In Re World Imports, Ltd., 862 F.3d 338

Two Chinese sellers (Haining and Fujian) shipped furniture to debtor World Imports under FOB terms from ports in China shortly before World Imports filed Chapter 11 on July 3, 2013.
Goods were shipped more than 20 days before the petition but physical possession in the U.S. occurred within 20 days of the petition date for at least some shipments.
Sellers sought administrative-expense priority under 11 U.S.C. § 503(b)(9) for goods “received by the debtor within 20 days before” the petition.
Bankruptcy and District Courts ruled that FOB delivery to a common carrier in China constituted constructive receipt (so sellers were not entitled to § 503(b)(9) priority).
Third Circuit reviewed whether “received” under § 503(b)(9) requires physical possession or can be satisfied by FOB delivery to a carrier; it affirmed that physical possession is required and reversed the lower-court rulings.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether “received” in 11 U.S.C. § 503(b)(9) means physical possession or includes constructive receipt upon FOB delivery to a common carrier	Sellers: receipt occurred when goods were shipped/FOB at origin (constructive receipt when risk/title passed)	Debtor: receipt is when goods were physically accepted in U.S.; lower courts said FOB to carrier was constructive receipt	Court held “received” requires physical possession by the buyer or its agent; delivery to a common carrier (FOB) is not constructive receipt because carriers are not agents

In re Marin Motor Oil, 740 F.2d 220 (3d Cir. 1984) (receipt under § 546(c) means taking physical possession; delivery to common carrier is not receipt)
Dewsnup v. Timm, 502 U.S. 410 (1992) (Congress does not legislate on a clean slate when amending bankruptcy laws)
Smith v. United States, 508 U.S. 223 (1993) (undefined statutory terms are construed by ordinary meaning)
Standard Oil Co. of N.J. v. United States, 221 U.S. 1 (1911) (words with well-known legal meanings are presumed used in that sense absent contrary context)
FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000) (statutory words must be read in context and with regard to overall statutory scheme)