BON-2-CO:R:C:E 223582 SLR
Mr. John J. Sheppard
Attorney-in-Fact
American Motorists Insurance Company
One World Trade Center, Suite 2121
New York, NY 10048
RE: Continuous Bond; Bankruptcy; Debtor in Possession
Dear Mr. Sheppard:
This is in response to your November 15, 1991 letter
regarding continuous bonds and Chapter 11 bankruptcy.
According to your letter:
1) Importer ABC Company has a continuous bond in effect
from 01-02-90 to 01-01-91.
2) Importer files Chapter 11 on 06-01-90.
3) Court approves bankruptcy and issues a notice that
ABC Company, Inc., is D.I.P. (debtor in possession).
4) Broker makes an entry on 06-02-90 in the name of
ABC Company, Inc.
You posit that if the name is now ABC Company, Inc., D.I.P.,
then it is a different corporation and a new bond must be filed.
We disagree.
A debtor in possession is the same legal entity as the
prebankruptcy company. NLRB v. Bildisco & Bildisco, 465 U.S.
513, 104 S.Ct. 1188 (1984). Consequently, an entry could be made
using the existing bond as security. There would be no need
for Customs to cancel the existing bond or to demand added
security. Additionally, as "debtor in possession" status does
not result in a company name change, a rider need not accompany
the existing bond.
Sincerely,
William G. Rosoff, Chief
Entry Rulings Branch