Last Case Roundup for the time being

Unpaid Workers' Compensation insurance premia constitute priority claims In re Howard Delivery Serv., Inc., 403 F.3d 228 (4th Cir. 2005) Based on the plain meaning of §507(a)(4), because such payments are not voluntary but rather required by statute, and because such payments are not intended to constitute a substitute for wages, the 4th Circuit held that unpaid workers' compensation insurance premia were priority claims. The opinion acknowledged a significant split among reported cases. ____________________________ Prepetition claim not an "administrative" one In re Gasel Transportation Lines, Inc. (6th Cir. BAP 2005) An "administrative" claim must arise from a transaction with the Estate. A pre-Petition secured creditor does not have an administrative claim for reduction in the value of its collateral until it obtains a "liquidated" (e.g. adjudicated) right to adequate protection. Until then, reduction in the value of the collateral must be ascribed to the creditor's pre-Petition transactions with the debtor and cannot give rise to an administrative claim. Only after liquidation of its adequate protection claim can the creditor's damages be characterized as having arisen from a transaction with the Estate. __________________________ §506(c) Waiver not valid In re Inteliquest Media Corporation (10th Cir. BAP 2005) 10th Circuit BAP found that, although some Courts have found §506(c) waivers to be unenforceable or inappropriate, a waiver approved by the Bankruptcy Court and embodied in an Order was enforceable under principles of res judicata. _____________________________ Omissions on Schedules lacked "fraudulent intent" In re Pratt (5th Cir. 2005) Although there were several omissions on Debtor's Schedules, the Bankruptcy Court did not err in finding that the Debtor (who suffered from chronic drug problems) lacked fraudulent intent for the purposes of denial of a discharge.