Sec. 2. Definitions
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In this Act— the term analytical work means an article, a thesis, a study, testimony, a speech, or a report that— is written, given, or conducted by— a Federal or State agency; a Federal Government or State government official; a policy organization; a professional association; an academic; a bankruptcy judge, trustee, or examiner; a working group; a commission; or a person, entity, or body similar to those described in clauses
(i)through (viii); and contains an analysis of, and conclusions or recommendations with respect to, a particular topic; the term avoidance action safe harbor means subsections (e), (f), (g), (h), and
(j)of section 546 of the Bankruptcy Code; the term bank holding company has the meaning given the term in section 102 of the Financial Stability Act of 2010 ( 12 U.S.C. 5311 ); the term Bankruptcy Code means title 11, United States Code; the term bridge company means a bridge company that— management may create under the proposed subchapter; and has no assets and no liabilities; the term business judgment rule means the standard to which a trustee or debtor in possession is typically held in a bankruptcy case in determining whether the assumption, or assumption and assignment, of an executory contract under section 365 of the Bankruptcy Code is in the best interests of creditors and the estate; the term collateral haircut means the difference between the market value of an asset that is used as loan collateral and the amount of that loan; the term committees of jurisdiction means— the Committee on Banking, Housing, and Urban Affairs of the Senate; the Committee on the Judiciary of the Senate; the Committee on Financial Services of the House of Representatives; and the Committee on the Judiciary of the House of Representatives; the term Council means the Financial Stability Oversight Council; the term financial company has the meaning given the term in section 201(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5381(a) ); the term hypothetical bank holding company means a fictional bank holding company that has— a corporate organizational structure typical of the business structure of the 6 largest bank holding companies based in the United States, as measured by balance sheet assets on December 31, 2016, the holdings of which include commercial banking, capital markets, global asset management, and transaction services; assets and liabilities representing the median of the assets and liabilities held by the 6 largest bank holding companies based in the United States, as measured by balance sheet assets on December 31, 2016; and a global derivatives trading book representing the median of the gross notional value of the 6 largest bank holding companies based in the United States, as measured by balance sheet assets on December 31, 2016; the term management means the officers and members of the board of directors of a financial company; the term master netting agreement means an agreement providing for— the netting of amounts due between or among the parties to 2 or more qualified financial contracts on periodic reset dates; and the exercise of rights, including rights of netting, setoff, liquidation, termination, acceleration, or close out, under 1 or more qualified financial contracts upon the occurrence of an event of default; the term MBS repurchase agreement means a repurchase agreement that provides for the transfer of 1 or more— mortgage related securities; mortgage loans; or interests in mortgage related securities or mortgage loans; the term mortgage related security has the meaning given the term in section 3(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c(a) ); the term Office means the Office of Financial Research; the term primary financial regulatory agency has the meaning given the term in section 2 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5301 ); the term proposed subchapter means a hypothetical new subchapter to chapter 11 of the Bankruptcy Code that includes provisions specifically applicable to a financial company bankruptcy and permits— management to file, on behalf of the financial company controlled by management, a petition under the Bankruptcy Code; management to create a bridge company; management to supervise the drafting of the governing documents for the bridge company; management to propose the initial directors and senior officers of the bridge company; not later than 48 hours after the filing of the petition, the assets of the financial company to be transferred to the bridge company if the bankruptcy court has determined that— such a transfer is in the best interests of the bankruptcy estate of the financial company; and the bridge company is not likely to fail to meet the obligations of any debt, executory contract, qualified financial contract, or unexpired lease that the bridge company has assumed; if the bankruptcy court makes the determinations described in subparagraph (E), the bridge company to agree— to honor, forever, the obligations of the financial company under all of its qualified financial contracts; to pay in full all the claims of any person that has a qualified financial contract with the financial company; and to pay in full the claims of undersecured creditors of the financial company that have even a small amount of collateral; or if the bankruptcy court is unable to make both of the determinations described in subparagraph (E), all qualified financial contracts and master netting agreements of the financial company to be terminated immediately; management— to leave behind in the financial company bankruptcy estate the claims of all creditors, including employees, suppliers, service providers, and fraud claimants, that have no collateral and no qualified financial contracts with the financial company; and to provide the creditors described in clause
(i)with, instead of a cash payment, an equity interest in the bridge company that is payable only after all of the claims described in subparagraph
(F)have been paid in full; the bridge company to be placed under the control of a special trustee proposed by management, over whose activities the bankruptcy court has no jurisdiction; the 20 largest unsecured creditors of the financial company to receive notice of only 24 hours that the events described in subparagraphs
(A)through
(H)will occur; the smaller creditors of the financial company, including the employees, suppliers, service providers, and fraud claimants of the financial company, to receive no notice that the events described in subparagraphs
(A)through
(H)will occur; and management to avoid being held liable for most actions taken in connection with the filing, including the actions described in subparagraphs
(A)through (H); the term proposed subchapter with title II repealed means the proposed subchapter, assuming that title II, including the prohibition against taxpayer funding of the liquidation of a financial company under section 214 of that title ( 12 U.S.C. 5394 ), has been repealed; the term qualified financial contract means— a commodity contract, commodity option, foreign future, or leverage transaction, as those terms are defined in section 761 of the Bankruptcy Code; a forward contract, master netting agreement, repurchase agreement, or swap agreement, as those terms are defined in section 101 of the Bankruptcy Code; or a securities contract, as that term is defined in section 741 of the Bankruptcy Code; the term regulatory capital means the amount of capital that a bank holding company is required by its primary financial regulatory agency to hold on its balance sheet; the term repurchase agreement has the meaning given the term in section 101 of the Bankruptcy Code; the term safe harbor means— the avoidance action safe harbor; and the termination and liquidation safe harbor; the term termination and liquidation safe harbor means— paragraphs (6), (7), (17), and
(27)of section 362(b) of the Bankruptcy Code; and sections 555, 556, 559, 560, and 561 of the Bankruptcy Code; the term title II means title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5381 et seq. ); and the term Treasury repurchase agreement means a repurchase agreement that provides for the transfer of securities that are direct obligations of, or that are fully guaranteed by, the United States.
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