(a) An action or proceeding under section 544, 545, 547, 548, or 553 
of this title may not be commenced after the earlier of--
        (1) the later of--
            (A) 2 years after the entry of the order for relief; or
            (B) 1 year after the appointment or election of the first 
        trustee under section 702, 1104, 1163, 1202, or 1302 of this 
        title if such appointment or such election occurs before the 
        expiration of the period specified in subparagraph (A); or

        (2) the time the case is closed or dismissed.

    (b)(1) The rights and powers of a trustee under sections 544, 545, 
and 549 of this title are subject to any generally applicable law that--
        (A) permits perfection of an interest in property to be 
    effective against an entity that acquires rights in such property 
    before the date of perfection; or
        (B) provides for the maintenance or continuation of perfection 
    of an interest in property to be effective against an entity that 
    acquires rights in such property before the date on which action is 
    taken to effect such maintenance or continuation.

    (2) If--
        (A) a law described in paragraph (1) requires seizure of such 
    property or commencement of an action to accomplish such perfection, 
    or maintenance or continuation of perfection of an interest in 
    property; and
        (B) such property has not been seized or such an action has not 
    been commenced before the date of the filing of the petition;

such interest in such property shall be perfected, or perfection of such 
interest shall be maintained or continued, by giving notice within the 
time fixed by such law for such seizure or such commencement.
    (c) Except as provided in subsection (d) of this section, the rights 
and powers of a trustee under sections 544(a), 545, 547, and 549 of this 
title are subject to any statutory or common-law right of a seller of 
goods that has sold goods to the debtor, in the ordinary course of such 
seller's business, to reclaim such goods if the debtor has received such 
goods while insolvent, but--
        (1) such a seller may not reclaim any such goods unless such 
    seller demands in writing reclamation of such goods--
            (A) before 10 days after receipt of such goods by the 
        debtor; or
            (B) if such 10-day period expires after the commencement of 
        the case, before 20 days after receipt of such goods by the 
        debtor; and

        (2) the court may deny reclamation to a seller with such a right 
    of reclamation that has made such a demand only if the court--
            (A) grants the claim of such a seller priority as a claim of 
        a kind specified in section 503(b) of this title; or
            (B) secures such claim by a lien.

    (d) In the case of a seller who is a producer of grain sold to a 
grain storage facility, owned or operated by the debtor, in the ordinary 
course of such seller's business (as such terms are defined in section 
557 of this title) or in the case of a United States fisherman who has 
caught fish sold to a fish processing facility owned or operated by the 
debtor in the ordinary course of such fisherman's business, the rights 
and powers of the trustee under sections 544(a), 545, 547, and 549 of 
this title are subject to any statutory or common law right of such 
producer or fisherman to reclaim such grain or fish if the debtor has 
received such grain or fish while insolvent, but--
        (1) such producer or fisherman may not reclaim any grain or fish 
    unless such producer or fisherman demands, in writing, reclamation 
    of such grain or fish before ten days after receipt thereof by the 
    debtor; and
        (2) the court may deny reclamation to such a producer or 
    fisherman with a right of reclamation that has made such a demand 
    only if the court secures such claim by a lien.

    (e) Notwithstanding sections 544, 545, 547, 548(a)(1)(B), and 548(b) 
of this title, the trustee may not avoid a transfer that is a margin 
payment, as defined in section 101, 741, or 761 of this title, or 
settlement payment, as defined in section 101 or 741 of this title, made 
by or to a commodity broker, forward contract merchant, stockbroker, 
financial institution, or securities clearing agency, that is made 
before the commencement of the case, except under section 548(a)(1)(A) 
of this title.
    (f) Notwithstanding sections 544, 545, 547, 548(a)(1)(B), and 548(b) 
of this title, the trustee may not avoid a transfer that is a margin 
payment, as defined in section 741 or 761 of this title, or settlement 
payment, as defined in section 741 of this title, made by or to a repo 
participant, in connection with a repurchase agreement and that is made 
before the commencement of the case, except under section 548(a)(1)(A) 
of this title.
    (g) Notwithstanding sections 544, 545, 547, 548(a)(1)(B) and 548(b) 
of this title, the trustee may not avoid a transfer under a swap 
agreement, made by or to a swap participant, in connection with a swap 
agreement and that is made before the commencement of the case, except 
under section 548(a)(1)(A) of this title.
    (g) \1\ Notwithstanding the rights and powers of a trustee under 
sections 544(a), 545, 547, 549, and 553, if the court determines on a 
motion by the trustee made not later than 120 days after the date of the 
order for relief in a case under chapter 11 of this title and after 
notice and a hearing, that a return is in the best interests of the 
estate, the debtor, with the consent of a creditor, may return goods 
shipped to the debtor by the creditor before the commencement of the 
case, and the creditor may offset the purchase price of such goods 
against any claim of the creditor against the debtor that arose before 
the commencement of the case.
---------------------------------------------------------------------------
    \1\ So in original. Probably should be ``(h)''.
---------------------------------------------------------------------------

(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2597; Pub. L. 97-222, Sec. 4, 
July 27, 1982, 96 Stat. 236; Pub. L. 98-353, title III, Secs. 351, 393, 
461, July 10, 1984, 98 Stat. 358, 365, 377; Pub. L. 99-554, title II, 
Secs. 257(d), 283(l), Oct. 27, 1986, 100 Stat. 3114, 3117; Pub. L. 101-
311, title I, Sec. 103, title II, Sec. 203, June 25, 1990, 104 Stat. 
268, 269; Pub. L. 103-394, title II, Secs. 204(b), 209, 216, 222(a), 
title V, Sec. 501(b)(4), Oct. 22, 1994, 108 Stat. 4122, 4125, 4126, 
4129, 4142; Pub. L. 105-183, Sec. 3(c), June 19, 1998, 112 Stat. 518.)


                      Historical and Revision Notes

                         legislative statements

    Section 546(a) of the House amendment is derived from section 546(c) 
of the Senate amendment. Section 546(c) of the House amendment is 
derived from section 546(b) of the Senate amendment. It applies to 
receipt of goods on credit as well as by cash sales. The section 
clarifies that a demand for reclamation must be made in writing anytime 
before 10 days after receipt of the goods by the debtor. The section 
also permits the court to grant the reclaiming creditor a lien or an 
administrative expense in lieu of turning over the property.


                        senate report no. 95-989

    The trustee's rights and powers under certain of the avoiding powers 
are limited by section 546. First, if an interest holder against whom 
the trustee would have rights still has, under applicable nonbankruptcy 
law, and as of the date of the petition, the opportunity to perfect his 
lien against an intervening interest holder, then he may perfect his 
interest against the trustee. If applicable law requires seizure for 
perfection, then perfection is by notice to the trustee instead. The 
rights granted to a creditor under this subsection prevail over the 
trustee only if the transferee has perfected the transfer in accordance 
with applicable law, and that perfection relates back to a date that is 
before the commencement of the case.
    The phrase ``generally applicable law'' relates to those provisions 
of applicable law that apply both in bankruptcy cases and outside of 
bankruptcy cases. For example, many State laws, under the Uniform 
Commercial Code, permit perfection of a purchase-money security interest 
to relate back to defeat an earlier levy by another creditor if the 
former was perfected within ten days of delivery of the property. U.C.C. 
Sec. 9-301(2). Such perfection would then be able to defeat an 
intervening hypothetical judicial lien creditor on the date of the 
filing of the petition. The purpose of the subsection is to protect, in 
spite of the surprise intervention of a bankruptcy petition, those whom 
State law protects by allowing them to perfect their liens or interests 
as of an effective date that is earlier than the date of perfection. It 
is not designed to give the States an opportunity to enact disguised 
priorities in the form of liens that apply only in bankruptcy cases.
    Subsection (b) [enacted as (c)] specifies that the trustee's rights 
and powers under the strong arm clause, the successor to creditors 
provision, the preference section, and the postpetition transaction 
section are all subject to any statutory or common-law right of a 
seller, in the ordinary course of business, of goods to the debtor to 
reclaim the goods if the debtor received the goods on credit while 
insolvent. The seller must demand reclamation within ten days after 
receipt of the goods by the debtor. As under nonbankruptcy law, the 
right is subject to any superior rights of secured creditors. The 
purpose of the provision is to recognize, in part, the validity of 
section 2-702 of the Uniform Commercial Code, which has generated much 
litigation, confusion, and divergent decisions in different circuits. 
The right is subject, however, to the power of the court to deny 
reclamation and protect the seller by granting him a priority as an 
administrative expense for his claim arising out of the sale of the 
goods.
    Subsection (c) [enacted as (a)] adds a statute of limitations to the 
use by the trustee of the avoiding powers. The limitation is two years 
after his appointment, or the time the case is closed or dismissed, 
whichever occurs later.


                               Amendments

    1998--Subsecs. (e) to (g). Pub. L. 105-183 substituted 
``548(a)(1)(B)'' for ``548(a)(2)'' and ``548(a)(1)(A)'' for 
``548(a)(1)''.
    1994--Subsec. (a)(1). Pub. L. 103-394, Sec. 216, amended par. (1) 
generally. Prior to amendment, par. (1) read as follows: ``two years 
after the appointment of a trustee under section 702, 1104, 1163, 1302, 
or 1202 of this title; or''.
    Subsec. (b). Pub. L. 103-394, Sec. 204(b), amended subsec. (b) 
generally. Prior to amendment, subsec. (b) read as follows: ``The rights 
and powers of a trustee under sections 544, 545, and 549 of this title 
are subject to any generally applicable law that permits perfection of 
an interest in property to be effective against an entity that acquires 
rights in such property before the date of such perfection. If such law 
requires seizure of such property or commencement of an action to 
accomplish such perfection, and such property has not been seized or 
such action has not been commenced before the date of the filing of the 
petition, such interest in such property shall be perfected by notice 
within the time fixed by such law for such seizure or commencement.''
    Subsec. (c)(1). Pub. L. 103-394, Sec. 209, amended par. (1) 
generally. Prior to amendment, par. (1) read as follows: ``such a seller 
may not reclaim any such goods unless such seller demands in writing 
reclamation of such goods before ten days after receipt of such goods by 
the debtor; and''.
    Subsec. (e). Pub. L. 103-394, Sec. 501(b)(4)(A), substituted 
``section 101, 741, or 761'' for ``section 101(34), 741(5), or 761(15)'' 
and ``section 101 or 741'' for ``section 101(35) or 741(8)''.
    Subsec. (f). Pub. L. 103-394, Sec. 501(b)(4)(B), substituted 
``section 741 or 761'' for ``section 741(5) or 761(15)'' and ``section 
741'' for ``section 741(8)''.
    Subsec. (g). Pub. L. 103-394, Sec. 222(a), added subsec. (g) 
relating to return of goods.
    1990--Subsec. (e). Pub. L. 101-311, Sec. 203, inserted reference to 
sections 101(34) and 101(35) of this title.
    Subsec. (g). Pub. L. 101-311, Sec. 103, added subsec. (g) relating 
to trustee's authority to avoid transfer involving swap agreement.
    1986--Subsec. (a)(1). Pub. L. 99-554, Sec. 257(d), inserted 
reference to section 1202 of this title.
    Subsec. (e). Pub. L. 99-554, Sec. 283(l), inserted a comma after 
``stockbroker''.
    1984--Subsec. (a)(1). Pub. L. 98-353, Sec. 461(a), substituted ``; 
or'' for ``; and''.
    Subsec. (b). Pub. L. 98-353, Sec. 461(b), substituted ``a trustee 
under sections 544, 545, and'' for ``the trustee under sections 544, 
545, or''.
    Subsec. (c). Pub. L. 98-353, Secs. 351(1), 461(c)(1)-(4), 
substituted ``Except as provided in subsection (d) of this section, 
the'' for ``The'', substituted ``a trustee'' for ``the trustee'', struck 
out ``right'' before ``or common-law'', inserted ``of goods that has 
sold goods to the debtor'' after ``seller'', and struck out ``of goods 
to the debtor'' after ``business,''.
    Subsec. (c)(2). Pub. L. 98-353, Sec. 461(c)(5)(A), inserted ``the'' 
after ``if'' in provisions preceding subpar. (A).
    Subsec. (c)(2)(A). Pub. L. 98-353, Sec. 461(c)(5)(B), substituted 
``a claim of a kind specified in section 503(b) of this title'' for ``an 
administrative expense''.
    Subsec. (d). Pub. L. 98-353, Sec. 351(3), added subsec. (d). Former 
subsec. (d) redesignated (e).
    Subsec. (e). Pub. L. 98-353, Secs. 351(2), 461(d), redesignated 
former subsec. (d) as (e) and inserted ``financial institution'' after 
``stockbroker''.
    Subsec. (f). Pub. L. 98-353, Sec. 393, added subsec. (f).
    1982--Subsec. (d). Pub. L. 97-222 added subsec. (d).


                    Effective Date of 1998 Amendment

    Amendment by Pub. L. 105-183 applicable to any case brought under an 
applicable provision of this title that is pending or commenced on or 
after June 19, 1998, see section 5 of Pub. L. 105-183, set out as a note 
under section 544 of this title.


                    Effective Date of 1994 Amendment

    Amendment by Pub. L. 103-394 effective Oct. 22, 1994, and not 
applicable with respect to cases commenced under this title before Oct. 
22, 1994, see section 702 of Pub. L. 103-394, set out as a note under 
section 101 of this title.


                    Effective Date of 1986 Amendment

    Amendment by section 257 of Pub. L. 99-554 effective 30 days after 
Oct. 27, 1986, but not applicable to cases commenced under this title 
before that date, see section 302(a), (c)(1) of Pub. L. 99-554, set out 
as a note under section 581 of Title 28, Judiciary and Judicial 
Procedure.
    Amendment by section 283 of Pub. L. 99-554 effective 30 days after 
Oct. 27, 1986, see section 302(a) of Pub. L. 99-554.


                    Effective Date of 1984 Amendment

    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.

                  Section Referred to in Other Sections

    This section is referred to in sections 106, 362, 552, 901 of this 
title.