Disclaimer of onerous property permits the trustee to reject burdensome assets, converting consequential losses into provable creditor claims. A bankruptcy trustee may disclaim onerous property of the bankrupt by notice to interested persons, even after possession or sale efforts; the disclaimer, from its date, fixes the bankrupt's rights and liabilities in relation to the property and relieves the trustee of personal liability from appointment. Disclaimer is barred for property already claimed for the estate without committee of creditors' permission; third party rights remain unaffected, and persons suffering loss from the disclaimer are deemed creditors to the extent of their loss. 'Onerous property' includes unprofitable contracts and unsaleable or claim generating assets.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Disclaimer of onerous property permits the trustee to reject burdensome assets, converting consequential losses into provable creditor claims.
A bankruptcy trustee may disclaim onerous property of the bankrupt by notice to interested persons, even after possession or sale efforts; the disclaimer, from its date, fixes the bankrupt's rights and liabilities in relation to the property and relieves the trustee of personal liability from appointment. Disclaimer is barred for property already claimed for the estate without committee of creditors' permission; third party rights remain unaffected, and persons suffering loss from the disclaimer are deemed creditors to the extent of their loss. "Onerous property" includes unprofitable contracts and unsaleable or claim generating assets.
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