republic-os/legal/us/code/title-11/chapter-7/section-746.md

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LegalText	11 U.S.C. § 746	Extent of customer claims	us	united_states_code	code_section	11	BANKRUPTCY	7	LIQUIDATION	746	11 U.S.C. § 746	current	119-100	2026-06-26	official	https://uscode.house.gov/download/releasepoints/us/pl/119/100/xml_usc11@119-100.zip	/us/usc/t11/s746	data/legal/raw/us/code/title-11/usc11.xml	ad9d6fa2739a9ff0948b008595bd130fdc5cd0f0bafab3348114bfde28052460	49b32bf784de01de21874d64b5d1d78d1d245352824a03caa6d6b941a4a2c9a2	2ed6f4028416b16f7acba8458a424d1775a97d2e7107504302e3e8db43898924	2026-07-04	official	legal us-code

11 U.S.C. § 746 - Extent of customer claims

Text

(a) If, after the date of the filing of the petition, an entity enters into a transaction with the debtor, in a manner that would have made such entity a customer had such transaction occurred before the date of the filing of the petition, and such transaction was entered into by such entity in good faith and before the qualification under section 322 of this title of a trustee, such entity shall be deemed a customer, and the date of such transaction shall be deemed to be the date of the filing of the petition for the purpose of determining such entity’s net equity.

(b) An entity does not have a claim as a customer to the extent that such entity transferred to the debtor cash or a security that, by contract, agreement, understanding, or operation of law, is—

(1) part of the capital of the debtor; or

(2) subordinated to the claims of any or all creditors.

(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2613; Pub. L. 97–222, § 12, July 27, 1982, 96 Stat. 238.)

Notes

Historical and Revision Notes

senate report no. 95–989Section 746(a) protects entities who deal in good faith with the debtor after the filing of the petition and before a trustee is appointed by deeming such entities to be customers. The principal application of this section will be in an involuntary case before the order for relief, because § 701(b) requires prompt appointment of an interim trustee after the order for relief. Subsection (b) indicates that an entity who holds securities that are either part of the capital of the debtor or that are subordinated to the claims of any creditor of the debtor is not a customer with respect to those securities. This subsection will apply when the stockbroker has sold securities in itself to the customer or when the customer has otherwise placed such securities in an account with the stockbroker.

Editorial Notes

Amendments1982—Pub. L. 97–222, § 12(c), substituted “claims” for “claim” in section catchline. Subsec. (a). Pub. L. 97–222, § 12(a), substituted “enters into” for “effects, with respect to cash or a security,”, struck out “with respect to such cash or security” wherever appearing, and substituted “the date of the filing of the petition” for “such date”, and “entered into” for “effected”. Subsec. (b). Pub. L. 97–222, § 12(b), substituted “transferred to the debtor” for “has a claim for” in provisions preceding par. (1), and struck out “is” in par. (2).