Title 11 — Bankruptcy
Chapter 3 — Case Administration
§ 345. Money of estates
Statutory text
A trustee in a case under this title may make such deposit or investment of the money of the estate for which such trustee serves as will yield the maximum reasonable net return on such money, taking into account the safety of such deposit or investment.
Except with respect to a deposit or investment that is insured or guaranteed by the United States or by a department, agency, or instrumentality of the United States or backed by the full faith and credit of the United States, the trustee shall require from an entity with which such money is deposited or invested—
a bond—
in favor of the United States;
secured by the undertaking of a corporate surety approved by the United States trustee for the district in which the case is pending; and
conditioned on—
a proper accounting for all money so deposited or invested and for any return on such money;
prompt repayment of such money and return; and
faithful performance of duties as a depository; or
the deposit of securities of the kind specified in section 9303 of title 31;
unless the court for cause orders otherwise.
An entity with which such moneys are deposited or invested is authorized to deposit or invest such moneys as may be required under this section.
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.
Pub. L. 95–598 · 92 Stat. 2549
Enacted · 11 U.S.C. § 345
Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2565
Source evidence
Code source credit
Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2565Pub. L. 97–258 § 3(c) · 96 Stat. 1064
Substituted · 11 U.S.C. § 345(b)(2)
Pub. L. 97–258 substituted “section 9303 of title 31” for “section 15 of title 6”
Source evidence
Code amendment note
Subsec. (b)(2). Pub. L. 97–258 substituted “section 9303 of title 31” for “section 15 of title 6”.Pub. L. 98–353 title III § 437 · 98 Stat. 333
Added · 11 U.S.C. § 345(c)
Pub. L. 98–353 added subsec. (c)
Source evidence
Code amendment note
Subsec. (c). Pub. L. 98–353 added subsec. (c).Enacted provision · exact public law section
Sec. 437. Section 345 of title 11 of the United States Code is amended by adding at the end thereof a new subsection (c) as follows: “(c) An entity with which such moneys are deposited or invested is authorized to deposit or invest such moneys as may be required under this section”.Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986
Pub. L. 99–554 title II § 214 · 100 Stat. 3088
Amended · 11 U.S.C. § 345(b)
Pub. L. 99–554 amended subsec. (b) generally
Substituted · 11 U.S.C. § 345(b)
Pub. L. 99–554 substituting “approved by the United States trustee for the district” for “approved by the court for the district” in par. (1)(B)
Source evidence
Code amendment note
Subsec. (b). Pub. L. 99–554 amended subsec. (b) generally, substituting “approved by the United States trustee for the district” for “approved by the court for the district” in par. (1)(B).Enacted provision · exact public law section
SEC. 214. MONIES OF ESTATES. Section 345(b) of title 11, United States Code, is amended to read as follows: “(b) Except with respect to a deposit or investment that is insured or guaranteed by the United States or by a department, agency, or instrumentality of the United States or backed by the full faith and credit of the United States, the trustee shall require from an entity with which such money is deposited or invested— “(1) a bond— “(A) in favor of the United States; “(B) secured by the undertaking of a corporate surety approved by the United States trustee for the district in which the case is pending; and “(C) conditioned on— “(i) a proper accounting for all money so deposited or invested and for any return on such money; “(ii) prompt repayment of such money and return; and “(iii) faithful performance of duties as a depository; or “(2) the deposit of securities of the kind specified in section 9303 of title 31.”.Bankruptcy Reform Act of 1994
Pub. L. 103–394 title II § 210 · 108 Stat. 4106
Substituted · 11 U.S.C. § 345(b)
Pub. L. 103–394 substituted semicolon for period at end of par. (2)
Inserted · 11 U.S.C. § 345(b)
Pub. L. 103–394 inserted concluding provisions after par. (2)
Source evidence
Code amendment note
Subsec. (b). Pub. L. 103–394 substituted semicolon for period at end of par. (2) and inserted concluding provisions after par. (2).Enacted provision · exact public law section
SEC. 210. INVESTMENT OF MONEY OF THE ESTATE. Section 345(b) of title 11, United States Code, is amended— (1) in paragraph (2) by striking the period at the end and inserting a semicolon, and (2) by adding at the end the following: “unless the court for cause orders otherwise.”.Effective date note
Amendment 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.
5 of 7 references resolved to an enrolled provision · 2 partial
Notes
Historical and Revision Notes
legislative statements
The House amendment moves section 345(c) of the House bill to chapter 15 as part of the pilot program for the U.S. trustees. The bond required by section 345(b) may be a blanket bond posted by the financial depository sufficient to cover deposits by trustees in several cases, as is done under current law.
senate report no. 95–989
This section is a significant departure from section 61 of the Bankruptcy Act [section 101 of former title 11]. It permits a trustee in a bankruptcy case to make such deposit of investment of the money of the estate for which he serves as will yield the maximum reasonable net return on the money, taking into account the safety of such deposit or investment. Under current law, the trustee is permitted to deposit money only with banking institutions. Thus, the trustee is generally unable to secure a high rate of return on money of estates pending distribution, to the detriment of creditors. Under this section, the trustee may make deposits in savings and loans, may purchase government bonds, or make such other deposit or investment as is appropriate. Under proposed 11 U.S.C. 541(a)(6), and except as provided in subsection (c) of this section, any interest or gain realized on the deposit or investment of funds under this section will become property of the estate, and will thus enhance the recovery of creditors.
In order to protect the creditors, subsection (b) requires certain precautions against loss of the money so deposited or invested. The trustee must require from a person with which he deposits or invests money of an estate a bond in favor of the United States secured by approved corporate surety and conditioned on a proper accounting for all money deposited or invested and for any return on such money. Alternately, the trustee may require the deposit of securities of the kind specified in section 15 of title 6 of the United States Code [31 U.S.C. 9303], which governs the posting of security by banks that receive public moneys on deposit. These bonding requirements do not apply to deposits or investments that are insured or guaranteed the United States or a department, agency, or instrumentality of the United States, or that are backed by the full faith and credit of the United States.
These provisions do not address the question of aggregation of funds by a private chapter 13 trustee and are not to be construed as excluding such possibility. The Rules of Bankruptcy Procedure may provide for aggregation under appropriate circumstances and adequate safeguards in cases where there is a significant need, such as in districts in which there is a standing chapter 13 trustee. In such case, the interest or return on the funds would help defray the cost of administering the cases in which the standing trustee serves.
Editorial Notes
Amendments1982–1994 · 4 rounds
1994
Subsec. (b). Pub. L. 103–394 substituted semicolon for period at end of par. (2) and inserted concluding provisions after par. (2).
1986
Subsec. (b). Pub. L. 99–554 amended subsec. (b) generally, substituting “approved by the United States trustee for the district” for “approved by the court for the district” in par. (1)(B).
1984
Subsec. (c). Pub. L. 98–353 added subsec. (c).
1982
Subsec. (b)(2). Pub. L. 97–258 substituted “section 9303 of title 31” for “section 15 of title 6”.
Statutory Notes and Related Subsidiaries
Effective Date of 1994 Amendment
Amendment by Pub. L. 103–394 effective , and not applicable with respect to cases commenced under this title before , see section 702 of Pub. L. 103–394, set out as a note under section 101 of this title.
Effective Date of 1986 Amendment
Effective date and applicability of amendment by Pub. L. 99–554 dependent upon the judicial district involved, see section 302(d), (e) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure.
Effective Date of 1984 Amendment
Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after , see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title.