,,ii #aadth ,,congress #ast ,session ,s4 #ahda ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #bb1 #bjae ,mr4 ,cornyn 7for himself and ,mr4 ,toomey7 introduced the following bill2 which was read twice and referred to the ,committee on the ,judiciary ,a ,,bill ,to amend title #aa1 ,united ,states ,code1 to provide for the liquidation1 reorganization1 or recapitalization of a covered financial corporation1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,taxpayer ,protection and ,responsible ,resolution ,act4 #b4 ,general provisions relating to covered financial corporations 7a7 ,definition ,section #aja of title #aa1 ,united ,states ,code1 is amended by inserting the following after paragraph 7#i73 7#i;,a7 ,the term covered financial corporation means any corporation incorporated or organized under any ,federal or ,state law1 other than a stockbroker1 a commodity broker1 or an entity of the kind specified in paragraph 7#b7 or 7#c7 of section #aji7;b71 that is-- 7,a7 a bank holding company1 as defined in section #b7;a7 of the ,bank ,holding ,company ,act of #aief 7#ab ,u4,s4,c4 #ahda7;a772 or 7,b7 a corporation that exists for the primary purpose of owning1 controlling1 and financing subsidiaries that are predominantly engaged in activities that the ,board of ,governors of the ,federal ,reserve ,system has determined are financial in nature or incidental to such financial activity for purposes of section #d7k7 of the ,bank ,holding ,company ,act of #aief 7#ab ,u4,s4,c4 #ahdc7k774 4 7b7 ,applicability of chapters ,section #ajc of title #aa1 ,united ,states ,code1 is amended-- 7#a7 in subsection 7a7-- 7,a7 by striking section #aafa and inserting sections #aafa and #adja2 and 7,b7 by striking or #ac and inserting #ac1 or #ad2 7#b7 in subsection 7g71 by inserting subsection 7m7 and before section2 and 7#c7 by adding at the end the following3 7l7 ,chapter #ad of this title applies only in a case under such chapter4 7m7 ,except as otherwise provided in chapter #ad of this title1 chapter #aa of this title applies in a case under chapter #ad of this title4 4 7c7 ,who may be a debtor ,section #aji of title #aa1 ,united ,states ,code1 is amended-- 7#a7 in subsection 7d7-- 7,a7 by striking and2 7,b7 by striking or a and inserting or2 and 7,c7 by inserting 1 or a covered financial corporation after ,federal ,deposit ,insurance ,corporation ,improvement ,act of #aiia2 and 7#b7 by adding at the end the following3 7i7 ,only a covered financial corporation may be a debtor in a case under chapter #ad4 4 7d7 ,distribution of property of the estate ,section #gbf7;a77#a7 of title #aa1 ,united ,states ,code1 is amended by inserting in payment of any unpaid fees1 costs1 and expenses of a special trustee appointed under section #adjf1 and then after first14 7e7 ,confirmation of plan ,section #aabi7;a7 of title #aa1 ,united ,states ,code1 is amended by adding at the end the following3 7#ag7 ,in a case under chapter #ad1 all payable fees1 costs1 and expenses of the special trustee have been paid or the plan provides for the payment of all such fees1 costs1 and expenses1 as of the effective date of the plan4 7#ah7 ,in a case under chapter #ad1 confirmation of the plan is not likely to cause serious adverse effects on financial stability in the ,united ,states4 4 7f7 ,qualification of trustee ,section #cbb7;b77#b7 of title #aa1 ,united ,states ,code1 is amended by striking ,the and inserting ,in cases under chapter #ad1 the ,united ,states trustee shall recommend to the court1 and in all other cases1 the4 #c4 ,liquidation1 reorganization1 or recapitalization of a covered financial corporation 7a7 ,in general ,title #aa1 ,united ,states ,code1 is amended by inserting before chapter #ae the following3 #ad ,liquidation1 reorganization1 or recapitalization of a covered financial corporation ,sec4 #adja4 ,inapplicability of other sections4 #adjb4 ,definitions for this chapter4 #adjc4 ,commencement of a case concerning a covered financial corporation4 #adjd4 ,regulators4 #adje4 ,special transfer of property of the estate4 #adjf4 ,special trustee4 #adjg4 ,automatic stay2 assumed debt4 #adjh4 ,treatment of qualified financial contracts and affiliate contracts4 #adji4 ,licenses1 permits1 and registrations4#adaj4 ,conversion to chapter #g4 #adaa4 ,exemption from securities laws4 #adab4 ,inapplicability of certain avoiding powers4 #adac4 ,consideration of financial stability4 #adja4 ,inapplicability of other sections ,sections #cjc and #cba7;c7 do not apply in a case under this chapter4 #adjb4 ,definitions for this chapter ,in this chapter1 the following definitions shall apply3 7#a7 ,the term ,board means the ,board of ,governors of the ,federal ,reserve ,system4 7#b7 ,the term bridge company means a newly formed corporation to which property of the estate may be transferred under section #adje7;a7 and the equity securities of which may be transferred to a special trustee under section #adjf7;a74 7#c7 ,the term capital structure debt means all unsecured debt of the debtor for borrowed money for which the debtor is the primary obligor1 other than a qualified financial contract and other than debt secured by a lien on property of the estate that is to be transferred to a bridge company pursuant to an order of the court under section #adje7;a74 7#d7 ,the term contractual right means a contractual right of a kind described in section #eee1 #eef1 #eei1 #efj1 or #efa4 7#e7 ,the term qualified financial contract means any contract of a kind defined in paragraph 7#be71 7#ch;,a71 7#dg71 or 7#ec;,b7 of section #aja1 section #gda7g71 or paragraph 7#d71 7#e71 7#aa71 or 7#ac7 of section #gfa4 7#f7 ,the term special trustee means a trustee appointed under section #adjf7;a77#b77;,a74 7#g7 ,the term trustee means a person who is-- 7,a7 appointed or elected under section #aajd2 and 7,b7 qualified under section #cbb to serve as trustee in the case or1 in the absence of such person1 the debtor in possession4 #adjc4 ,commencement of a case concerning a covered financial corporation 7a7 ,in general ,a case under this chapter may be commenced by the filing of a petition with the court by an entity that may be a debtor under section #cja if the entity states to the best of its knowledge1 under penalty of perjury1 in the petition that the entity is a covered financial corporation4 7b7 ,order for relief ,the commencement of a case under subsection 7a7 constitutes an order for relief under this chapter4 7c7 ,liability ,the members of the board of directors 7or body performing similar functions7 of a covered financial corporation shall not be liable to shareholders1 creditors or other parties in interest for-- 7#a7 a good faith filing of a case under this chapter2 or 7#b7 for any reasonable action taken1 before or after the date on which a case is commenced under this chapter1 in good faith in contemplation of or in connection with such a filing or a transfer under section #adje or section #adjf4 7d7 ,notice to court ,counsel to the entity that may be a debtor shall provide1 to the greatest extent practicable1 sufficient confidential notice to the ,director of the ,administrative ,office of the ,united ,states ,courts and the chief judge of the court of appeals embracing the district in which the case is pending regarding the potential commencement of a case under this chapter without disclosing the identity of the potential debtor to allow the ,director and chief judge to designate and ensure the ready availability of #a of the bankruptcy judges designated under section #bih7;b77#a7 of title #bh to be available to preside over the case4 #adjd4 ,regulators ,the ,board1 the ,securities and ,exchange ,commission1 the ,comptroller of the ,currency1 and the ,federal ,deposit ,insurance ,corporation may raise and may appear and be heard on any issue in any case or proceeding under this chapter4 #adje4 ,special transfer of property of the estate 7a7 ,in general 7#a7 ,transfer ,on request of the trustee1 and after notice and hearing not less than #bd hours after the order for relief1 the court may order a transfer under this section of property of the estate1 and the assignment of debt1 executory contracts1 unexpired leases1 qualified financial contracts1 and agreements of the debtor1 to a bridge company4 ,except as provided under this section1 the provisions of sections #cfc and #cfe shall apply to a transfer and assignment under this section4 7#b7 ,property of estate ,upon the entry of an order approving a transfer under this section1 any property transferred1 and any debt1 executory contract1 unexpired leases1 qualified financial contract1 or agreement assigned under such order shall no longer be property of the estate4 7b7 ,notice ,unless the court orders otherwise1 notice of a request for an order under subsection 7a7 shall consist of electronic or telephonic notice of not less than #bd hours to-- 7#a7 the holders of the #bj largest secured claims against the debtor2 7#b7 the holders of the #bj largest unsecured claims against the debtor2 7#c7 counterparties to any debt1 executory contract1 unexpired lease1 qualified financial contract1 or agreement requested to be transferred under this section2 7#d7 the ,board2 7#e7 the ,federal ,deposit ,insurance ,corporation2 7#f7 the ,secretary of the ,treasury2 7#g7 the ,comptroller of the ,currency2 7#h7 the ,securities and ,exchange ,commission2 7#i7 the ,united ,states trustee or bankruptcy administrator2 and 7#aj7 each primary financial regulatory agency 7as defined in section #b7ab7 of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#ab ,u4,s4,c4 #ecja7ab777 with respect to any affiliate the equity securities of which are proposed to be transferred under this section4 7c7 ,determination ,the court may not order a transfer under this section unless the court determines1 based upon a preponderance of the evidence1 that-- 7#a7 the transfer under this section is necessary to prevent serious adverse effects on financial stability in the ,united ,states2 7#b7 the transfer does not provide for the assumption of any capital structure debt by the bridge company2 7#c7 the transfer does not provide for the transfer to the bridge company of any property of the estate that is subject to a lien securing a debt1 executory contract1 unexpired lease1 or agreement of the debtor unless-- 7,a7 7i7 the bridge company assumes such debt1 executory contract1 unexpired lease1 or agreement1 including any claims arising in respect thereof that would not be allowed secured claims under section #ejf7;a77#a71 and after giving effect to such transfer1 such property remains subject to the lien securing such debt1 executory contract1 unexpired lease1 or agreement2 and 7ii7 the court has determined that assumption of such debt1 executory contract1 unexpired lease1 or agreement by the bridge company is in the best interest of the estate2 or 7,b7 such property is being transferred to the bridge company in accordance with the provisions of section #cfc2 7#d7 the transfer does not provide for the assumption by the bridge company of any debt1 executory contract1 unexpired lease1 or agreement of the debtor secured by a lien on property in which the estate has an interest unless the transfer provides for such property to be transferred to the bridge company in accordance with paragraph 7#c77;,a7 of this subsection2 7#e7 the transfer does not provide for the transfer of the equity of the debtor2 7#f7 the debtor has demonstrated that the bridge company is not likely to fail to meet the obligations of any debt1 executory contract1 qualified financial contract1 unexpired lease1 or other agreement assumed and assigned to the bridge company2 7#g7 the transfer provides for the transfer to a special trustee all of the equity securities in the bridge company and appointment of a special trustee in accordance with section #adjf2 7#h7 after giving effect to the transfer1 adequate provision has been made for the payment of the fees1 costs1 and expenses of the estate and special trustee2 and 7#i7 the bridge company will have governing documents1 and initial directors and senior officers1 that are in the best interest of creditors and the estate4 7d7 ,requirements before transfer ,immediately before a transfer under this section1 the bridge company that is the recipient of the transfer shall-- 7#a7 not have any property1 debts1 executory contracts1 unexpired leases1 qualified financial contracts1 or agreements1 other than any property acquired or debts1 executory contracts1 unexpired leases1 qualified financial contracts1 or agreements assumed when acting as a transferee of a transfer under this section2 and 7#b7 have equity securities that are property of the estate1 which may be sold or distributed in accordance with this title4 #adjf4 ,special trustee 7a7 ,in general 7#a7 ,transfer to special trustee ,an order approving a transfer under section #adje shall require the trustee to transfer to a special trustee all of the equity securities in the bridge company that is the recipient of a transfer under section #adje to hold in trust for the sole benefit of the estate subject to satisfaction of the special trustee's fees1 costs1 and expenses4 ,the trust of which the special trustee is the trustee shall be a newly formed trust governed by a trust agreement approved by the court as in the best interests of the estate1 and shall exist for the sole purpose of holding and administering1 and shall be permitted to dispose of1 the equity securities of the bridge company in accordance with the trust agreement4 7#b7 ,appointment of special trustee 7,a7 ,in general ,a special trustee shall be qualified and independent and shall be appointed by the court4 7,b7 ,proposal by trustee ,in connection with the hearing to approve a transfer under section #adje1 the trustee may propose to the court a person to serve as special trustee1 if the trustee confirms to the court that the ,board has been consulted regarding the identity of the proposed special trustee and advises the court of the results of such consultation4 7b7 ,trust agreement ,the trust agreement governing a trust formed under subsection 7a77#a7 shall provide-- 7#a7 for the payment of the fees1 costs1 expenses1 and indemnities of the special trustee from the assets of the debtor's estate2 7#b7 that the special trustee provide-- 7,a7 quarterly reporting to the estate1 which shall be filed with the court2 and 7,b7 information about the bridge company reasonably requested by a party in interest to prepare a disclosure statement for a plan providing for distribution of any securities of the bridge company if such information is necessary to prepare such disclosure statement2 7#c7 that for as long as the equity securities of the bridge company are held by the trust1 the special trustee shall file a notice with the court in connection with-- 7,a7 any change in a director or senior officer of the bridge company2 7,b7 any modification to the governing documents of the bridge company2 or 7,c7 any material corporate action of the bridge company1 including-- 7i7 recapitalization2 7ii7 a material borrowing2 7iii7 termination of an intercompany debt or guarantee2 7iv7 a transfer of a substantial portion of the assets of the bridge company2 or 7v7 the issuance or sale of any securities of the bridge company2 7#d7 that any sale of any equity securities of the bridge company shall not be consummated until the special trustee consults with the ,federal ,deposit ,insurance ,corporation and the ,board regarding such sale and discloses the results of such consultation with the court2 7#e7 that1 subject to reserves for payments permitted under paragraph 7#a7 provided for in the trust agreement1 the proceeds of the sale of any equity securities of the bridge company by the special trustee be held in trust for the benefit of or transferred to the estate2 7#f7 the process and guidelines for the replacement of the special trustee2 and 7#g7 that the property held in trust by the special trustee is subject to distribution in accordance with subsection 7c74 7c7 ,distribution of assets held in trust 7#a7 ,in general ,the special trustee shall distribute the assets held in trust-- 7,a7 if the court confirms a plan in the case1 in accordance with the plan on the effective date of the plan2 or 7,b7 if the case is converted to a case under chapter #g under section #adaj4 7#b7 ,termination ,as soon as practicable after a final distribution under paragraph 7#a71 the office of the special trustee shall terminate1 except as may be necessary to wind up and conclude the business and financial affairs of the trust4 7d7 ,applicability ,after a transfer to the special trustee under this section1 the special trustee shall be subject only to applicable nonbankruptcy law1 and the actions and conduct of the special trustee shall no longer be subject to approval by the court in the case under this chapter4 #adjg4 ,automatic stay2 assumption 7a7 ,automatic stay 7#a7 ,in general ,a petition filed under section #adjc operates as a stay1 applicable to all entities1 of the acceleration1 termination1 or modification of any debt1 contract1 lease1 or agreement of the kind described in paragraph 7#b71 or of any right or obligation under any such debt1 contract1 lease1 or agreement1 solely because of-- 7,a7 a default by the debtor under any such debt1 contract1 lease1 or agreement2 or 7,b7 a provision in such debt1 contract1 lease1 or agreement1 or in applicable nonbankruptcy law1 that is conditioned on-- 7i7 the insolvency or financial condition of the debtor at any time before the closing of the case2 7ii7 the commencement of a case under this title concerning the debtor2 7iii7 the appointment of or taking possession by a trustee in a case under this title concerning the debtor or by a custodian before the commencement of the case2 or 7iv7 a credit rating agency rating1 or absence or withdrawal of a credit rating agency rating of-- 7,i7 the debtor at any time after the commencement of the case2 7,,ii7 an affiliate during the #dh hours after the commencement of the case2 7,,iii7 the bridge company while the trustee or the special trustee is a direct or indirect beneficial holder of more than #ej percent of the equity securities of-- 7aa7 the bridge company2 or 7bb7 an affiliate1 if all of the direct or indirect interests in the affiliate that are property of the estate are transferred under section #adjf2 or 7,,iv7 an affiliate while the trustee or the special trustee is a direct or indirect beneficial holder of more than #ej percent of the equity securities of-- 7aa7 the bridge company2 or 7bb7 the affiliate1 if all of the direct or indirect interests in the affiliate that are property of the estate are transferred under section #adje4 7#b7 ,debt1 contract1 lease1 or agreement ,a debt1 contract1 lease1 or agreement described in this paragraph-- 7,a7 is-- 7i7 any debt1 executory contract1 or unexpired lease of the debtor2 7ii7 any agreement under which the debtor issued or is obligated for debt2 7iii7 any debt1 executory contract1 or unexpired lease of an affiliate2 and 7iv7 any agreement under which an affiliate issued or is obligated for debt2 and 7,b7 does not include capital structure debt or qualified financial contracts4 7#c7 ,termination of stay ,a stay under this subsection terminates-- 7,a7 as to the debtor1 upon the earliest of-- 7i7 #dh hours after the commencement of the case2 7ii7 assumption of the debt1 contract1 lease1 or agreement by the bridge company under an order authorizing a transfer under section #adje2 7iii7 a final order of the court denying the request for a transfer of the debt1 contract1 lease1 or agreement under section #adje2 or 7iv7 the time the case is dismissed2 and 7,b7 as to an affiliate1 upon the earliest of-- 7i7 #dh hours after the commencement of the case1 if the court has not ordered a transfer under section #adje2 7ii7 the entry of an order authorizing a transfer under section #adje in which the direct or indirect interests in the affiliate that are property of the estate are not transferred under section #adje2 7iii7 a final order of the court denying the request for a transfer under section #adje2 or 7iv7 the time the case is dismissed4 7#d7 ,applicability ,sections 7d71 7e71 7f71 and 7g7 of section #cfb apply to a stay under this subsection4 7b7 ,assumption by bridge company ,a debt1 executory contract1 unexpired lease of the debtor1 or any other agreement described in subsection 7a77#b71 may be assumed by a bridge company in a transfer under section #adje notwithstanding any provision in an agreement or in applicable nonbankruptcy law that-- 7#a7 prohibits1 restricts1 or conditions the assignment of the debt1 contract1 lease1 or agreement2 or 7#b7 accelerates1 terminates1 or modifies1 or permits a party other than the debtor to accelerate1 terminate1 or modify1 the debt1 contract1 lease1 or agreement on account of-- 7,a7 the assignment of the debt1 contract1 lease1 or agreement2 or 7,b7 a change in control of any party to the debt1 contract1 lease1 or agreement4 7c7 ,no acceleration1 termination1 or modification of agreements of debtor 7#a7 ,in general ,a debt1 contract1 lease1 or agreement of the kind described in subsection 7a77#b7 may not be accelerated1 terminated1 or modified1 and any right or obligation under such debt1 contract1 lease1 or agreement may not be accelerated1 terminated1 or modified1 as to the bridge company solely because of a provision in the debt1 contract1 lease1 or agreement or in applicable nonbankruptcy law-- 7,a7 of the kind described in subsection 7a77#a77;,b7 as applied to the debtor2 7,b7 that prohibits1 restricts1 or conditions the assignment of the debt1 contract1 lease1 or agreement2 or 7,c7 that accelerates1 terminates1 or modifies1 or permits a party other than the debtor to accelerate1 terminate1 or modify1 the debt1 contract1 lease or agreement1 on account of-- 7i7 the assignment of the debt1 contract1 lease1 or agreement2 or 7ii7 a change in control of any party to the debt1 contract1 lease1 or agreement4 7#b7 ,default ,if there has been a default by the debtor under a provision other than the kind described in paragraph 7#a7 in a debt1 contract1 lease1 or agreement of the kind described in subsection 7a77#b71 the bridge company may assume such debt1 contract1 lease1 or agreement only if the bridge company-- 7,a7 cures1 or provides adequate assurance in connection with a transfer under section #adje that the bridge company will promptly cure1 the default2 7,b7 compensates1 or provides adequate assurance in connection with a transfer under section #adje that the bridge company will promptly compensate1 a party other than the debtor to the debt1 contract1 lease1 or agreement1 for any actual pecuniary loss to the party resulting from the default2 and 7,c7 provides adequate assurance in connection with a transfer under section #adje of future performance under the debt1 contract1 lease1 or agreement1 as determined by the court under section #adje7;c77#d74 #adjh4 ,treatment of qualified financial contracts and affiliate contracts 7a7 ,in general ,notwithstanding sections #cfb7;b77#f71 #cfb7;b77#g71 #cfb7;b77#ag71 #cfb7;b77#bg71 #cfb7o71 #eee1 #eef1 #eei1 #efj1 and #efa1 a petition filed under section #adjc operates as a stay1 during the period specified in section #adjg7;a77#c77;,a71 applicable to all entities1 of the exercise of a contractual right-- 7#a7 to cause the acceleration1 termination1 modification1 or liquidation of a qualified financial contract of the debtor or an affiliate2 7#b7 to offset or net out any termination value1 payment amount1 or other transfer obligation arising under or in connection with a qualified financial contract of the debtor or an affiliate2 or 7#c7 under any security agreement or arrangement or other credit enhancement forming a part of or related to a qualified financial contract of the debtor or an affiliate4 7b7 ,payment and delivery obligations 7#a7 ,in general ,during the period specified in section #adjg7;a77#c77;,a71 the trustee or the affiliate shall perform all payment and delivery obligations under a qualified financial contract of the debtor or the affiliate1 as the case may be1 that become due after the commencement of the case4 ,the stay provided under subsection 7a7 terminates as to a qualified financial contract of the debtor or an affiliate immediately upon the failure of the trustee or the affiliate1 as the case may be1 to perform any such obligation during such period4 7#b7 ,failure to perform ,any failure by a counterparty to any qualified financial contract of the debtor or any affiliate to perform any payment or delivery obligation under such qualified financial contract1 including during the pendency of the stay provided under subsection 7a71 shall constitute a breach of such qualified financial contract by the counterparty4 7c7 ,assignment or assumption ,notwithstanding any provision of subsection #adjg7;b7 or applicable nonbankruptcy law1 subject to the court's approval1 a qualified financial contract between an entity and the debtor may be assigned to or assumed by the bridge company in a transfer under section #adje only if-- 7#a7 all qualified financial contracts between the entity and the debtor are assigned to and assumed by the bridge company in the transfer under section #adje2 7#b7 all claims of the entity against the debtor under any qualified financial contract between the entity and the debtor 7other than any claim that1 under the terms of the qualified financial contract1 is subordinated to the claims of general unsecured creditors7 are assigned to and assumed by the bridge company2 7#c7 all claims of the debtor against the entity under any qualified financial contract between the entity and the debtor are assigned to and assumed by the bridge company2 and 7#d7 all property securing or any other credit enhancement furnished by the debtor for any qualified financial contract described in paragraph 7#a7 or any claim described in paragraph 7#b7 or 7#c7 under any qualified financial contract between the entity and the debtor is assigned to and assumed by the bridge company4 7d7 ,no acceleration1 termination1 or modification of qualified financial contracts ,notwithstanding any provision of a qualified financial contract or of applicable nonbankruptcy law1 a qualified financial contract of the debtor that is assumed by or assigned to the bridge company in a transfer under section #adje may not be accelerated1 terminated1 modified1 or liquidated after the entry of the order approving a transfer under section #adje1 and any right or obligation under the qualified financial contract may not be accelerated1 terminated1 or modified1 after the entry of the order approving a transfer under section #adje solely because of a provision of the kind described in section #adjg7;c77#a71 other than a provision of the kind described in section #adjg7;b7 that occurs after property of the estate no longer includes a direct beneficial interest or an indirect beneficial interest through the special trustee1 in more than #ej percent of the equity securities of the bridge company4 7e7 ,no acceleration1 termination1 modification1 or liquidation of agreements of affiliates ,notwithstanding any provision in any agreement or in applicable nonbankruptcy law1 an agreement 7including an executory contract1 unexpired lease1 qualified financial contract1 or an agreement under which the affiliate issued or is obligated for debt7 of an affiliate that is assumed by or assigned to the bridge company in a transfer under section #adje1 and any right or obligation under such agreement1 may not be accelerated1 terminated1 modified1 or liquidated after the entry of the order approving a transfer under section #adje solely because of a provision of the kind described in section #adjg7;c77#a71 other than a provision of the kind described in section #adjg7;b7 that occurs after the bridge company is no longer a direct or indirect beneficial holder of more than #ej percent of the equity securities of the affiliate at any time after the commencement of the case if-- 7#a7 all direct or indirect interests in the affiliate that are property of the estate are transferred under section #adje to the bridge company within the period specified in subsection 7a72 7#b7 the bridge company assumes-- 7,a7 any guarantee or other credit enhancement issued by the debtor relating to the agreement of the affiliate2 and 7,b7 any right of setoff1 netting arrangement1 or debt of the debtor that directly arises out of or directly relates to the guarantee or credit enhancement2 and 7#c7 any property of the estate that directly serves as collateral for the guarantee or credit enhancement is transferred to the bridge company4 #adji4 ,licenses1 permits1 and registrations 7a7 ,in general ,notwithstanding any otherwise applicable nonbankruptcy law1 if a request is made under section #adje for a transfer of property of the estate1 any ,federal1 ,state1 or local license1 permit1 or registration that the debtor or an affiliate had immediately before the commencement of the case and that is proposed to be transferred under section #adje may not be accelerated1 terminated1 or modified at any time after the request solely on account of-- 7#a7 the insolvency or financial condition of the debtor at any time before the closing of the case2 7#b7 the commencement of a case under this title concerning the debtor2 7#c7 the appointment of or taking possession by a trustee in a case under this title concerning the debtor or by a custodian before the commencement of the case2 or 7#d7 a transfer under section #adje4 7b7 ,validity of certain licenses1 permits1 and registrations ,notwithstanding any otherwise applicable nonbankruptcy law1 any ,federal1 ,state1 or local license1 permit1 or registration that the debtor had immediately before the commencement of the case that is included in a transfer under section #adje shall be valid and all rights and obligations thereunder shall vest in the bridge company4 #adaj4 ,conversion to chapter #g ,notwithstanding section #aji7;b71 a court may convert a case under this chapter to a case under chapter #g if-- 7#a7 a transfer described in section #adje has taken place2 7#b7 the court has ordered the appointment of a special trustee under section #adjf2 and 7#c7 the court finds1 after providing notice and conducting a hearing1 that the conversion of the case is in the best interests of the creditors and the estate4 #adaa4 ,exemption from securities laws ,for purposes of section #aade1 a security of the bridge company shall be deemed to be a security of a successor to the debtor under a plan if the court approves the disclosure statement for the plan as providing adequate information 7as defined in section #aabe7;a77 about the bridge company and the security4 #adab4 ,inapplicability of certain avoiding powers ,a transfer made or an obligation incurred by the debtor to an affiliate prior to or after the commencement of the case1 including any obligation released by the debtor or the estate to or for the benefit of an affiliate1 in contemplation of or in connection with a transfer under section #adje1 is not avoidable under section #edd1 #edg1 #edh7;a77#a77;,b71 or #edi1 or under any similar nonbankruptcy law4 #adac4 ,consideration of financial stability ,the court may consider the effect that any decision in connection with this chapter may have on financial stability in the ,united ,states4 4 7b7 ,technical and conforming amendment ,the table of chapters for title #aa1 ,united ,states ,code1 is amended by inserting after the item relating to chapter #ac the following3 #ad4 ,liquidation1 reorganization1 or recapitalization of a covered financial corporation#adja 4 #d4 ,amendments to title #bh1 ,united ,states ,code 7a7 ,amendment to chapter #ac ,chapter #ac of title #bh1 ,united ,states ,code1 is amended by adding at the end the following3 #bih4 ,judge for a case under chapter #ad of title #aa 7a7 ,notwithstanding section #bie1 the ,chief ,justice of the ,united ,states shall designate not fewer than #aj bankruptcy judges to be available to hear a case under chapter #ad of title #aa4 ,bankruptcy judges may request to be considered by the ,chief ,justice of the ,united ,states for such designation4 7b7 7#a7 ,notwithstanding section #aee1 a case under chapter #ad of title #aa shall be heard under section #aeg by a bankruptcy judge designated under subsection 7a71 who shall be assigned to hear such case by the chief judge of the court of appeals for the circuit embracing the district in which the case is pending4 7#b7 ,if the bankruptcy judge assigned to hear a case under paragraph 7#a7 is not assigned to the district in which the case is pending1 the bankruptcy judge shall be temporarily assigned to the district4 ,to the greatest extent practicable1 the approvals required under section #aee7;a7 shall be obtained4 7c7 ,a case under chapter #ad of title #aa1 and all proceedings in the case1 shall take place in the district in which the case is pending4 4 7b7 ,amendment to section #accd ,section #accd of title #bh1 ,united ,states ,code1 is amended by adding at the end the following3 7f7 ,this section does not grant jurisdiction to the district court after a transfer pursuant to an order under section #adje of title #aa of any proceeding related to a special trustee appointed1 or to a bridge company formed to accomplish a transfer1 under section #adje of title #aa4 4 7c7 ,technical and conforming amendment ,the table of sections for chapter #ac of title #bh1 ,united ,states ,code1 is amended by adding at the end the following3 #bih4 ,judge for a case under chapter #ad of title #aa4 4 #e4 ,limitation on use of ,federal funds ,notwithstanding any other provision of law1 no funds appropriated to the ,federal ,government may be paid to a covered financial corporation 7as defined in section #aja7i;,a7 of title #aa1 ,united ,states ,code1 as amended by section #b7;a7 of this ,act71 or to a creditor of any covered financial corporation1 to satisfy a claim in a case under chapter #ad of title #aa1 ,united ,states ,code4