The Professional
Bankruptcy Dictionary


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N

National Bankruptcy Review Commission

An entity created by the Bankruptcy Reform Act of 1994 and given the assignment of conducting, over a period of two years, a thorough study of the existing bankruptcy law and report back to Congress on recommended changes to the Code and Rules. Included public hearings across the country. The report, lodged with Congress according to schedule, has been largely ignored.

net equity

means, with respect to all accounts of a customer that such customer has in the same capacity -

(A)

(i) aggregate dollar balance that would remain in such accounts after the liquidation, by sale or purchase, at the time of the filing of the petition, of all securities positions in all such accounts, except any customer name securities of such customer; minus

(ii) any claim of the debtor against such customer in such capacity that would have been owing immediately after such liquidation; plus

(B) any payment by such customer to the trustee, within 60 days after notice under section 342 of this title, of any business related claim of the debtor against such customer in such capacity;

Sec. 741. Definitions for this subchapter

“new debtor” syndrome

A practice whereby a company in trouble transfers a parcel of “distressed” real property that is on the eve of foreclosure, to a new corporation, then puts the new corporation into chapter 11 to halt the foreclosure.

new value exception

In Chapter 11 cases, an exception to the absolute priority rule that enables equity holders to retain their interests in the debtor, even though a senior non-accepting class has not been paid in full, if the equity holders contribute new capital to the debtor equal to or greater than the value of their interests.

Blum, Bankruptcy And Debtor/Creditor, Aspen 1999

no-asset case

a Chapter 7 case where there are no assets available to satisfy any portion of the creditor's unsecured claims; a case in which all of the debtor's property is "exempt.”

List of Terms: Administrative Office of the United States Courts

nol

Net operating loss

non-dischargeable debt

a debt that may not be discharged under one or more chapters of the Bankruptcy Code

nonexempt property

nonexempt property is property that the debtor owns free and clear of liens and the debtor's property which has market value above the amount of any security interest or lien and any exemption that the debtor holds in the property.

Public Information Series of the Bankruptcy Judges Division

nonrecourse secured debt

A secured debt for which the debtor has no liabilitiy beyond the value of the collateral, so that the debtor cannot be held responsible for any deficiency following foreclosure

Blum, Bankruptcy And Debtor/Creditor, Aspen 1999

notice and a hearing

if required by the Bankruptcy Code, notice of a proposed order and notice of an opportunity to be heard (i.e., an opportunity to request a hearing to object to the proposed action).

11 U.S.C. § 102(1)