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Rules: If the creditor has a statutory or common law right, pursuant to state law, to reclaim the goods it sold to the debtor on credit, then if the bankruptcy court denies the reclamation, it is obligated to grant the creditor an administrative expense priority in the amount of the goods or a lien on the proceeds resulting from the use of those goods by the debtor. And, moreover, a secured creditor's claim does not defeat the creditor's right under either the Ohio Statutes or § 546(c)(2).
Holding: Affirmed.
Reasoning: "A priority in bankruptcy should not depend for its existence upon the contingency of whether specific assets are within the bankrupt's estate... It would certainly be unjust to subject to the payment of the debts of their fraudulent vendee, goods [the vendee] had improperly obtained from [the aggrieved vendors], and which in equity, [the vendors] were entitled to reclaim."
Facts: Deere Credit, Inc. (the "Creditor") filed a motion (the "Motion") for an allowance of an administrative claim pursuant to §§ 365(d)(5) and 503(b)(1)(A) based on (i) unpaid postpetition rent payments for the lease of a John Deere model 824J wheel loader with bucket (the "Property"), (ii) costs associated with repossessing and repairing the Property, and (iii) attorneys' fees. Prior to the Motion, the bankruptcy court had granted the Creditor's request to lift the stay and the Creditor repossessed and repaired the Property.
Issues: Standards for relief under §§ 365(d)(5); 503(b)(1)(A).
Rules: Section 365(d)(5) imposes a duty of timely performance on trustees and debtors in possession. Such duty is imposed notwithstanding § 503(b)(1), which eliminates "[(i)] any requirement for an order expressly authorizing payment of an administrative rent claim..., [(ii)] the 'actual and necessary' test under § 503(b)(1)... [(iii)] personal property lessors may assert administrative claims under § 365(d)(5) based upon the terms of the lease and not the benefit to the bankruptcy estate." Since there is not a specific remedy provided in § 365(d)(5), the lessor should seek a general remedy under the Bankruptcy Code, one of which is an administrative expense claim under § 503(b).
Holding: The request for an administrative claim for unpaid postpetition rent is allowed. The request for repairs and repossession costs and attorneys' fees is disallowed. Since the Debtor has neither filed a chapter 11 plan nor provided that it is insolvent, the Debtor shall pay the Creditor's claim immediately or file a chapter 11 plan.
Reasoning: Under certain facts, a court may deny a lessor's request for administrative payments once an order lifting the stay had been granted, this was not such a case since the lessor had not unreasonably delayed in repossessing the Property. With regard to the repossession and repair claims, the Creditor has the burden of proving when the harm to the Property occurred and whether it is recoverable under the terms of the lease of the Property. Under this lease, the cost of repossession is not recoverable. Additionally, the Creditor could not prove when the Property was damaged. The attorneys' fees request is also denied because they were not allowed under the lease. As for the Creditor's request for an administrative expense claim under § 503(b)(1)(A), because the Creditor failed to show that the Property was actual and necessary, it is not allowed.
Facts: Eight former employees of the debtor, on behalf of themselves and 256 other former employees (the "Claimants"), filed a motion requesting that the Court order the immediate payment of a portion of their proofs of claim (the "Claims") that seek recovery for wages and benefits, plus attorneys' fees, as Worker Adjustment and Retraining Notification ("WARN") Act damages. The
