570 B.R. 530
Bankr. W.D. La.2017Background
- Debtor obtained a final decree and the Chapter 11 case was closed on April 1, 2015.
- The case was reopened on November 20, 2015 to allow sale of real property and cancellation of SBA liens; sale and lien actions completed and proceeds were deposited then released from the court registry.
- After reopen, the U.S. Trustee asserted the debtor failed to pay quarterly Chapter 11 fees required by 28 U.S.C. § 1930(a)(6).
- U.S. Trustee moved to convert the case to Chapter 7 or dismiss for nonpayment of quarterly fees.
- Debtor argued fees were not owed because the case had been fully administered and was reopened only for a narrow, limited purpose.
- Bankruptcy court considered statutory text and prior precedent about administratively closed cases, then ruled on whether fees were due for the reopened case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether quarterly U.S. Trustee fees under 28 U.S.C. § 1930(a)(6) are owed after a Chapter 11 case is reopened | Fees are due for every quarter a Chapter 11 case is open, including after reopening | No fees owed because the case was fully administered and reopened only for a narrow purpose (sale/distribution to SBA) | Quarterly fees are due once the case is reopened and remains open until converted or dismissed |
| Whether the court may craft a narrow exception to § 1930(a)(6) for cases reopened for limited tasks | Statute’s plain text controls; no textual basis for exceptions | An equitable, policy-based exception should apply when only ministerial acts remain | Court refused to create a policy-based exception; enforced plain statutory text |
| Remedy for failure to pay required quarterly fees | U.S. Trustee seeks conversion or dismissal under 11 U.S.C. § 1112(b)(4)(E) | Debtor seeks relief from conversion/dismissal because fees not owed | Debtor has 30 days to pay past due fees; otherwise U.S. Trustee may seek conversion or dismissal |
| Effect of prior administrative closure/final decree on fee obligation after reopening | Reopening revives live case status; fees resume | Final decree/administrative closure ended fee obligations permanently | Administrative closure stops fees only while case closed; reopening restores fee obligation |
Key Cases Cited
- Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1 (2000) (statutory text must be enforced according to its plain meaning)
- In re Burk Dev. Co., Inc., 205 B.R. 778 (Bankr. M.D. La. 1997) (administratively closed cases are treated as not being live Chapter 11 cases for quarterly-fee purposes)