest of such good faith or judicial sale purchaser. A good faith purchaser, without knowledge of the commencement of the case and for less than present fair equivalent value, of real property located other than in the county in which the case is commenced, under a transfer that the trustee may avoid under this section, has a lien on the property transferred to the extent of any present value given, unless a copy of the petition was so filed before such transfer was so perfected.” Subsec. (d)(1). Pub. L. 98–353, § 464(d), substituted “or” for “and”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2005 AmendmentAmendment by Pub. L. 109–8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under this title before such

Effective Date

, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title.

Effective Date

of 1994 AmendmentAmendment by Pub. L. 103–394 effective Oct. 22, 1994, and not applicable with respect to cases commenced under this title before Oct. 22, 1994, see section 702 of Pub. L. 103–394, set out as a note under section 101 of this title.

Effective Date

of 1986 AmendmentAmendment by Pub. L. 99–554 effective 30 days after Oct. 27, 1986, see section 302(a) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure.

Effective Date

of 1984 AmendmentAmendment by Pub. L. 98–353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title.

§549 Postpetition transactions

Summary

Title 11, §549

Notes & Related Subsidiaries

Historical and Revision Notes

Legislative Statements

senate report no. 95–989

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Effective Date

Effective Date

Effective Date

Citations & Metadata