Discussion Draft of Legislation
In brief(AI Overview)
Discussion draft of H.R. ll (113th Congress, 2d Session) proposing the Financial Institution Bankruptcy Act of 2014, which amends title 11 to create a new Subchapter V of Chapter 11 enabling bankruptcy resolution of insolvent financial institutions (covered financial corporations) through liquidation, reorganization, or recapitalization.
Key points(AI Overview)
- Defines 'covered financial corporation' to include bank holding companies and entities engaged in Federal Reserve-determined financial activities, excluding stockbrokers and commodity brokers
- Allows Federal Reserve Board to file involuntary bankruptcy petitions for covered financial corporations upon certification of insolvency and threat to financial stability
- Establishes expedited hearing procedures (within 12 hours) with limited notice to debtor, FDIC, and Treasury, with sealed proceedings for first 24 hours
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