Section 1113(f) of the bankruptcy code limits the power of a bankrupt company to unilaterally terminate or modify the terms of a collective bargaining agreement. Some courts have found that this provision also affects the priority accorded debts payable under a collective bargaining agreement in the bankruptcy priority scheme. In this case, we decide whether § 1113(f) applies to bankruptcies filed under Chapter 7 of the Code. We hold that it does not.
BACKGROUND
Rufener Construction Co. filed a Chapter 7 bankruptcy petition. Over the following two months, the Operating Engineers Trust Funds and the Carpenters Trust Funds (hereinafter “Trust Funds”) filed separate claims against the estate totaling almost $75,-000. The claims were for employee benefit contributions payable under collective bargaining agreements. The agreements required contributions to employee benefit trust funds on the basis of hours of work performed. The Trust Funds sought payment for work performed prior to the bankruptcy filing and asserted priority status for the claims. The Trustee objected. During discovery, the Trustee learned that the claim of priority status was based on § 1113(f) of the Code rather than § 507, the provision that usually governs claims for wages and benefits. After a full hearing, the bankruptcy court denied priority status holding that § 1113(f) is inapplicable to Chapter 7 proceedings. The Trust Funds appealed to the district court' briefing solely the issue of whether § 1113(f) applies to Chapter 7. The district court affirmed, and this further appeal followed.
ANALYSIS
I.
Under any construction of the statutory provision at issue, the Trust Funds remain entitled to. assert their claims against the estate for the amounts owed. However, unless they are awarded priority status for their claims, the funds available for disbursement to creditors may be. exhausted before the Trust Funds receive any payment. The bankruptcy code establishes a detailed priority scheme for the payment of unsecured claims. All claims at a particular priority level are paid on a pro rata basis; however, claims of a particular priority level are not paid until all claims of a higher priority have been satisfied. Thus, it is important to the Trust Funds to establish the highest possible priority for their claims.
The Trust Funds contend that § 1113(f) covers their claims and affords them super-priority status. Although the super-priority status issue was vigorously disputed before the bankruptcy court, that court’s determination that § 1113(f) has no applicability to a Chapter 7 proceeding obviated the need for it to resolve the dispute. Similarly, the district court did not need to consider that issue.
No provision of this title shall be construed to permit a trustee to unilaterally terminate or alter any provisions of a collective bargaining agreement prior to compliance with the provisions of this section.
11 U.S.C. § 1113(f).
The Trust Funds argument centers on the first five words of the provision — “No provision of this title.” The “title” in this phrase means Title 11, which encompasses the entire bankruptcy code. The Trust Funds argue that under the plain language of the statute, no provision of the entire bankruptcy code may be construed to permit the unilateral termination of a collective bargaining agreement absent compliance with the provisions of § 1113. Under their reading all collective bargaining agreements are protected by § 1113(f), regardless of the chapter under which the debtor files bankruptcy.
In response, the Trustee points to the plain language of § 103(f). Section 103 is found in chapter 1 of the code. This chapter is entitled “General Provisions,” and section 103 is captioned “Applicability of chapters.” Section 103(f) provides:
Except as provided in section 901 of this title,3 subchapters I, II, and III of chapter 11 of this title apply only in a case under such chapter.
11 U.S.C. § 103(f). The Trustee argues that because § 1113 falls within subchapter I of Chapter 11, under the plain language of § 103(f), provision 1113(f) is limited to Chapter 11 bankruptcies.
The Trust Funds reply that “no provision of this title” necessarily includes § 103(f). In their view, § 103(f) cannot be construed as limiting the applicability of § 1113(f) to Chapter 11 cases because if § 1113(f) were so limited, Chapter 7 trustees would be free to unilaterally terminate collective bargaining agreements. This construction of § 103(f) would, they argue, necessarily violate the plain language of § 1113(f). Because this construction places § 103(f) and § 1113(f) in conflict, the Trust Funds argue that § 103(f) must yield under the rule that the more recent enactment prevails. In support of this argument, the Trust Funds cite numerous cases construing § 1113(f) broadly and holding that some provision of the Bankruptcy Code must give way to § 1113(f). However, all of the cases they cite for this proposition involve Chapter 11 bankruptcies.
Both parties’ arguments present plausible constructions of the statute, and both arguments rely heavily on “plain language” theories of interpretation. However, both parties cannot prevail, and we must go beyond a cursory textual analysis to determine the correct construction of the statute. A more rigorous examination of the statutory text reveals that the Trust Funds misunder
Reading § 1113 as a whole, without simply focusing on § 1113(f), it is clear that its provisions do not apply to Chapter 7 proceedings. First, the language of the provisions embraces concepts incompatible with Chapter 7 proceedings. Subsection (a) describes a “trustee” as used in § 1113 as one that “has been appointed under the provisions of this chapter” — i.e. a Chapter 11 trustee. Moreover, subsections (a) through (e), make explicit reference to the “debtor in possession,” a concept of Chapter 11 not Chapter 7.
Second, the procedural requirements imposed by § 1113 appear ill-suited to a liquidation proceeding. Many of the provisions of the section are premised on the notion that the company is still conducting business. The section regulates the manner in which collective bargaining agreements may be implemented, modified, or terminated during the period of reorganization — a period in which the active business of the debtor proceeds apace.
Viewing all of the component sections of § 1113 together, we are compelled to reject the Trust Funds’ construction of the statute. Although the line between plain and ambiguous is not always clear, we conclude that the meaning of § 1113(f) is “plain” in that this provision is plainly inapplicable to Chapter 7 proceedings. Because the text of § 1113 shows that subsection (f) of that provision applies only to Chapter 11 bankruptcies, we need not rely on other provisions of the bankruptcy code for additional guidance.
II.
The Trustee argues that the Trust Funds’ appeal is frivolous, and he seeks attorneys’ fees under Federal Rule of Appellate Procedure 38.
However, the absence of authority may cut the other way. See, e.g. Jaeger v. Canadian Bank of Commerce,
CONCLUSION
A careful analysis of § 1113 in its entirety shows that the section, including § 1113(f), applies only to bankruptcies filed under Chapter 11. Accordingly, the district court’s order is affirmed. Each side shall bear its own costs.
AFFIRMED.
Notes
. There is a split of authority on this issue: whether claims which fall within the ambit of § 1113(f) are entitled to "super-priority" status. Compare In re Unimet Corp.,
. Only one prior case involved the application of § 1113(f) and a Chapter 7 bankruptcy. See In re St. Louis Globe-Democrat, Inc.,
All other courts and commentators that have mentioned the Chapter 7 issue have simply assumed that § 1113 did not apply to such proceedings without analyzing or discussing, the question in detail. See, for example, In re Roth American,
. Chapter 9 of the Bankruptcy Code governs the adjustment of debts of municipalities. Section 901 sets out which provisions of Title 11 apply to filings of municipalities.
. But cf. In re St. Louis Globe Democrat,
. For example, portions of § 1113(e) provide: "If during the period when the collective bargaining agreement continues in effect, and if essential to the continuation of the debtor's business, or in order to avoid irreparable damage to the estate, the court ... may authorize the trustee to implement interim changes in the terms, conditions, wages, benefits, or work rules provided by a collective bargaining agreement.”
. Moreover, as pointed out by the district court, if Congress intended § 1113 to have general applicability, it made little sense to place it in Chapter 11 of the code rather than Chapter 1 which contains all of the other provisions of general application.
.In this case, we could stop our inquiry at a purely textual analysis of the statute; however, it is sometimes helpful to examine legislative history to ensure that the result we reach by our interpretation of the language of the statute is not wholly contrary to the statutory purpose. The little legislative history available for § 1113 supports our construction. While there is no authoritative legislative history or committee report for § 1113, a review of the Congressional Record reveals some helpful comments. The proponents of the amendment to the code continually referred to its application in "reorganization” cases. The term “reorganization” is a creature of Chapter 11 bankruptcy. Although this does not demonstrate that the legislators affirmatively wanted to restrict § 1113 to Chap
. This rule, captioned "Damages for Delay” states:
If a court of appeals shall determine that an appeal is frivolous, it may award just damages and single or double costs to the appellee.
F.R.A.P. 38.