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203 § 741(3). Such securities may be excluded from the customer property pool, and, upon satisfaction of any negative net equity balance, a customer is entitled to return of its customer name securities. 11 U.S.C. §§ 748, 751. Section 748 of the Bankruptcy Code provides that all securities held by the debtor as property of the estate, other than customer name securities, are to be liquidated consistent with market practice as soon as practicable after the bankruptcy filing. This would include any securities that are customer property. 11 U.S.C. § 750. Thus, in a Chapter 7 liquidation, all securities (other than customer name securities) are to be promptly reduced to cash (with such cash distributed to customers and general creditors, as applicable). In a SIPA liquidation, however, the SIPA trustee is required, to the greatest extent possible, to distribute actual securities to the customers entitled to them. 11 U.S.C. §§ 748, 750; 15 U.S.C. § 78fff-1(b)(1). In fact, in certain circumstances in a SIPA liquidation, the SIPA trustee may be required to purchase securities for distribution to customers. 15 U.S.C. § 78fff-2(d). Moreover, a SIPA trustee may effectuate a bulk transfer of customer accounts to another member of the Securities Investor Protection Corporation (or "SIPC") with the approval of SIPC, but without the need for customer consent. 15 U.S.C. § 78fff-2(f). This mechanism enables a SIPA trustee to expeditiously satisfy customer net equity claims, while minimizing possible customer market losses arising from the customer's inability to trade securities in its account during the pendency of the proceeding. 114 Procedurally, a SIPA proceeding differs from a Chapter 7 case in that, rather than the filing by the debtor of a petition with a bankruptcy court, a SIPA liquidation is commenced when SIPC files an application and complaint in Federal district court. Such a filing by SIPC automatically stays any liquidation proceeding previously commenced by the debtor under Chapter 7. 11 U.S.C. 114 In addition, customers in a SIPA proceeding are at least partially protected from shortfalls in customer property through payments from the SIPC reserve fund. Some broker-dealers have purchased insurance coverage (e.g., CAPCO) for customer losses above the SIPC coverage limits.

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