Customer property refers to various types of assets, such as cash, securities, or other properties, that a debtor holds on behalf of their customers. This includes funds or assets received for the purpose of trading commodity contracts. It is essential in bankruptcy proceedings, especially in cases involving commodity brokers, as it determines what belongs to the customers and what can be claimed by the debtor.
This term is primarily used in bankruptcy law, particularly in the context of Chapter 7 liquidation. It helps clarify the rights of customers in relation to the assets held by a debtor. Understanding customer property is crucial for individuals involved in commodity trading or those who have accounts with commodity brokers. Users can manage relevant forms and procedures using legal templates from US Legal Forms.
Here are a couple of examples of abatement:
For instance, if a customer deposits cash with a commodity broker to trade futures contracts, that cash qualifies as customer property. If the broker goes bankrupt, the customer has a claim to that cash as it was held for their account.
(Hypothetical example) A customer who has a warehouse receipt for commodities stored with a broker would also have a claim to that receipt as customer property in the event of the broker's liquidation.
The primary statute governing customer property is 11 USCS § 761, which outlines the definition and scope of customer property in bankruptcy cases involving commodity brokers.
| Term | Definition | Difference |
|---|---|---|
| Customer Property | Assets held by a debtor for the benefit of customers. | Specifically pertains to assets related to commodity contracts. |
| Debtor Property | Assets owned by the debtor that are subject to claims. | Does not include assets held for customers. |
| Secured Property | Property pledged as collateral for a loan. | Focuses on collateral rather than customer-held assets. |
If you believe you have customer property at risk, it is essential to document your claims and understand your rights. You can explore ready-to-use legal form templates on US Legal Forms to help manage your situation. If the matter is complex, consider seeking professional legal assistance.
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Customer property refers to assets held by a debtor for the benefit of their customers, particularly in the context of commodity trading.