Judges of the Court
Administrative Expense — § 503
In re Imperial Credit Industries, Inc., 527 F.3d 959 (9th Cir. 2008)
A chapter 7 debtor’s obligation on a claim arising from a capital maintenance agreement with the FDIC under § 365(o) is not entitled to administrative expense priority, where it is specifically provided for under § 507(a)(9).
In re Wind N’ Wave, 509 F.3d 938 (9th Cir. 2007)
“. . .[C]reditors who receive compensation under 503(b)(4) should also be compensated for costs incurred in litigating a fee award, so long as the services meet the § 503(b)(4) requirements and the case “exemplifies a ‘set of circumstances’ where litigation was ‘necessary’”. . . .”
In re Hashim, 379 B.R. 912, 914 (9th Cir. BAP 2007)
“If a court does not authorize a creditor under 11 U.S.C. § 503(b)(3) to recover, for the benefit of the estate, property that was transferred or concealed by the debtor, the Federal Rules of Civil Procedure 17(a) and 19(a) require that the court realign as plaintiff a bankruptcy trustee who is a defendant.”
In re Brown & Cole Stores, LLC, 375 B.R. 873 (9th Cir. BAP 2007)
Secured creditors are entitled to the administrative expense priority allowed by § 503(b)(9). Because such claims arise prepetition, they may be subject to setoff under § 553(a) if all of the requirement of the statute are met.
In re Fowler, 394 F.3d 1208 (9th Cir. 2005)
“We hold that § 348(d) requires that postpetition employment tax debt, incurred as an administrative expense of a Chapter 11 bankruptcy estate, retains its first priority administrative expense status upon conversion to a Chapter 13 bankruptcy plan. Section 1305 is not in conflict with this holding because it does not govern the priority of the postpetition claims it allows into the bankruptcy.”
In re Metro Fulfillment, Inc., 294 B.R. 306 (9th Cir. B.A.P. 2003)
Penalty wages under Cal. Labor Code §§ 203 and 203.1 that arose out of postpetition work were entitled to an administrative expense priority.
In re BCE West, L.P., 319 F.3d 1166 (9th Cir. 2003)
An alleged breach of contract for failure to seek a non-disturbance agreement which ultimately resulted in alleged post-petition damages, is a breach of contract that arose pre-petition, and thus is not entitled to an administrative priority.
In re Microage, Inc., 291 B.R.503 (9th Cir. B.A.P. 2002)
§ 502(d) may be used to bar payment of administrative claims (such as the reclamation claim in this case), but not after the administrative claim has been allowed.
In re LPM Corp., 300 F.3d 1134 (9th Cir. 2002)
Post-petition rent claims do not have super-priority over other chapter 11 administrative claims or chapter 7 administrative claims.
In re Kadjevich, 220 F.3d 1016 (9th Cir. 2000)
Creditor's claim for attorney fees arising from a prepetition fraud action and postpetition loan costs were not entitled to administrative expense priority.
In re San Rafael Baking Co., 219 B.R. 860 (9th Cir. B.A.P. 1998)
Bankruptcy court may not award administrative priority payments to employee trust fund for period after expiration of debtor’s collective bargaining agreement
In re Abercrombie, 139 F.3d 755 (9th Cir. 1998)
Under chapter 11, claim for attorneys’ fees based on post-petition judgment arising from pre-petition contract does not qualify for priority as “administrative expense.”
In re Santa Monica Beach Hotel, Ltd., 209 B.R. 722 (9th Cir. B.A.P. 1997)
Postpetition contract must be construed to include all reasonable compensation to claimant provided under pre-petition contract
In re Endy, 104 F.3d 1154 (9th Cir. 1997)
Postconversion UST fees and Chapter 7 adm expenses prorated and have priority over Chapter 11 expenses when assets insufficient to pay all three
In re Allen Care Centers, 96 F.3d 1328 (9th Cir. 1996)
State’s costs in closing down nursing home not entitled to adm priority in absence of actual benefit to estate. Reading and Midlantic distinguished.
Irmas Family Trust v. Madden (In re Joseph E.Madden), 185 B.R. 815 ( 9th Cir. 1995)
Despite lack of benefit to estate, where debtor-in-possession continued pre-filing Breach of contract litigation against a defendant, the successful defendant was entitled to an administrative priority for the portion of the attorney’s fees incurred post-petition pursuant to attorneys’ fee clause in contract.
In re Dak Industries, 66 F.3d 1091 (9th Cir. 1995)
Executory contract as in nature of a lump sum sale of software rather than a grant of permission to use intellectual property as such was a prepetition debt not entitled to administrative priority
In re Sierra Pacific Broadcasters, 185 B.R. 575 (9th Cir. B.A.P. 1995)
Post-petition injury and postpetition worker’s compensation claim is administrative priority - no showing of benefit to estate necessary
In re World Sales, Inc. 183 B.R. 872 (9th Cir. B.A.P. 1995)
Where contributions to hsw fund required on a monthly basis, contract governs in determining administrative expense priority, even though employees only worked 18 of 31 days of the month, after which time business shut down
Carpenters Health & Welfare Trust Funds (In re Rufener Constr. Inc.), 53 F.3d 1064 (9th Cir. 1995)
Section 1113 limiting the power of a debtor to unilaterally terminate or modify terms of a collective bargaining agreement applies only in chapter 11 cases and not to chapter 7 cases. Therefore the unpaid contributions were not entitled to administrative expense status.
In re Pacific-Atlantic Trading Co., 27 F.3d 401 (9th Cir. 1994)
Rent accrued on nonresidential lease postpetition and pre-rejection gives rise to an administrative claim for the full amount of the rent accrued, regardless of the actual value conferred by the lease.
In re Palau Corporation., 139 B.R. 942 (9th Cir. B.A.P. 1992), aff’d, 18 F.3d 746 (9th Cir. 1994)
Award for postpetition wages not entitled to administrative expenses - estate received no benefit
In re Carolina Triangle Ltd. Partnership, 166 B.R. 411, 415 (9th Cir. B.A.P. 1994)
Post-petition real property taxes are not administrative expense under 503(b)(1)(B) if Trustee abandons the property. The property taxes created in rem liability against the property but not in personam liability against the estate, and as such, the property taxes were incurred by the property, not by the estate
In re Hooker Investment, Inc., 145 B.R. 138 (Bankr. S.D.N.Y. 1992)
Golden parachute not entitled to administrative expense priority
see also In re Selectors, Inc. 85 B.R. 843 (9th Cir. B.A.P. 1988)
In re Texscan, 107 B.R. 227 (9th Cir. B.A.P. 1989), aff’d, 976 F.2d 1269 (9th Cir. 1992)
fn. 4 - ins. carrier claims based on employees' post-petition injuries are adm
In re Glasply Marine Industries, Inc., 971 F.2d 391 (9th Cir. 1992)
In re Riverside-Linden Investment Co., 945 F.2d 320 (9th Cir. 1991)
Chapter 7 case - interest on attorney fee claim accrued from date fees awarded by bankruptcy court not from date fees invoiced
In re D. Papagni Fruit Company, 132 B.R. 42 (Bankr. E.D. Cal. 1991)
Under Cal. Law, property taxes are in rem
In re Johnson, 901 F.2d 513 (6th Cir. 1990)
60 day bar date for filing of claims in a Chapter. 7 conversion from Chapter. 11 to Chapter. 7 applies to administrative expenses from Chapter. 11
In re MacNeil, 907 F.2d 903 (9th Cir. 1990)
Absent factual determination whether certain secured creditors entitled to 11 U.S.C. § 507(b) superpriority, unempowered advisory opinion rendered
In re Mark Anthony Const. Inc., 886 F.2d 1101 (9th Cir. 1989)
Interest on post-petition taxes = 503(b) priority
In re Blumer, 95 Bankr 143 (9th Cir. B.A.P. 1988) aff’d, 826 F.2d 1069 (9th Cir. 1987)
Goods supplied in ordinary course of business
In re Dant & Russell, Inc. 853 F.2d 700 (9th Cir. 1988) - complete review of subject
In re Thompson, 788 F.2d 560, 563 (9th Cir. 1986)
Starting point is terms of the lease, but "reasonable value of the use to the debtor” is the standard
In re Spruill, 78 B.R. 766 (Bankr. E.D.N.C. 1987)
Where Trustee opposed a relief from stay motion before abandoning the property, lender was injured as consequence;(thus, in equity, property taxes could be treated as administrative expense)
In re Verco Industries, 20 B.R.664 (9th Cir. B.A.P. 1982)
Timing of payment of administrative claims is within the discretion of the court
In re Western Farmers Ass’n, 13 B.R. 132 (Bankr. W.D. Wash. 1981)
When remaining administrative claims will not be paid in full, attorney fees should not be paid ahead of reclamation creditors
however, Westside Printworks held that attorney fees are allowed under 365(b)(1)(B), although JN is not sure this holding is right