View all text of Subchapter II [§ 5381 - § 5394]
§ 5382. Judicial review
(a) Commencement of orderly liquidation
(1) Petition to District Court
(A) District Court review
(i) Petition to District Court
(ii) Form and span of order
(iii) Determination
(iv) Issuance of orderIf the Court determines that the determination of the Secretary that the covered financial company is in default or in danger of default and satisfies the definition of a financial company under section 5381(a)(11) of this title—(I) is not arbitrary and capricious, the Court shall issue an order immediately authorizing the Secretary to appoint the Corporation as receiver of the covered financial company; or(II) is arbitrary and capricious, the Court shall immediately provide to the Secretary a written statement of each reason supporting its determination, and afford the Secretary an immediate opportunity to amend and refile the petition under clause (i).
(v) Petition granted by operation of lawIf the Court does not make a determination within 24 hours of receipt of the petition—(I) the petition shall be granted by operation of law;(II) the Secretary shall appoint the Corporation as receiver; and(III) liquidation under this subchapter shall automatically and without further notice or action be commenced and the Corporation may immediately take all actions authorized under this subchapter.
(B) Effect of determination
(C) Criminal penalties
(2) Appeal of decisions of the District Court
(A) Appeal to Court of Appeals
(i) In general
(ii) Condition of jurisdiction
(iii) Expedition
(iv) Scope of review
(B) Appeal to the Supreme Court
(i) In general
(ii) Written statement
(iii) Expedition
(iv) Scope of review
(b) Establishment and transmittal of rules and procedures
(1) In general
(2) Publication of rulesThe rules and procedures established under paragraph (1), and any modifications of such rules and procedures, shall be recorded and shall be transmitted to—
(A) the Committee on the Judiciary of the Senate;
(B) the Committee on Banking, Housing, and Urban Affairs of the Senate;
(C) the Committee on the Judiciary of the House of Representatives; and
(D) the Committee on Financial Services of the House of Representatives.
(c) Provisions applicable to financial companies
(1) Bankruptcy Code
(2) This subchapter
(d) Time limit on receivership authority
(1) Baseline period
(2) Extension of time limitThe time limit established in paragraph (1) may be extended by the Corporation for up to 1 additional year, if the Chairperson of the Corporation determines and certifies in writing to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives that continuation of the receivership is necessary—
(A) to—
(i) maximize the net present value return from the sale or other disposition of the assets of the covered financial company; or
(ii) minimize the amount of loss realized upon the sale or other disposition of the assets of the covered financial company; and
(B) to protect the stability of the financial system of the United States.
(3) Second extension of time limit
(A) In general
(B) Additional report required
(4) Ongoing litigationThe time limit under this subsection, as extended under paragraph (3), may be further extended solely for the purpose of completing ongoing litigation in which the Corporation as receiver is a party, provided that the appointment of the Corporation as receiver shall terminate not later than 90 days after the date of completion of such litigation, if—
(A) the Council determines that the Corporation used its best efforts to conclude the receivership in accordance with its plan before the end of the time limit described in paragraph (3);
(B) the Council determines that the completion of longer-term responsibilities in the form of ongoing litigation justifies the need for an extension; and
(C) the Corporation submits a report approved by the Council not later than 30 days after the date of the determinations by the Council under subparagraphs (A) and (B) to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, describing—
(i) the ongoing litigation justifying the need for an extension; and
(ii) the specific plan of the Corporation to complete the litigation and conclude the receivership.
(5) Regulations
(6) No liability
(e) Study of bankruptcy and orderly liquidation process for financial companies
(1) Study
(A) In general
(B) Issues to be studiedIn conducting the study under subparagraph (A), the Administrative Office of the United States Courts and the Comptroller General of the United States each shall evaluate—
(i) the effectiveness of chapter 7 or chapter 11 of the Bankruptcy Code in facilitating the orderly liquidation or reorganization of financial companies;
(ii) ways to maximize the efficiency and effectiveness of the Court; and
(iii) ways to make the orderly liquidation process under the Bankruptcy Code for financial companies more effective.
(2) Reports
(f) Study of international coordination relating to bankruptcy process for financial companies
(1) Study
(A) In general
(B) Issues to be studied
(i) the extent to which international coordination currently exists;
(ii) current mechanisms and structures for facilitating international cooperation;
(iii) barriers to effective international coordination; and
(iv) ways to increase and make more effective international coordination.
(2) Report
(g) Study of prompt corrective action implementation by the appropriate Federal agencies
(1) Study
(2) Issues to be studiedIn conducting the study under paragraph (1), the Comptroller General shall evaluate—
(A) the effectiveness of implementation of prompt corrective action by the appropriate Federal banking agencies and the resolution of insured depository institutions by the Corporation; and
(B) ways to make prompt corrective action a more effective tool to resolve the insured depository institutions at the least possible long-term cost to the Deposit Insurance Fund.
(3) Report to Council
(4) Council report of action
(Pub. L. 111–203, title II, § 202, July 21, 2010, 124 Stat. 1444.)