The Professional
Bankruptcy Dictionary


CLICK ON A LETTER ABOVE

A

abandonment

the act of a trustee relinquishing possession and control of property out of the estate and back to the debtor

Sec. 554

absolute priority rule

in a Chapter 11 case the rule that no junior class of claims or interests may receive anything of value from the estate unless a more senior nonaccepting class of unsecured claims or interests is paid in full.

11 U.S.C. § 1129(b)(2)(B) and (C)

abstention

a bankruptcy court's refusal to take up a matter out of deference to another court with jurisdiction.

§ 305; 28 U.S.C. § 1334(c)

accountant

means accountant authorized under applicable law to practice public accounting, and includes professional accounting association, corporation, or partnership, if so authorized.

Sec. 101. Definitions

Act

means Commodity Exchange Act;

Sec. 761. Definitions for this subchapter

action or civil action

means an adversary proceeding or, when appropriate, a contested petition, or proceedings to vacate an order for relief or to determine any other contested matter.

Rule 9002.

adequate protection

security, collateral or some other measure undertaken or provided by the debtor in bankruptcy, to protect a claim holder from depreciation of its collateral pending confirmation of a plan, for the period during which the debtor has continued possession or use of the collateral.

Sec. 361; Lundin, Hon. Keith M., Chapter 13 Bankruptcy (Bankruptcy Press)

administrative expenses

actual, necessary costs and expenses of preserving the estate, including wages, salaries, or commissions for services rendered after the order for relief, and any taxes on, measured by, or withheld from such wages, salaries, or commissions.

Sec. 503, Notes of Committee on the Judiciary

adversary matter

a dispute in a bankruptcy proceeding that may be adjudicated by means of an adversary proceeding (lawsuit) filed in bankruptcy court.

Rule 7001

affiliate

means -

(A) entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than an entity that holds such securities -

(i) in a fiduciary or agency capacity without sole discretionary power to vote such securities; or

(ii) solely to secure a debt, if such entity has not in fact exercised such power to vote;

(B) corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by the debtor, or by an entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than an entity that holds such securities -

(i) in a fiduciary or agency capacity without sole discretionary power to vote such securities; or

(ii) solely to secure a debt, if such entity has not in fact exercised such power to vote;

(C) person whose business is operated under a lease or operating agreement by a debtor, or person substantially all of whose property is operated under an operating agreement with the debtor; or

(D) entity that operates the business or substantially all of the property of the debtor under a lease or operating agreement;

Sec. 101. Definitions

after notice and a hearing, or a similar phrase -

(A) means after such notice as is appropriate in the particular circumstances, and such opportunity for a hearing as is appropriate in the particular circumstances; but

(B) authorizes an act without an actual hearing if such notice is given properly and if -

(i) such a hearing is not requested timely by a party in interest; or

(ii) there is insufficient time for a hearing to be commenced before such act must be done, and the court authorizes such act;

Sec. 102. Rules of construction

allowed claim

a claim or debt deemed allowed in a bankruptcy case pursuant to sec. 502; an allowed secured claim pursuant to sec. 506.

antecedent debt

a debt that is accrued or acquired prior to the debtor making a payment to the creditor on account of the debts

anti-alienation clause

a term or provision of a trust that forbits transfer of the debtor's beneficial interest in the trust to another.

§ 541(c)(2)

appeal

means an appeal as provided by 28 U.S.C. § 158.

Rule 9002.

assignment

a transfer of a right or property and duties in connection with a contract, to another

§ 365

assumption

a debtor or the estate may assume or reject a lease or executory contract; the act of continuing to be responsible for the lease or contract

§ 365

attorney

means attorney, professional law association, corporation, or partnership, authorized under applicable law to practice law;

Sec. 101. Definitions

automatic stay

a restraining order arising out of the filing of a bankruptcy case. The filing of a petition "automatically stays" most actions against the debtor or the debtor's property. 11 U.S.C. § 362. This stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally cannot initiate or continue any lawsuits, wage garnishments, or even telephone calls demanding payments. Creditors normally receive notice of the filing of the petition from the clerk.

Public Information Series of the Bankruptcy Judges Division

avoidance of lien

the act of obtaining a release from the effect of a lien, judgment or security interest in property, typically in connection with exempt property but also on any grounds provided by the Bankruptcy Code

§ 522(f); 544, 553

avoidance powers

the trustee's or debtor's powers to avoid a lien