2019 US Code
Title 11 - Bankruptcy
Chapter 7 - Liquidation
Subchapter II - Collection, Liquidation, and Distribution of the Estate
Sec. 725 - Disposition of certain property

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Citation 11 U.S.C. § 725 (2019)
Section Name §725. Disposition of certain property
Section Text

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 Credit

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

Editorial Notes 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.

Publication Title United States Code, 2018 Edition, Supplement 1, Title 11 - BANKRUPTCY
Category Bills and Statutes
Collection United States Code
SuDoc Class Number Y 1.2/5:
Contained Within Title 11 - BANKRUPTCY
CHAPTER 7 - LIQUIDATION
SUBCHAPTER II - COLLECTION, LIQUIDATION, AND DISTRIBUTION OF THE ESTATE
Sec. 725 - Disposition of certain property
Contains section 725
Date 2019
Laws In Effect As Of Date January 24, 2020
Positive Law Yes
Disposition standard
Statutes at Large References 92 Stat. 2607
98 Stat. 381
Public Law References Public Law 95-598, Public Law 98-353
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