Sierra Madre Bankruptcy Attorney, Bankruptcy Lawyer, Bankruptcy Code 11 USC Section 725

TITLE 11 - BANKRUPTCY
CHAPTER 7 - LIQUIDATION
    SUBCHAPTER II - COLLECTION, LIQUIDATION, AND DISTRIBUTION OF THE
                     ESTATE                    

-HEAD-
    Sec. 725. Disposition of certain property

-STATUTE-
      After the commencement of a case under this chapter, but before
    final distribution of property of the estate under section 726 of
    this title, the trustee, after notice and a hearing, shall dispose
    of any property in which an entity other than the estate has an
    interest, such as a lien, and that has not been disposed of under
    another section of this title.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2607; Pub. L. 98-353, title
    III, Sec. 478, July 10, 1984, 98 Stat. 381.)


                       HISTORICAL AND REVISION NOTES                   

                          LEGISLATIVE STATEMENTS                      
      Section 725 of the House amendment adopts the substance contained
    in both the House bill and Senate amendment but transfers an
    administrative function to the trustee in accordance with the
    general thrust of this legislation to separate the administrative
    and the judicial functions where appropriate.

                         SENATE REPORT NO. 95-989                     
      This section requires the court to determine the appropriate
    disposition of property in which the estate and an entity other
    than the estate have an interest. It would apply, for example, to
    property subject to a lien or property co-owned by the estate and
    another entity. The court must make the determination with respect
    to property that is not disposed of under another section of the
    bankruptcy code, such as by abandonment under section 554, by sale
    or distribution under 363, or by allowing foreclosure by a secured
    creditor by lifting the stay under section 362. The purpose of the
    section is to give the court appropriate authority to ensure that
    collateral or its proceeds is returned to the proper secured
    creditor, that consigned or bailed goods are returned to the
    consignor or bailor and so on. Current law is curiously silent on
    this point, though case law has grown to fill the void. The section
    is in lieu of a section that would direct a certain distribution to
    secured creditors. It gives the court greater flexibility to meet
    the circumstances, and it is broader, permitting disposition of
    property subject to a co-ownership interest.

                                AMENDMENTS                            
      1984 - Pub. L. 98-353 substituted "distribution of property of
    the estate" for "distribution".

                     EFFECTIVE DATE OF 1984 AMENDMENT                 
      Amendment by Pub. L. 98-353 effective with respect to cases filed
    90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353,
    set out as a note under section 101 of this title.

-End-
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