§ 1069. Proceedings following confirmation of arrange

ment.

Where, after the confirmation of a plan, the court shall enter an order directing that bankruptcy be proceeded with—

(1) the trustee shall, upon his appointment and qualification, be vested with the title to all the property of the debtor as of the date of the entry of the order directing that bankruptcy be proceeded with;

(2) the unsecured debts incurred by the debtor after the confirmation of the plan and before the date of the entry of the final order directing that bankruptcy be proceeded with shall, unless and except as otherwise provided in the plan or in the order confirming the plan, share on a parity with the prior unsecured debts of the same classes, provable in the ensuing bankruptcy proceeding, and for such purpose the prior unsecured debts shall be deemed to be reduced to the amounts respectively provided for them in the plan or in the order confirming the plan, less any payment made thereunder; and

(3) the provisions of chapters 1 to 7 f this title shall, insofar as they are not inconsistent or in conflict with the provisions of this section, apply to the rights, duties, and liabilities of the creditors holding debts incurred by the debtor after the confirmation of the plan and before the date of the final order directing that bankruptcy be proceeded with, and of all persons with respect to the property of the debtor, and, for the purposes of such application, the date of bankruptcy shall be taken to be the date of the entry of the order directing that bankruptcy be proceeded with. (July 1, 1898, ch. 541, § 669, as added July 7, 1952, ch. 579, § 54, 66 Stat. 437.)

EFFECTIVE DATE

Section as effective three months after July 7, 1952, see note under section 1 of this title.

SUBCHAPTER XI-PLANS, WHEN SET ASIDE OR MODIFIED

§ 1071. Fraud in procuring plan.

If, upon the application of parties in interest filed at any time within six months after a plan has been confirmed, it shall be made to appear that fraud was practiced in the procuring of such plan and that knowledge of such fraud has come to the petitioners since the confirmation of such plan

(1) if the debtor has been guilty of or has participated in the fraud or has had knowledge thereof before the confirmation and has failed to inform the court of the fraud, the court may set aside the confirmation and thereupon (a) where the petition was filed under section 1021 of this title, reinstate the pending bankruptcy proceeding, adjudge the debtor a bankrupt, if he has not already been so adjudged, and direct that the bankrupty' proceeding be proceeded with, or (b) where the petition was filed under section 1022 of this title, reinstate the proceeding, adjudge

1 So in original.

the debtor a bankrupt, and direct that bankruptcy be proceeded with pursuant to the provisions of this title; or

(2) the court may set aside the confirmation, reinstate the proceeding under the petition filed under this chapter, and hear and determine applications for leave to propose, within such time as the court may fix, alterations or modifications of the plan for the purpose of correcting the fraud;

or

(3) the court may reinstate the proceeding under the petition filed under this chapter and modify or alter the plan for the purpose of correcting the fraud, but may not materially modify or alter the plan adversely to the interests of any party who did not participate in the fraud and who does not consent to such modification or alteration, or to the prejudice of any innocent person who, for value, subsequent to the confirmation, acquired rights in reliance upon it.

(July 1, 1898, ch. 541, § 671, as added June 22, 1938, ch. 575, § 1, 52 Stat. 937.)

EFFECTIVE DATE AND CONSTRUCTION

Effective date and construction of act June 22, 1938. known as the Chandler Act, see note under section 1 of this title.

PRIOR PROVISIONS Provisions on this subject were contained in former sections 31 and 202 (k) of this title.

SUBCHAPTER XII.-GENERAL PROVISIONS

§ 1076. Suspension of statutes of limitation, etc.

All statutes of limitation affecting claims provable under this chapter and the running of all periods of time prescribed by this title in respect to the commission of acts of bankruptcy, the recovery of preferences and the avoidance of liens and transfers shall be suspended while a proceeding under this chapter is pending and until it is finally dismissed. (July 1, 1898, ch. 541, § 676, as added June 22, 1938, ch. 575, § 1, 52 Stat. 937.)

EFFECTIVE DATE AND CONSTRUCTION Effective date and construction of act June 22, 1938, known as the Chandler Act, see note under section 1 of this title.

§ 1077. Notice by mail.

Unless otherwise directed by the court, all notices required by this chapter may be given by mail to the parties entitled thereto to their addresses ascertained in the manner prescribed for other notices in section 94 of this title. (July 1, 1898, ch. 541, § 677, as added June 22, 1938, ch. 575, § 1, 52 Stat. 937.)

EFFECTIVE DATE AND CONSTRUCTION Effective date and construction of act June 22, 1938, known as the Chandler Act, see note under section 1 of this title.

CROSS REFERENCES

Notices generally, see section 1015 of this title.

§ 1078. District director of internal revenue and Federal agencies; notices.

The court shall, in every case instituted under any provisions of this chapter, mail or cause to be mailed a copy of the notice of the first meeting of creditors to the district director of internal revenue for the district in which the court is located. Whenever the

schedules of the debtor, or the list of creditors of the debtor, or any other papers filed in the case disclose a debt to the United States acting through any department, agency, or instrumentality thereof (except for any internal revenue obligation payable to the Secretary of the Treasury or his delegate), a notice of the first meeting shall be mailed as well to the head of such department, agency, or instrumentality. July 1, 1898, ch. 541, § 678, as added June 22, 1938, ch. 575, § 1, 52 Stat. 937, and amended July 12, 1960, Pub. L. 86-631, § 1, 74 Stat. 466.)

AMENDMENTS

1960-Pub. L. 86-631 substituted requirement that a copy of the first meeting of creditors shall be sent to the district director of internal revenue for the district in which the court is located and that whenever the schedules of the debtor or any other papers filed in the case disclose a debt to the United States acting through any department, agency, or instrumentality thereof (except for any internal revenue obligation payable to the Secretary of the Treasury or his delegate), a notice of the first meeting shall be mailed as well to the head of such department, agency or instrumentality, for former requirement that petitions, notices, orders, and other papers in wage earners' plans proceedings be transmitted to the Secretary of the Treasury.

EFFECTIVE DATE AND CONSTRUCTION

Effective date and construction of act June 22, 1938, known as the Chandler Act, see note under section 1 of this title.

§ 1079. Taxes; income or profit from modification of indebtedness.

No income or profit, taxable under any law of the United States or of any State now in force or which may hereafter be enacted, shall, in respect to the adjustment of the indebtedness of a debtor in a proceeding under this chapter, be deemed to have accrued to or to have been realized by a debtor by reason of a modification in or cancelation in whole or in part of any such indebtedness in a proceeding under this chapter: Provided, however, That if it shall be made to appear that the plan had for one of its principal purposes the evasion of any income tax, the exemption provided by this section shall be disallowed. (July 1, 1898, ch. 541, § 679, as added June 22, 1938, ch. 575, § 1, 52 Stat. 938.)

EFFECTIVE DATE AND CONSTRUCTION

Effective date and construction of act June 22, 1938, known as the Chandler Act, see note under section 1 of this title.

CROSS REFERENCES

Application of this section to compositions and extensions confirmed under former section 202 of this title, see section 1086 of this title.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1086 of this title.

§ 1080. Same: payment; acceptance of arrangement by taxing agency.

Any provision in this chapter to the contrary notwithstanding, all taxes which may be found to be owing to the United States or any State from a debtor within one year from the date of the filing of a petition under this chapter, and have not been assessed prior to the date of the confirmation of a plan under this chapter, and all taxes which may become owing to the United States or any State from a debtor shall be assessed against, may be collected from, and shall be paid by the debtor: Provided, however, That the United States or any State

may in writing accept the provisions of any plan dealing with the assumption, settlement, or payment of any such tax. (July 1, 1898, ch. 541, § 680, as added June 22, 1938, ch. 575, § 1, 52 Stat. 938.)

EFFECTIVE DATE AND CONSTRUCTION Effective date and construction of act June 22, 1938, known as the Chandler Act, see note under section 1 of this title.

SUBCHAPTER XIII.-WHEN CHAPTER TAKES EFFECT

§ 1086. Proceedings to which chapter applies.

(1) On and after the effective date of this amendatory Act, this chapter shall apply to debtors and their creditors, whether their rights, claims, and interests of any nature whatsoever have been acquired or created before or after such date;

(2) a petition may be filed under this chapter in a proceeding in bankruptcy which is pending on the effective date of this amendatory Act;

(3) the provisions of sections 201 and 202 of this title shall continue in full force and effect with respect to proceedings pending under those sections upon the effective date of this amendatory Act;

(4) section 1079 of this title shall apply to compositions and extensions confirmed under section 202 of this title before the effective date of this amendatory Act and to compositions and extensions which may be confirmed under section 202 of this title on and after such effective date; and

(5) confirmation of a plan under this chapter shall not be refused because of a discharge granted or a composition confimed prior to the effective date of this amendatory Act. (July 1, 1898, ch. 541, § 686, as added June 22, 1938, ch. 575, § 1, 52 Stat. 938.)

CHANDLER ACT; EFFECTIVE DATE

Section 7 of act June 22, 1938, provided: "This amendstory Act shall take effect and be in force on and after three months from the date of its approval." Construction and operation of act June 22, 1938, see note under section 1 of this title.

Chapter 14.-MARITIME COMMISSION LIENS

Sec.

1101.

1102.

United States Maritime Commission as trustee or receiver; corporations operating vessels to foreign countries.

Continued operation of vessels; payment of operating loss.

1103. Injunction powers; United States as creditor under preferred ship mortgage.

§ 1101. United States Maritime Commission as trustee or receiver; corporations operating vessels to foreign countries.

Notwithstanding any provision of law, in any proceeding in a bankruptcy, equity, or admiralty court of the United States in which a receiver or trustee may be appointed for any corporation engaged in the operation of one or more vessels of United States registry between the United States and any foreign country, upon which the United States holds mortgages, the court upon finding that it will inure to the advantage of the estate and the parties in interest and that it will tend to further the purposes of the Merchant Marine Act, 1936, may constitute and appoint the United States Maritime Commission as sole trustee or receiver, subject to the directions and orders of the court, and in any such proceeding

the appointment of any person other than the Commission as trustee or receiver shall become effective upon the ratification thereof by the Commission without a hearing, unless the Commission shall deem a hearing necessary. In no such proceeding shall the Commission be constituted as trustee or receiver without its express consent. (July 1, 1898, ch. 541, § 701, as added June 22, 1938, ch. 575, § 1, 52 Stat. 938.)

REFERENCES IN TEXT

The Merchant Marine Act, 1936, referred to in the text, is contained in chapter 27 of Title 46, Shipping.

EFFECTIVE DATE AND CONSTRUCTION

Effective date and construction of act June 22, 1938. known as the Chandler Act, see note under section 1 of this title.

TRANSFER OF FUNCTIONS

Section 304 of 1961 Reorg. Plan No. 7, effective Aug. 12, 1961, 26 F.R. 7315, 75 Stat. 840, set out in the Appendix to Title 5, Government Organization and Employees, abolished the Federal Maritime Board, including the offices of the members of the Board. Functions of the Board were transferred either to the Federal Martime Commission or to the Secretary of Commerce by sections 103 and 202 of 1961 Reorg. Plan No. 7.

The United States Maritime Commission was abolished by 1950 Reorg. Plan No. 21, eff. May 24, 1950, 15 F. R. 3178, 64 Stat. 1273, set out in the Appendix to Title 5, Government Organization and Employees, which transferred part of its functions and part of the functions of its Chairman to the Federal Maritime Board and the Chairman thereof, such Board having been created by that Plan as an agency within the Department of Commerce with an independent status in some respects, and transferred the remainder of such Commission's functions and the functions of its Chairman to the Secretary of Commerce, with power vested in the Secretary to authorize their performance by the Maritime Administrator, the head of the Maritime Administration, which likewise was established by the Plan in the Department of Commerce with the provisions that the Chairman of said Federal Maritime Board should, ex officio, be such administrator. All executive and administrative functions of the Maritime Commission were transferred to the Chairman of the Maritime Commission by 1949 Reorg. Plan No. 6, eff. Aug. 20, 1949, 14 F.R. 5228, 63 Stat. 1069 set out in the Appendix to Title 5, Government Organization and Employees.

§ 1102. Continued operation of vessels; payment of operating loss.

If the court, in any such proceeding, is unwilling to permit the trustee or receiver to operate such vessels in such service pending the termination of such proceeding, without financial aid from the Government, and the Commission certifies to the court that the continued operation of such vessels is, in the opinion of the Commission, essential to the foreign commerce of the United States and is reasonably calculated to carry out the purposes and policy of the Merchant Marine Act, 1936, as amended, the court may permit the Commission to operate the vessels subject to the orders of the court and upon terms decreed by the court sufficient to protect all the parties in interest, for the account of the trustee or receiver, directly or through a managing agent or operator employed by the Commission, if the Commission undertakes to pay all operating losses resulting from such operation, and comply with the terms imposed by the court, and such vessel shall be considered to be a vessel of the United States within the meaning of the Suits in Admiralty Act. The Commission shall have no claim against the corporation, its

estate, or its assets for the amount of such payments, but the Commission may pay such sums for depreciation as it deems reasonable and such other sums as the court may deem just. The payment of such sums, and compliance with other terms duly imposed by the court, together with the payment of the operating losses, shall be in satisfaction of all claims against the Commission on account of the operation of such vessels. (July 1, 1898, ch. 541, § 702, as added June 22, 1938, ch. 575, § 1, 52 Stat. 939.)

REFERENCES IN TEXT

The Merchant Marine Act, 1936, and the Suits in Admiralty Act, both referred to in the text, are contained in chapters 27 and 20, respectively, of Title 46, Shipping. EFFECTIVE DATE AND CONSTRUCTION

Effective date and construction of act June 22, 1938, known as the Chandler Act, see note under section 1 of this title.

TRANSFER OF FUNCTIONS

Section 304 of 1961 Reorg. Plan No. 7, effective Aug. 12, 1961, 26 F.R. 7315, 75 Stat. 840, set out in the Appendix to Title 5, Government Organization and Employees, abolished the Federal Maritime Board, including the offices of the members of the Board. Functions of the Board were transferred either to the Federal Maritime Commission or to the Secretary of Commerce by sections 103 and 202 of 1961 Reorg. Plan No. 7.

The United States Maritime Commission was abolished by 1950 Reorg. No. 21 eff. May 24, 1950, 15 F.R. 3178, 64 Stat. 1273, set out in the Appendix to Title 5, Government Organization and Employees, which transferred part of its functions and part of the functions of its Chairman to the Federal Maritime Board and the Chairman thereof, such Board having been created by that Plan as an agency within the Department of Commerce with an independent status in some respects, and transferred the remainder of such Commission's functions and the functions of its Chairman to the Secretary of Commerce, with power vested in the Secretary to authorize their performance by the Maritime Administrator, the head of the Maritime Administration, which likewise was established by the Plan in the Department of Commerce with the provision that the Chairman of said Federal Maritime Board should, ex officio, be such administrator. All executive and administrative functions of the Maritime Commission were transferred to the Chairman of the Maritime Commission by 1949 Reorg. Plan No. 6, eff. Aug. 20, 1949, 14 F. R. 5228, 63 Stat. 1069, set out in the Appendix to Title 5, Government Organization and Employees.

§ 1103. Injunction powers; United States as creditor under preferred ship mortgage.

No injunction powers vested in the courts of bankruptcy under this title shall be construed or be deemed to affect or apply to the United States as a creditor under a preferred ship mortgage, as defined in the Ship Mortgage Act, 1920, as amended, unless the Commission files with the court a written waiver of the provisions of this section. (July 1, 1898, ch. 541, § 703, as added June 22, 1938, ch. 575, § 1, 52 Stat. 939.)

REFERENCES IN TEXT The Ship Mortgage Act, 1920, referred to in the text, is contained in chapter 25 of Title 46, Shipping.

EFFECTIVE DATE AND CONSTRUCTION Effective date and construction of act June 22, 1938, known as the Chandler Act, see note under section 1 of this title.

TRANSFER OF FUNCTIONS

Section 304 of 1961 Reorg. Plan No. 7, effective Aug. 12, 1961, 26 F.R. 7315, 75 Stat. 840, set out in the Appendix to Title 5, Government Organization and Employees, abolished the Federal Maritime Board, including the offices of

the members of the Board. Functions of the Board were transferred either to the Federal Maritime Commission or to the Secretary of Commerce by sections 103 and 202 of 1961 Reorg. Plan No. 7.

The United States Maritime Commission was abolished by 1950 Reorg. Plan No. 21, eff. May 24, 1950, 15 F. R. 3178, 64 Stat. 1273, set out in the Appendix to Title 5, Government Organization and Employees, which transferred part of its functions and part of the functions of its Chairman to the Federal Maritime Board and the Chairman thereof, such Board having been created by that Plan as an agency within the Department of Commerce with an independent status in some respects, and transferred the remainder of such Commission's functions and the functions of its Chairman to the Secretary of Commerce, with power vested in the Secretary to authorize their performance by the Maritime Administrator, the head of the Maritime Administration which likewise was established by the Plan in the Department of Commerce with the provision that the Chairman of said Federal Maritime Board should, ex officio, be such administrator.

All executive and administrative functions of the Maritime Commission were transferred to the Chairman of the Maritime Commission by 1949 Reorg. Plan No. 6, eff. Aug. 20, 1949, 14 F.R. 5228, 63 Stat. 1069, set out in the Appendix to Title 5, Government Organization and Employees.

Chapter 15.-RAILROAD ADJUSTMENTS

§§ 1200 to 1255. Jurisdiction; definitions; petitions; hearings; proceedings; etc.

TERMINATION OF CHAPTER

This chapter, chapter XV of the Bankruptcy Act of July 1, 1898, ch. 541, §§ 700—755, as added by act Oct. 16, 1942, ch. 610, 56 Stat. 787, terminated by its own provisions on Nov. 1, 1945, except with respect to proceedings initiated on or before that date.

A prior chapter 15 of this title, chapter XV of the Bankruptcy Act of July 1, 1898, ch. 541, §§ 700—755, as added by act July 28, 1939, ch. 393, 53 Stat. 1134, terminated by its own provisions on July 31, 1940, except with respect to proceedings initiated on or before that date.

Order

55. Proceedings under Chapter XIII of the Act [11 U. S. C. § 1001 et seq.].

56. Rules by Courts of Bankruptcy.

ESTABLISHMENT OF GENERAL ORDERS

The Supreme Court, under the Bankruptcy Act of 1898, promulgated thirty-eight General Orders by an order dated November 28, 1898, 18 Supreme Court IV, which provided in part that:

"In pursuance of the powers conferred by the Constitution and laws upon the Supreme Court of the United States, and particularly by the act of Congress approved July 1, 1898, entitled 'An act to establish a uniform system of bankruptcy throughout the United States [this title],' it is ordered, on this 28th day of November, 1898, that the following rules be adopted and established as general orders in bankruptcy, to take effect on the first Monday, being the second day, of January, 1899. And it is further ordered that all proceedings in bankruptcy had before that day, in accordance with the act last aforesaid, and being in substantial conformity either with the provisions of these general orders, or else with the general orders established by this court under the bankrupt act of 1867 and with any general rules or special orders of the courts in bankruptcy, stand good, subject, however, to such further regulation by rule or order of those courts as may be necessary or proper to carry into force and effect the bankrupt act of 1898 and the general orders of this court."

The Orders of the Supreme Court which promulgated, added, amended, or abrogated the General Orders and Forms in Bankruptcy are as follows:

1898-Nov. 28, 1898, 18 S. Ct. iv-xlviii, 172 U. S. 653— 723; 210 U. S. 567-585.

1905-Dec. 11, 1905, 37 S. Ct. iii, 210 U. S. 581, 582. 1915-Nov. 1, 1915, 36 S. Ct. vi.

1917-June 4, 1917, 37 S. Ct. 111.

1925-Apr. 13, 1925, 267 U. S. 613-616; May 25, 1925, 268 U. S. 712.

1930 Jan. 13, 1930, 280 U. S. 617. 1931-June 1, 1931, 283 U. S. 870.

1932-May 31, 1932, 52 S. Ct. xxxv, 286 U. S. 573. 1933-April 17, 1933, 53 S. Ct. xxxi-xxxvi, 288 U. S. 621— 636; April 24, 1933, 53 S. Ct. xxxvi-xliii, 288 U. S. 636-654; May 15, 1933, 53 S. Ct. xliii, 288 U. S. 655.

1935-May 13, 1935, 55 S. Ct. xl.

1936-Mar. 30, 1936, 56 S. Ct. xlv; June 1, 1936, 56 S. Ct. xlvii-liii, 298 U. S. 695-706.

1937-Apr. 5, 1937, 57 S. Ct. lix; Nov. 16, 1937, 58 S. Ct. cxxvi; Dec. 7, 1937. 58 S. Ct. cxxvi.

1938-Feb. 7, 1938, 58 S. Ct. cxxvi; Mar. 14, 1938, 58 S. Ct. cxxvii.

1939-Jan. 16, 1939, 59 S. Ct. clxxvii-ccxxxii, 305 U. S. 681-785.

1940-June 3, 1940. 60 S. Ct. clx. 1947-June 23, 1947, 67 S. Ct. clxvii.

1958 Mar. 3, 1958, 78 S. Ct. 19. 1961-May 29, 1961, 81 S. Ct. 26.

For additions, amendments and abrogations of specific orders, see Notes under particular Orders.

APPLICABILITY TO GUAM

Rules of bankruptcy practice promulgated under section 53 of this title as applicable to the District Court of Guam, see section 1424 of Title 48, Territories and Insular Possessions.