Los Angeles Bankruptcy Attorney, Bankruptcy Lawyer, Bankruptcy Code 11 USC Section 508

TITLE 11 - BANKRUPTCY
CHAPTER 5 - CREDITORS, THE DEBTOR, AND THE ESTATE
    SUBCHAPTER I - CREDITORS AND CLAIMS

-HEAD-
    Sec. 508. Effect of distribution other than under this title

-STATUTE-
      If a creditor of a partnership debtor receives, from a general
    partner that is not a debtor in a case under chapter 7 of this
    title, payment of, or a transfer of property on account of, a claim
    that is allowed under this title and that is not secured by a lien
    on property of such partner, such creditor may not receive any
    payment under this title on account of such claim until each of the
    other holders of claims on account of which such holders are
    entitled to share equally with such creditor under this title has
    received payment under this title equal in value to the
    consideration received by such creditor from such general partner.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2585; Pub. L. 109-8, title
    VIII, Sec. 802(d)(7), Apr. 20, 2005, 119 Stat. 146.)


                       HISTORICAL AND REVISION NOTES                   

                          LEGISLATIVE STATEMENTS                      
      Section 508(b) of the House amendment is new and provides an
    identical rule with respect to a creditor of a partnership who
    receives payment from a partner, to that of a creditor of a debtor
    who receives a payment in a foreign proceeding involving the
    debtor.

                         SENATE REPORT NO. 95-989                     
      This section prohibits a creditor from receiving any distribution
    in the bankruptcy case if he has received payment of a portion of
    his claim in a foreign proceeding, until the other creditors in the
    bankruptcy case in this country that are entitled to share equally
    with that creditor have received as much as he has in the foreign
    proceeding.

                                AMENDMENTS                            
      2005 - Pub. L. 109-8 designated subsec. (b) as entire section and
    struck out subsec. (a) which read as follows: "If a creditor
    receives, in a foreign proceeding, payment of, or a transfer of
    property on account of, a claim that is allowed under this title,
    such creditor may not receive any payment under this title on
    account of such claim until each of the other holders of claims on
    account of which such holders are entitled to share equally with
    such creditor under this title has received payment under this
    title equal in value to the consideration received by such creditor
    in such foreign proceeding."

                     EFFECTIVE DATE OF 2005 AMENDMENT                 
      Amendment by Pub. L. 109-8 effective 180 days after Apr. 20,
    2005, and not applicable with respect to cases commenced under this
    title before such effective date, except as otherwise provided, see
    section 1501 of Pub. L. 109-8, set out as a note under section 101
    of this title.

-End-
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