11 U.S.C. § 747 — Subordination of certain customer claims

Except as provided in section 510 of this title , unless all other customer net equity claims have been paid in full, the trustee may not pay in full or pay in part, directly or indirectly, any net equity claim of a customer that was, on the date the transaction giving rise to such claim occurred— (1) an insider; (2) a beneficial owner of at least five percent of any class of equity securities of the debtor, other than— (A) nonconvertible stock having fixed preferential dividend and liquidation rights; or (B) interests of limited partners in a limited partnership; (3) a limited partner with a participation of at least five percent in the net assets or net profits of the debtor; or (4) an entity that, directly or indirectly, through agreement or otherwise, exercised or had the power to exercise control over the management or policies of the debtor. ( Pub. L. 95–598 , Nov. 6, 1978 , 92 Stat. 2613 ; Pub. L. 97–222, § 13 , July 27, 1982 , 96 Stat. 238 .) Historical and Revision Notes senate report no. 95–989 Section 747 subordinates to other customer claims, all claims of a customer who is an insider, a five percent owner of the debtor, or otherwise in control of the debtor. Editorial Notes Amendments 1982— Pub. L. 97–222 substituted “the transaction giving rise to such claim occurred” for “such claim arose” in provisions preceding par. (1).

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