/* We continue with our second part of the bankruptcy code, which is the first part of Chapter 3. For anyone who is confused the bankruptcy code skips even numbers except for chapter 12, so, as the index points out:
The proper order is Chapter 1, 3, 5, 7, 9, 11, 12, 13 */
CHAPTER 3
Case Administration
SUBCHAPTER I
Commencement of a Case
SECTION 301(11 U.S.C. 301)
301. Voluntary cases. A voluntary case under a chapter
of this title is commenced by the filing with the bankruptcy
court of a petition under such chapter by an entity that may be a
debtor under such chapter. The commencement of a voluntary case
under a chapter of this title constitutes an order for relief
under such chapter.
/* No action by the Court is necessary to begin the automatic stay. The acceptance of the petition begins the case. */
SECTION 302 (11 U.S.C. 302)
302. Joint cases.
(a) A joint case under a chapter of this title is
commenced by the filing with the bankruptcy court of a single
petition under such chapter by an individual that may be a debtor
under such chapter and such individual's spouse. The commencement
of a joint case under a chapter of this title constitutes an
order for relief under such chapter.
(b) After the commencement of a joint case, the court
shall determine the extent, if any, to which the debtors'
estates shall be consolidated.
SECTION 303 (11 U.S.C. 303)
303. Involuntary cases.
(a) An involuntary case may be commenced only under
chapter 7 or 11 of this title, and only against a person, except
a farmer, family farmer, or a corporation that is not a moneyed,
business, or commercial corporation, that may be a debtor under
the chapter under which such case is commenced.
(b) An involuntary case against a person is commenced by
the filing with the bankruptcy court of a petition under chapter 7 or 11 of this title-
(1) by three or more entities, each of which is either a
holder of a claim against such person that is not contingent as
to liability or the subject of a bona fide dispute, or an
indenture trustee representing such a holder, if such claims
aggregate at least $5,000 more than the value of any lien on
property of the debtor securing such claims held by the holders
of such claims;
(2) if there are fewer than 12 such holders, excluding any
employee or insider of such person and any transferee of a
transfer that is voidable under section 544, 545, 547, 548, 549,
or 724(a) of this title, by one or more of such holders that hold
in the aggregate at least $5,000 of such claims;
(3) if such person is a partnership -
(A) by fewer than all of the general partners in such
partnership; or
(B) if relief has been ordered under this title with
respect to all of the general partners in such partnership, by a
general partner in such partnership, the trustee of such a
general partner, or a holder of a claim against such partnership;
or
(4) by a foreign representative of the estate in a foreign
proceeding concerning such person.
(c) After the filing of a petition under this section but
before the case is dismissed or relief is ordered, a creditor
holding an unsecured claim that is not contingent, other than a
creditor filing under subsection (b) of this section, may join in
the petition with the same effect as if such joining creditor
were a petitioning creditor under subsection (b) of this section.
(d) The debtor, or a general partner in a partnership debtor that did not join in the petition, may file an answer to a
petition under this section.
(e) After notice and a hearing, and for cause, the court
may require the petitioners under this section to file a bond to
indemnify the debtor for such amounts as the court may later
allow under subsection (i) of this section.
(f) Notwithstanding section 363 of this title, except to
the extent that the court orders otherwise, and until an order
for relief in the case, any business of the debtor may continue
to operate, and the debtor may continue to use, acquire, or
dispose of property as if an involuntary case concerning the
debtor had not been commenced.
(g) At any time after the commencement of an involuntary case under chapter 7 of this title but before an order for relief
in the case, the court, on request of a party in interest, after
notice to the debtor and a hearing, and if necessary to preserve
the property of the estate or to prevent loss to the estate, may
order the United States trustee to appoint an interim trustee
under section 701 of this title to take possession of the
property of the estate and to operate any business of the debtor.
Before an order for relief, the debtor may regain possession of
property in the possession of a trustee ordered appointed under
this subsection if the debtor files such bond as the court
requires, conditioned on the debtor's accounting for and
delivering to the trustee, if there is an order for relief in the
case, such property, or the value, as of the date the debtor
regains possession, of such property.
(h) If the petition is not timely controverted, the court
shall order relief against the debtor in an involuntary case
under the chapter under which the petition was filed. Otherwise,
after trial, the court shall order relief against the debtor in
an involuntary case under the chapter under which the petition
was filed, only if-
(1) the debtor is generally not paying such debtor's debts
as such debts become due unless such debts are the subject of a
bona fide dispute; or
/* There are two definitions of insolvency within the law- the legal and the equitable test. The legal test is a balance sheet test; the equitable test is stated above. Accordingly, balance sheet insolvency is not a determining factor in determining whether or not to grant relief. */
(2) within 120 days before the date of the filing of the
petition, a custodian, other than a trustee, receiver, or agent
appointed or authorized to take charge of less than substantially
all of the property of the debtor for the purpose of enforcing a
lien against such property, was appointed or took possession.
(i) If the court dismisses a petition under this section other
than on consent of all petitioners and the debtor, and if the
debtor does not waive the right to judgment under this
subsection, the court may grant judgment --
(1) against the petitioners and in favor of the debtor
for-
(A) costs; or
(B) a reasonable attorney's fee; or
(2) against any petitioner that filed the petition in bad
faith, for-
(A) any damages proximately caused by such filing; or
(B) punitive damages.
(j) Only after notice to all creditors and a hearing may
the court dismiss a petition filed under this section-
(1) on the motion of a petitioner;
(2) on consent of all petitioners and the debtor; or
(3) for want of prosecution,
(k) Notwithstanding subsection (a) of this section, an
involuntary case may be commenced against a foreign bank that is
not engaged in such business in the United States only under
chapter 7 of this title and only if a foreign proceeding
concerning such bank is pending.
SECTION 304 (11 U.S.C. 304)
304. Cases ancillary to foreign proceedings.
(a) A case ancillary to a foreign proceeding is commenced
by the filing with the bankruptcy court of a petition under this
section by a foreign representative,
(b) Subject to the provisions of subsection (c) of this
section, if a party in interest does not timely controvert the
petition, or after trial, the court may-
(1) enjoin the commencement or continuation of-
(A) any action against a debtor with respect to property
involved in such foreign proceeding; or in such property; or
(B) the enforcement of any judgment against the debtor
with respect to such property, or any act or the commencement or
continuation of any judicial proceeding to create or enforce a
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