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modification should have been sought within ten days under Rule 9023 (incorporating F.R. Civ. P. Rule 59), and was subject to modification only within the time limits and on the grounds specified in Rule 9023, incorporating F.R. Civ. P. Rule 60. The court also held that the common practice of providing notice of the first day order only after the fact, within 24 hours, satisfied due process. The court therefore declined to modify the wage order retroactively. But in doing so it commented that the debtor's officers and attorneys "owed the court a duty" to monitor this exception to Code priorities, should have provided cost estimates when the order was sought, and should have been "more selective and discriminating" because "not every employee was indispensable to its operation."
Paying Critical Prepetition Vendors.
A debtor may rely on certain vendors that either cannot be replaced should they refuse to supply, or whose willingness to supply goods on credit is essential to debtor's ability to survive or finance its operations. Sometimes such vendors are owed large prepetition unsecured debts, and threaten to refuse to continue supply goods even for contemporaneous cash payment (e.g., C.O.D. or letter of credit), or refuse to continue supplying on prepetition credit terms. The debtor may believe that either of these changes from prepetition business dealings would threaten the debtor's existence, and therefore seek permission to pay such vendors' prepetition unsecured claims in full, in order to maintain their supply of goods or their credit terms.
There is no express authority to be found in the Code to permit payment of such prepetition claims when other prepetition unsecured debts are not being paid, and are not likely to be paid in full under a plan. As noted above, there was such authority in railroad cases under the rule of necessity, which is frequently invoked together with the broad
