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HQ 223582

March 25, 1992

BON-2-CO:R:C:E 223582 SLR


Mr. John J. Sheppard
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.


William G. Rosoff, Chief
Entry Rulings Branch

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