§ 305. Abstention

Statutory text

The court, after notice and a hearing, may dismiss a case under this title, or may suspend all proceedings in a case under this title, at any time if—

the interests of creditors and the debtor would be better served by such dismissal or suspension; or

a petition under section 1515 for recognition of a foreign proceeding has been granted; and

the purposes of chapter 15 of this title would be best served by such dismissal or suspension.

A foreign representative may seek dismissal or suspension under subsection (a)(2) of this section.

An order under subsection (a) of this section dismissing a case or suspending all proceedings in a case, or a decision not so to dismiss or suspend, is not reviewable by appeal or otherwise by the court of appeals under section 158(d), 1291, or 1292 of title 28 or by the Supreme Court of the United States under section 1254 of title 28.

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1978
Pub. L. 95–598 · 92 Stat. 2549
Enacted · 11 U.S.C. § 305
Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2561
Source evidence
Code source credit
Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2561
1990
Federal Courts Study Committee Implementation Act of 1990
Pub. L. 101–650 title III § 309(a) · 104 Stat. 5089
Inserted · 11 U.S.C. § 305(c)
Pub. L. 101–650 inserted before period at end “by the court of appeals under section 158(d), 1291, or 1292 of this title or by the Supreme Court of the United States under section 1254 of this title”
Source evidence
Code amendment note
Subsec. (c). Pub. L. 101–650 inserted before period at end “by the court of appeals under section 158(d), 1291, or 1292 of this title or by the Supreme Court of the United States under section 1254 of this title”.
Enacted provision · exact public law section
(a) Abstention Determinations Under Title11, United States Code.— Section 305(c) of title 11, United States Code, is amended by inserting before the period the following: “by the court of appeals under section 158(d), 1291, or 1292 of this title or by the Supreme Court of the United States under section 1254 of this title”.
1991
Pub. L. 102–198 § 5 · 105 Stat. 1623
Substituted · 11 U.S.C. § 305(c)
Pub. L. 102–198 substituted “title 28” for “this title” in two places
Source evidence
Code amendment note
Subsec. (c). Pub. L. 102–198 substituted “title 28” for “this title” in two places.
Enacted provision · exact public law section
SEC. 5. APPEAL OF ABSTENTION DETERMINATIONS UNDER TITLE 11 OF THE UNITED STATES CODE. Section 305(c) of title 11, United States Code, as amended by section 309 of the Judicial Improvements Act of 1990, is amended by striking “this title” both places it appears and inserting “title 28”.
2005
Pub. L. 109–8 title VIII § 802(d)(6) · 119 Stat. 23
1. Added · 11 U.S.C. § 305(a)(2)
  Pub. L. 109–8 added par. (2)
2. Struck · 11 U.S.C. § 305(a)(2)
  Pub. L. 109–8 struck out former par. (2) which read as follows:
Source evidence
Code amendment note
Subsec. (a)(2). Pub. L. 109–8 added par. (2) and struck out former par. (2) which read as follows:
“(2)(A) there is pending a foreign proceeding; and “(B) the factors specified in section 304(c) of this title warrant such dismissal or suspension.”
Enacted provision · exact public law section
(6) in section 305(a) by striking paragraph (2) and inserting the following: “(2) (A) a petition under section 1515 for recognition of a foreign proceeding has been granted; and “(B) the purposes of chapter 15 of this title would be best served by such dismissal or suspension.” ; and
Effective date note
Amendment 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.

4 of 5 references resolved to an enrolled provision · 1 partial

Notes

Historical and Revision Notes

senate report no. 95–989

A principle of the common law requires a court with jurisdiction over a particular matter to take jurisdiction. This section recognizes that there are cases in which it would be appropriate for the court to decline jurisdiction. Abstention under this section, however, is of jurisdiction over the entire case. Abstention from jurisdiction over a particular proceeding in a case is governed by proposed 28 U.S.C. 1471(c). Thus, the court is permitted, if the interests of creditors and the debtor would be better served by dismissal of the case or suspension of all proceedings in the case, to so order. The court may dismiss or suspend under the first paragraph, for example, if an arrangement is being worked out by creditors and the debtor out of court, there is no prejudice to the results of creditors in that arrangement, and an involuntary case has been commenced by a few recalcitrant creditors to provide a basis for future threats to extract full payment. The less expensive out-of-court workout may better serve the interests in the case. Likewise, if there is pending a foreign proceeding concerning the debtor and the factors specified in proposed 11 U.S.C. 304(c) warrant dismissal or suspension, the court may so act.

Subsection (b) gives a foreign representative authority to appear in the bankruptcy court to request dismissal or suspension. Subsection (c) makes the dismissal or suspension order nonreviewable by appeal or otherwise. The bankruptcy court, based on its experience and discretion is vested with the power of decision.

Editorial Notes

Amendments1990–2005 · 3 rounds

2005

Subsec. (a)(2). Pub. L. 109–8 added par. (2) and struck out former par. (2) which read as follows:

“(2)(A) there is pending a foreign proceeding; and

“(B) the factors specified in section 304(c) of this title warrant such dismissal or suspension.”

1991

Subsec. (c). Pub. L. 102–198 substituted “title 28” for “this title” in two places.

1990

Subsec. (c). Pub. L. 101–650 inserted before period at end “by the court of appeals under section 158(d), 1291, or 1292 of this title or by the Supreme Court of the United States under section 1254 of this title”.

Statutory Notes and Related Subsidiaries

Effective Date of 2005 Amendment

Amendment 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.

Credits

1978–2005 · 4 acts

1978Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2561
1990Pub. L. 101–650, title III, § 309(a), Dec. 1, 1990, 104 Stat. 5113
1991Pub. L. 102–198, § 5, Dec. 9, 1991, 105 Stat. 1623
2005Pub. L. 109–8, title VIII, § 802(d)(6), Apr. 20, 2005, 119 Stat. 146.

Show as published

(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2561; Pub. L. 101–650, title III, § 309(a), Dec. 1, 1990, 104 Stat. 5113; Pub. L. 102–198, § 5, Dec. 9, 1991, 105 Stat. 1623; Pub. L. 109–8, title VIII, § 802(d)(6), Apr. 20, 2005, 119 Stat. 146.)