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* Brown & Cole Stores, LLC v. Associated Grocers, Inc. (In re Brown & Cole Stores, LLC), 375 B.R. 873 (9th Cir. B.A.P Aug. 2007) (Montali, J.)27
Patch one hole, dig another: Creditor was entitled to allowance of its administrative expense claim, despite being fully secured. The claimant provided goods to the debtor within 20 days of the date of petition and requested the allowance of the claim as an administrative expense under new section 503(b)(9). The debtor objected, arguing that the claimant was fully secured and so should not also be entitled to administrative expense priority on the claim. The
B.A.P. disagreed. However, the panel first compared this new provision to section 503(b)(1)(B)(i),which allows secured tax claim as administrative expenses, "whether secured or unsecured." The additional "whether secured or unsecured" language was added to that section to resolve a similar issue, noted the court. New section 503(b)(9), however, was added by BAPCPA and did not contain the same "whether secured or unsecured" language. The panel was not disturbed by the absence of this language and concluded that the new statute was clear enough to allow the creditor's claim as an administrative expense, notwithstanding the claimant's dual status as a secured creditor. The dissent disagreed, noting that the majority's conclusion contradicted the debtor's ability to take advantage of the Code's cramdown provisions.
25
See Lummus Co. v. Commonwealth Oil Ref. Co., 297 F.2d 80, 89 (2d Cir. 1961); see also Don King Prods, Inc. v. Douglas, 742 F. Supp. 741, 755 (S.D.N.Y. 1990).
26
The court held that Connecticut common law was inapplicable. Instead, the bankruptcy court found New York's version of the UCC (prior to the revision) to be applicable.
27 Hon. Alan Jaroslovksy, Bankruptcy Judge for the Northern District of California, sitting by designation, concurred in part and dissented in part in a separately filed opinion.
