In Re Momenta, Inc.
455 B.R. 353
Bankr. D.N.H.2011Background
- Debtor Momenta, Inc. filed chapter 11 on Oct 23, 2010; Ningbo Chenglu filed an admin expense motion for $163,527.95 on Dec 6, 2010.
- Goods were ordered from Ningbo and delivered to the Debtor or its customers under six invoices, including drop shipments and samples.
- Drop shipments to Felixstowe, Southampton, and Montreal lack documentation on disposition after arrival.
- Samples and invoices 4104 and 4102 were delivered to Debtor or its warehouse, creating an admin expense of $23,070.95 acknowledged by the Debtor.
- Debtor concedes all shipments occurred within 20 days before filing; dispute centers on whether Drop Shipments were “received by the debtor” for §503(b)(9) and potential §502(d) disallowance.
- Court has core jurisdiction under 28 U.S.C. §§ 1334, 157(a).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Drop Shipments were ‘received by the debtor’ under §503(b)(9). | Ningbo: goods delivered to debtor or custodian count as received. | Debtor: no constructive possession; not received. | No §503(b)(9) claim for Drop Shipments; not received by debtor. |
| Whether any §503(b)(9) admin claim may be disallowed under §502(d). | §502(d) applies to all claims, including admin expenses. | §502(d) cannot disallow admin expenses; §503(b) governs admin claims. | §502(d) does not disallow §503(b)(9) admin claims; Ningbo’s $23,070.95 allowed. |
Key Cases Cited
- In re Doolan, 447 B.R. 51 (Bankr.D.N.H.2011) (mutual undisputed facts treated as factual record for law issues)
- In re Circuit City Stores, Inc., 432 B.R. 225 (Bankr.E.D.Va.2010) (interprets receipt/received in context of UCC and reclamation)
- Marin v. Motor Oil, 740 F.2d 220 (3d Cir.1984) (constructive possession under UCC 2-705 informs receipt for reclamation)
- In re Coast Trading Co., 744 F.2d 686 (9th Cir.1984) (delivery to third party affects reclamation right)
- In re Dana Corp., 367 B.R. 409 (Bankr.S.D.N.Y.2007) (pre-BAPCPA context linking 503(b)(9) with reclamation)
- In re Ames Dep't Stores, 582 F.3d 422 (2d Cir.2009) (502(d) not applicable to admin claims; statutory interpretation)
- In re MicroAge, Inc., 291 B.R. 503 (9th Cir. BAP2002) (debate over 502(d) scope with admin claims)
- In re Circuit City Stores, Inc., 426 B.R. 560 (Bankr.E.D.Va.2010) (addressed Rule 3003(c) and admin claim filing)