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Title 11, BankruptcyRelease 119-102

§764 Voidable Transfers

Title 11 › CHAPTER 7 — LIQUIDATION › SUBCHAPTER IV — COMMODITY BROKER LIQUIDATION › § 764

Last updated Aug 21, 2026|Official source

Summary

The trustee may undo a debtor’s transfer of property that would have been customer property, when the trustee can undo it under sections 544, 545, 547, 548, 549, or 724(a). If the trustee undoes the transfer, that property is treated as the debtor’s property. If the transfer was to a customer or for a customer’s benefit, that customer is treated as a creditor for this purpose. The trustee cannot undo a transfer made before seven days after the order for relief if the Securities and Exchange Commission approved it by rule or order (before or after the transfer) and the transfer is either a commodity contract the debtor made or handled for a customer (and any cash, securities, or other property used as margin or security for that contract) or the liquidation of such a commodity contract.

Full Legal Text

Title 11, §764

Bankruptcy, Source: USLM XML via OLRC

(a)Except as otherwise provided in this section, any transfer by the debtor of property that, but for such transfer, would have been customer property, may be avoided by the trustee, and such property shall be treated as customer property, if and to the extent that the trustee avoids such transfer under section 544, 545, 547, 548, 549, or 724(a) of this title. For the purpose of such sections, the property so transferred shall be deemed to have been property of the debtor, and, if such transfer was made to a customer or for a customer’s benefit, such customer shall be deemed, for the purposes of this section, to have been a creditor.
(b)Notwithstanding section 544, 545, 547, 548, 549, and 724(a) of this title, the trustee may not avoid a transfer made before seven days after the order for relief, if such transfer is approved by the Commission by rule or order, either before or after such transfer, and if such transfer is—
(1)a transfer of a commodity contract entered into or carried by or through the debtor on behalf of a customer, and of any cash, securities, or other property margining or securing such commodity contract; or
(2)the liquidation of a commodity contract entered into or carried by or through the debtor on behalf of a customer.

Legislative History

Notes & Related Subsidiaries

Historical and Revision Notes

Legislative Statements

section 764 of the House amendment is derived from the House bill.

senate report no. 95–989

section 764 permits the trustee to void any transfer of property that, except for such transfer, would have been customer property, to the extent permitted under section 544, 545, 547, 548, 549, or 724(a).

house report no. 95–595

section 764 indicates the extent to which the avoiding powers may be used by the trustee under subchapter IV of chapter 7. If property recovered would have been customer property if never transferred, then subsection (a) indicates that it will be so treated when recovered. Subsection (b) prohibits avoiding any transaction that occurs before or within five days after the petition if the transaction is approved by the Commission and concerns an open contractual commitment. This enables the Commission to exercise its discretion to protect the integrity of the market by insuring that transactions cleared with other brokers will not be undone on a preference or a fraudulent transfer theory. Subsection (c) insulates variation margin payments and other deposits from the avoiding powers except to the extent of actual fraud under section 548(a)(1). This facilitates prepetition transfers and protects the ordinary course of business in the market.

Editorial Notes

Amendments

2009—Subsec. (b). Pub. L. 111–16 substituted “seven days” for “five days” in introductory provisions. 1984—Subsec. (a). Pub. L. 98–353 substituted “any transfer by the debtor” for “any transfer”. 1982—Subsec. (a). Pub. L. 97–222, § 17(a), substituted “but” for “except”, inserted “such property” after “trustee, and”, and substituted “shall be” for “is” wherever appearing. Subsec. (b). Pub. L. 97–222, § 17(b), substituted “order for relief” for “date of the filing of the petition”. Subsec. (c). Pub. L. 97–222, § 17(c), struck out subsec. (c) which provided that the trustee could not avoid a transfer that was a margin payment to or deposit with a commodity broker or forward contract merchant or was a settlement payment made by a clearing organization and that occurred before the commencement of the case.

Statutory Notes and Related Subsidiaries

Effective Date

of 2009 AmendmentAmendment by Pub. L. 111–16 effective Dec. 1, 2009, see section 7 of Pub. L. 111–16, set out as a note under section 109 of this title.

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.

Reference

Citations & Metadata

Citation

11 U.S.C. § 764

Title 11, Bankruptcy

Last Updated

Aug 21, 2026

Release point: 119-102