U.S. Bankruptcy Code: 11 U.S.C. Section 102: Rules of construction

Sec. 102. Rules of construction

In this title –
(1) “after notice and a hearing”, or a similar phrase –
(A) means after such notice as is appropriate in the
particular circumstances, and such opportunity for a hearing as
is appropriate in the particular circumstances; but
(B) authorizes an act without an actual hearing if such
notice is given properly and if –
(i) such a hearing is not requested timely by a party in
interest; or
(ii) there is insufficient time for a hearing to be
commenced before such act must be done, and the court
authorizes such act;

(2) “claim against the debtor” includes claim against property
of the debtor;
(3) “includes” and “including” are not limiting;
(4) “may not” is prohibitive, and not permissive;
(5) “or” is not exclusive;
(6) “order for relief” means entry of an order for relief;
(7) the singular includes the plural;
(8) a definition, contained in a section of this title that
refers to another section of this title, does not, for the
purpose of such reference, affect the meaning of a term used in
such other section; and
(9) “United States trustee” includes a designee of the United
States trustee.

(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2554; Pub. L. 98-353, title
III, Sec. 422, July 10, 1984, 98 Stat. 369; Pub. L. 99-554, title
II, Sec. 202, Oct. 27, 1986, 100 Stat. 3097.)


Section 102 specifies various rules of construction but is not
exclusive. Other rules of construction that are not set out in
title 11 are nevertheless intended to be followed in construing the
bankruptcy code. For example, the phrase “on request of a party in
interest” or a similar phrase, is used in connection with an action
that the court may take in various sections of the Code. The phrase
is intended to restrict the court from acting sua sponte. Rules of
bankruptcy procedure or court decisions will determine who is a
party in interest for the particular purposes of the provision in
question, but the court will not be permitted to act on its own.
Although “property” is not construed in this section, it is used
consistently throughout the code in its broadest sense, including
cash, all interests in property, such as liens, and every kind of
consideration including promises to act or forbear to act as in
section 548(d).
Section 102(1) expands on a rule of construction contained in
H.R. 8200 as passed by the House and in the Senate amendment. The
phrase “after notice and a hearing”, or a similar phrase, is
intended to be construed according to the particular proceeding to
mean after such notice as is appropriate in the particular
circumstances, and such opportunity, if any, for a hearing as is
appropriate in the particular circumstances. If a provision of
title 11 authorizes an act to be taken “after notice and a hearing”
this means that if appropriate notice is given and no party to whom
such notice is sent timely requests a hearing, then the act sought
to be taken may be taken without an actual hearing.
In very limited emergency circumstances, there will be
insufficient time for a hearing to be commenced before an action
must be taken. The action sought to be taken may be taken if
authorized by the court at an ex parte hearing of which a record is
made in open court. A full hearing after the fact will be available
in such an instance.
In some circumstances, such as under section 1128, the bill
requires a hearing and the court may act only after a hearing is
held. In those circumstances the judge will receive evidence before
ruling. In other circumstances, the court may take action “after
notice and a hearing,” if no party in interest requests a hearing.
In that event a court order authorizing the action to be taken is
not necessary as the ultimate action taken by the court implies
such an authorization.
Section 102(8) is new. It contains a rule of construction
indicating that a definition contained in a section in title 11
that refers to another section of title 11 does not, for the
purposes of such reference, take the meaning of a term used in the
other section. For example, section 522(a)(2) defines “value” for
the purposes of section 522. Section 548(d)(2) defines “value” for
purposes of section 548. When section 548 is incorporated by
reference in section 522, this rule of construction makes clear
that the definition of “value” in section 548 governs its meaning
in section 522 notwithstanding a different definition of “value” in
section 522(a)(2).

Section 102 provides seven rules of construction. Some are
derived from current law; others are derived from 1 U.S.C. 1; a few
are new. They apply generally throughout proposed title 11. These
are terms that are not appropriate for definition, but that require
an explanation.
Paragraph (1) defines the concept of “after notice and a
hearing.” The concept is central to the bill and to the separation
of the administrative and judicial functions of bankruptcy judges.
The phrase means after such notice as is appropriate in the
particular circumstances (to be prescribed by either the Rules of
Bankruptcy Procedure or by the court in individual circumstances
that the Rules do not cover. In many cases, the Rules will provide
for combined notice of several proceedings), and such opportunity
for a hearing as is appropriate in the particular circumstances.
Thus, a hearing will not be necessary in every instance. If there
is no objection to the proposed action, the action may go ahead
without court action. This is a significant change from present
law, which requires the affirmative approval of the bankruptcy
judge for almost every action. The change will permit the
bankruptcy judge to stay removed from the administration of the
bankruptcy or reorganization case, and to become involved only when
there is a dispute about a proposed action, that is, only when
there is an objection. The phrase “such opportunity for a hearing
as is appropriate in the particular circumstances” is designed to
permit the Rules and the courts to expedite or dispense with
hearings when speed is essential. The language “or similar phrase”
is intended to cover the few instances in the bill where “after
notice and a hearing” is interrupted by another phrase, such as
“after notice to the debtor and a hearing.”
Paragraph (2) specifies that “claim against the debtor” includes
claim against property of the debtor. This paragraph is intended to
cover nonrecourse loan agreements where the creditor’s only rights
are against property of the debtor, and not against the debtor
personally. Thus, such an agreement would give rise to a claim that
would be treated as a claim against the debtor personally, for the
purposes of the bankruptcy code.
Paragraph (3) is a codification of American Surety Co. v.
Marotta, 287 U.S. 513 (1933). It specifies that “includes” and
“including” are not limiting.
Paragraph (4) specifies that “may not” is prohibitive and not
permissive (such as in “might not”).
Paragraph (5) specifies that “or” is not exclusive. Thus, if a
party “may do (a) or (b)”, then the party may do either or both.
The party is not limited to a mutually exclusive choice between the
two alternatives.
Paragraph (6) makes clear that “order for relief” means entry of
an order for relief. If the court orally orders relief, but the
order is not entered until a later time, then any time measurements
in the bill are from entry, not from the oral order. In a voluntary
case, the entry of the order for relief is the filing of the
petition commencing the voluntary case.
Paragraph (7) specifies that the singular includes the plural.
The plural, however, generally does not include the singular. The
bill uses only the singular, even when the item in question most
often is found in plural quantities, in order to avoid the
confusion possible if both rules of construction applied. When an
item is specified in the plural, the plural is intended.

1986 – Par. (9). Pub. L. 99-554 added par. (9).
1984 – Par. (8). Pub. L. 98-353 substituted “contained” for

Effective date and applicability of amendment by Pub. L. 99-554
dependent upon the judicial district involved, see section 302(d),
(e) of Pub. L. 99-554, set out as a note under section 581 of Title
28, Judiciary and Judicial Procedure.

Amendment by Pub. L. 98-353 effective with respect to cases filed
90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353,
set out as a note under section 101 of this title.

All Bankruptcy Code text and information from http://uscode.house.gov/download/title_11.shtml as it existed on January 22, 2012.  We take no responsibility for its updating or accuracy.