§ 544. Trustee as lien creditor and as successor to certain creditors and purchasers
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(a)The trustee shall have, as of the commencement of the case, and without regard to any knowledge of the trustee or of any creditor, the rights and powers of, or may avoid any transfer of property of the debtor or any obligation incurred by the debtor that is voidable by—
(1)a creditor that extends credit to the debtor at the time of the commencement of the case, and that obtains, at such time and with respect to such credit, a judicial lien on all property on which a creditor on a simple contract could have obtained such a judicial lien, whether or not such a creditor exists;
(2)a creditor that extends credit to the debtor at the time of the commencement of the case, and obtains, at such time and with respect to such credit, an execution against the debtor that is returned unsatisfied at such time, whether or not such a creditor exists; or
(3)a bona fide purchaser of real property, other than fixtures, from the debtor, against whom applicable law permits such transfer to be perfected, that obtains the status of a bona fide purchaser and has perfected such transfer at the time of the commencement of the case, whether or not such a purchaser exists.
(1)Except as provided in paragraph (2), the trustee may avoid any transfer of an interest of the debtor in property or any obligation incurred by the debtor that is voidable under applicable law by a creditor holding an unsecured claim that is allowable under section 502 of this title or that is not allowable only under section 502(e) of this title.
(2)Paragraph
(1)shall not apply to a transfer of a charitable contribution (as that term is defined in section 548(d)(3)) that is not covered under section 548(a)(1)(B), by reason of section 548(a)(2). Any claim by any person to recover a transferred contribution described in the preceding sentence under Federal or State law in a Federal or State court shall be preempted by the commencement of the case.
(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2596; Pub. L. 98–353, title III, § 459, July 10, 1984, 98 Stat. 377; Pub. L. 105–183, § 3(b), June 19, 1998, 112 Stat. 518.)
Historical and Revision Notes
legislative statements
Section 544(a)(3) modifies similar provisions contained in the House bill and Senate amendment so as not to require a creditor to perform the impossible in order to perfect his interest. Both the lien creditor test in section 544(a)(1), and the bona fide purchaser test in section 544(a)(3) should not require a transferee to perfect a transfer against an entity with respect to which applicable law does not permit perfection. The avoiding powers under section 544(a)(1), (2), and
(3)are new. In particular, section 544(a)(1) overrules Pacific Finance Corp. v. Edwards, 309 F.2d 224 (9th Cir. 1962), and In re Federals, Inc., 553 F.2d 509 (6th Cir. 1977), insofar as those cases held that the trustee did not have the status of a creditor who extended credit immediately prior to the commencement of the case.
The House amendment deletes section 544(c) of the House bill.
senate report no. 95–989
Subsection
(a)is the “strong arm clause” of current law, now found in Bankruptcy Act § 70c [section 110(c) of former title 11]. It gives the trustee the rights of a creditor on a simple contract with a judicial lien on the property of the debtor as of the date of the petition; of a creditor with a writ of execution against the property of the debtor unsatisfied as of the date of the petition; and a bona fide purchaser of the real property of the debtor as of the date of the petition. “Simple contract” as used here is derived from Bankruptcy Act § 60a(4) [section 96(a)(4) of former title 11]. The third status, that of a bona fide purchaser of real property, is new.
Subsection
(b)is derived from current section 70e [section 110(e) of former title 11]. It gives the trustee the rights of actual unsecured creditors under applicable law to void transfers. It follows Moore v. Bay, 284 U.S. 4 (1931), and overrules those cases that hold section 70e gives the trustee the rights of secured creditors.
Connections14 cite this · traces to 2
Cited by 14 sections · top 11
U.S. Code
statutes-at-large
- Public Law 97–222To amend title 11, United States Code, to correct technical errors, and to clarify and make substantive changes, with respect to securities and commodities
- Public Law 95–598To establish a uniform Law on the Subject of Bankruptcies
- Public Law 105–183To amend title 11, United States Code, to protect certain charitable contributions, and for other purposes
Traces to 2 documents
16 references not yet in our index
- Pub. L. 95–598
- 92 Stat. 2596
- Pub. L. 98–353, title III, § 459
- 98 Stat. 377
- Pub. L. 105–183, § 3(b)
- 112 Stat. 518
- Pub. L. 105–183
- Pub. L. 98–353, § 459(1)
- Pub. L. 98–353, § 459(2)
- Pub. L. 98–353, § 459(3)
- Pub. L. 105–183, § 5
- Pub. L. 98–353
- section 552(a) of Pub. L. 98–353
- Pub. L. 105–183, § 6
- 112 Stat. 519
- 42 U.S.C. 2002bb
Citation graph
cites case law
§ 544
Trustee as lien creditor and as successor to certain creditors and purchasers
U.S.C.×6
Stat.×5
IRM×2
Fed. Reg.×1
Pub. L.Pub. L. 95–598
Stat.92 Stat. 2596
Pub. L.Pub. L. 98–353, title III, § 459
Stat.98 Stat. 377
Pub. L.Pub. L. 105–183, § 3(b)
Cites 18 · showing 7Cited by 14 across 4 sources