In re Buffets, LLC, 597 B.R. 588

Debtors (Buffets, LLC and affiliates) filed chapter 11 on March 7, 2016; plan confirmed April 27, 2017, with substantive consolidation and post-confirmation quarterly UST fees provided for.
Congress amended 28 U.S.C. § 1930(a)(6)(B) (effective FY2018–2022) raising the quarterly cap to the lesser of 1% of disbursements or $250,000 for quarters with disbursements ≥ $1,000,000 when the UST System Fund balance is < $200 million.
Reorganized Debtors argued “disbursements” should be limited to distributions to creditors/priority/admin claims and moved to fix quarterly-fee liability at $4,875 per quarter; UST contended “disbursements” is broad and sought $250,000 per quarter.
The court initially ruled “disbursements” includes all payments by the reorganized debtor but later found the § 1930(a)(6)(B) amendment invalid as applied to the Debtors for constitutional reasons.
Court held the 2017/2018 increase violated the Uniformity Clause as applied to the first three quarters of 2018 (fee applied in UST districts but not BA districts until Oct. 1, 2018) and that retroactive application to a confirmed case violates the presumption against retroactivity and Due Process.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Proper definition of “disbursements” under § 1930(a)(6)	Narrow: only payments to creditors/administrative/priority claims (so low fees)	Broad: all transfers/payments by the estate (including ordinary-course)	Court: term generally includes all payments; broad definition reaffirmed
Validity under the Uniformity Clause	Amendment non-uniformly applied (UST districts first; BA districts later) and thus unconstitutional as applied	UST: statutory scheme and later JCUS action cured uniformity concerns; challenge fails	Court: increase violated Uniformity Clause for first three quarters of 2018; apply prior uniform fee ($30,000) for those quarters
Retroactivity / presumption against retroactive application	Amendment imposes new liability on a confirmed plan; Congress gave no clear intent to apply retroactively	UST: notice and subsequent administrative actions support application	Court: statute not intended to reach pending/confirmed cases; retroactive application barred by Landgraf; fee increase not applied to those quarters
Due Process / takings/user-fee challenge	Retroactive application and extreme fee increase deny fair notice and impair vested rights under confirmation; fee is disproportionate	UST: administrative notice and statutory scheme justify assessment	Court: retroactive imposition would violate Due Process; applied presumption against retroactivity to protect plan expectations

In re Danny's Markets, Inc., 266 F.3d 523 (6th Cir.) (broad definition of disbursements)
In re Celebrity Home Entm't, Inc., 210 F.3d 995 (9th Cir.) (expansive “all payments” interpretation of disbursements)
In re Jamko, Inc., 240 F.3d 1312 (11th Cir.) (post-confirmation fees include all post-confirmation disbursements)
St. Angelo v. Victoria Farms, Inc., 38 F.3d 1525 (9th Cir.) (BA/UST fee divergence violates Uniformity Clause)
In re Cranberry Growers Coop., 592 B.R. 325 (Bankr. W.D. Wis.) (limited disbursement holding for revolving credit repayments)
Landgraf v. USI Film Prods., 511 U.S. 244 (presumption against statutory retroactivity and analysis framework)
Marbury v. Madison, 5 U.S. 137 (establishing Constitution governs ordinary acts)
Usery v. Turner Elkhorn Mining Co., 428 U.S. 1 (retroactivity and Due Process concerns)
Holywell Corp. v. Smith, 503 U.S. 47 (confirmations create vested rights)