Continuous Bond; Bankruptcy; Debtor in Possession

HQ 223582 March 25, 1992 BON-2-CO:R:C:E 223582 SLR CATEGORY: Entry/Bonds 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