Clyde Bergemann, Inc. (“Bergemann”), appeals the district court’s affirmance of the bankruptcy court’s order authorizing a post-petition financing agreement between The Babcock and Wilcox Company, Inc. (“B&W”), Diamond Power International, Inc. (“Diamond Power”), Babcock & Wilcox Construction Co., Inc., Americon, Inc. (collectively, the “debtors”), and Citicorp North America, Inc. (“CNA”). Finding no errоr, we affirm.
I.
Bergemann, a competitor of Diamond Power’s, filed in 1999 a patent infringement suit, which is currently pending, seeking $52 million damages. In February 2000, the debtors filed voluntary chapter 11 petitions in response to unrelated
Under that agreement, the debtors received a $300 million line of credit and the ability to procure letters of credit, which allowed them to continue doing business. The agreement gave CNA a security interest in the debtоrs’ assets: Any funds borrowed under the line of credit would give rise to a claim against the assets of all debtors, which claim would be accorded super-priority administrative expense status against all unsecured creditors of each debtor.
The bankruptcy court granted the DIP financing motion in an interim order, to which Bergemann objected on the grounds generally that the interests of other creditors would be unfairly subordinated to CNA and specifically that the assets of Diamond Power might be exposed to claims by CNA.
In March 2000, after a hearing, the bankruptcy court issued a final order (the “DIP financing order”) finding that the DIP financing agreement was necessary to the collective health of the debtors and that all the debtors would bеnefit from the agreement and authorizing the amended DIP financing agreement over Bergem-
II.
We review a bankruptcy court’s conclusions of law de novo and findings of fact for clear error. Traina v. Whitney Nat’l Bank,
A.
Bergemann contends that the DIP financing order is improper because it substantively consolidates the debtors without following required рrocedures. Substantive consolidation is one mechanism for administering the bankruptcy estates of multiple, related entities,
The bankruptcy court’s order authorized only a pre-confirmatiоn financing arrangement involving all the debtors and from which each of the debtors benefits.
Moreover, the order fails to exhibit any other properties commonly characterizing substantive consolidation: It neither extinguishes inter-debtor claims nor combines each dеbtor’s creditors for purposes of voting on a reorganization plan. Bergem-ann’s claim has not been consolidated with those of the other debtors’ unsecured creditors, and Bergemann’s recovery has not been limited to a pro-rata share equal to that of the other unsecured creditors. Almost none of the elements characteristic of a substantive consolidation order is present in the bankruptcy court’s order. Thus, the order does not effect a substantive consolidation, defacto or otherwise.
B.
Bergemann argues that the DIP financing order is invalid because it violates the absolute priority rule, embodied by 11 U.S.C. § 1129(b)(2)(B), which outlines the requirements for confirming a chapter 11 plan:
The court shall confirm a plan only if all of the following requirements are met:
With respect to a class of unsecured claims—
(i) the plan provides that each holder of a claim of such class receive or retainon aсcount of such claim property of a value, as of the effective date of the plan, equal to the allowed amount of such claim; or
(ii) the holder of any claim or interest that is junior to the claims of such class will not receive or retain under the plan on account of such junior claim or interest any property.
(Emphasis added.) By its plain text, the absolute priority rule applies only to the confirmation of a chapter 11 plan — section 1129 is entitled “Confirmation of plan”— and therefore is inapplicable to the pre-confirmation DIP financing order.
Bergemann avers that the bankruptcy court attempted “to do outside a plan what it cannot do in a plan,” citing In re Braniff Airways, Inc.,
Braniff stands merely for the proposition that the provisions of § 363 permitting a trustee to use, sell, or lease the assets do not allow a debtor to gut the bankruptcy estate before reorganization or to change the fundamental nature of the estate’s assets in such a way that limits a future reorganization plan. The DIP financing agreement contemplates neither of those functions; it merely allows the debtors to obtain thе credit necessary to their continued vitality as going entities, pledging their assets as security for the credit. It neither changes the fundamental nature of the assets nor limits future reorganization options. Braniff does not compel application of the absolute priority rule in this case.
Bergemann cites two additional cases for the proposition that the absolute priority rule aрplies in the pre-confirmation context; neither is persuasive.
Even were we persuaded that the absolute priority rule permissibly could be extended to pre-confirmation financing arrangements, we would decline to do so here. The debtors established the necessity of the agreement, which included a provision protecting — at least in part — the interests of the existing creditors. In addition, Bergemann is an unsecured creditor that has not yet even prevailed on the suit underlying its claim. As the district court noted, “it is speculative whether Bergemann’s claim will exist by the time this case reaches plan confirmation and whether the absolute priority rule would ever be invoked in this case.” Thus, the bankruptcy court did not err in failing to apply the absolute priority rule.
C.
Bergemann contends the financing agreement should not have been approved because it is effectively a fraudulent conveyance of Diamond Power’s assets. The district.court refused to address the merits of the argument, finding it waived. We agree.
To preserve an issue for appeal, a party must raise it before the trial court:
Citing cases that may contain a useful argument is simply inadequate to preserve that argument for appeal; “to be preserved, an argument must be pressed, and not merely intimated.” In short, the argument must be raised to such a degree that the trial court may rule on it — a standard that clearly was not met in the instant case. The argument here was not even identified by name, much less advocated.
Matter of Fairchild Aircraft Corp.,
Bergemann’s brief to the bankruptcy court plainly argued two distinct theories: that the DIP finanсing agreement was a de facto substantive consolidation and that the agreement violated the absolute priority rule. Although Bergemann contends that it raised the issue of fraudulent conveyance sufficiently to avoid waiver, it can point to no assertion before the bankruptcy court that meets Fairchild Aircraft’s strict standard. Bergemann admits that it referred to the issue only in passing — as part of its substantive cоnsolidation argument — but reasons nonetheless that it preserved the issue by quoting two cases in its bankruptcy court brief: One expressed concern that “an overagressive approach [to substantive consolidation] could lead to a series of fraudulent conveyances being considered a commingling of assets that may justify substantive consolidation”;
Neither quotation identified the issue of fraudulent conveyance sufficiently for the bankruptcy court to rule on it — one quotation used the term “fraudulent conveyance,” but in an irrelevant context, and the other failed even to identify the rеlevant legal theory. Moreover, the quotations were accompanied by no discussion regarding how that theory applied to the DIP financing agreement. Instead, the unexplained quotations were buried in a section supporting a related, but distinct, argument.
The bankruptcy court could not have been expected to rule on the issue on the basis of those quotations alone. Bergem-ann waived the issue of whether the DIP financing agreement is a fraudulent conveyance.
AFFIRMED.
Notes
. Diamond Power, Americon, Inc., and Bab-cock & Wilcox Construction Co., Inc., are subsidiaries of B&W.
. The security interest is authorized by 11 U.S.C. § 364(c), which specifies that
[i]f the trustee is unable to obtain unsecured credit allowable under section 503(b)(1) of this title as an administrative expense, the court, after notice and a hearing, may authorize the obtaining of credit or the incurring of debt—
(1) with priority over any or all administrative expenses of the kind specified in section 503(b) or 507(b) of this title;
(2) secured by a lien on property of the estate that is not otherwise subject to a lien; or
(3) secured by a junior lien on property of the estate that is subject to a lien.
. Bergemann contends that Diamond Power owns substantial assets outright; Bergemann thus fears that the DIP financing agreement might allow creditors of the оther debtors— including CNA — to reach assets that Diamond Power otherwise would be able to use to satisfy a potential judgment in Bergemann’s favor.
.As amended, the DIP financing agreement stipulates,
To the extent any Debtor (a “Funding Debt- or”) makes aggregate payments to Lenders in excess of the aggregate amount of all loans and advances received by such Funding Debtor from Lenders after the Petition Date, then such Funding Debtor, after the payment in full of the Obligations and termination of the Commitments, shall be entitled to a claim under Section 364(c)(1) of the Bankruptcy Code against each other Debtor, in such amount as may be determined by the Bankruptcy Court taking into account the relative benefits received by each such person, and such claims shall be deemed to be an asset of the Funding Debt- or; provided that such claim shall be subordinate and junior in all respects to the su-perpriority claims of the Lenders set forth herein.
. Because it is a judicial creation, the contours of substantive consolidation are indefinite; it "usually results in, inter alia, pooling the assets of, and claims against, the two entities; satisfying liabilities from the resultant common fund; eliminating inter-company claims; and combining the creditors of the two companies for рurposes of voting on reorganization plans.” In re Augie/Restivo Baking Co., Ltd.,
. The bankruptcy court did administratively consolidate the debtors’ estates. Administrative consolidation is merely a procedural devise used to deal efficiently with multiple estates, however, while substantive consolidation affects the substantive rights of the parties and therefore is subject to heightened judicial scrutiny. 1 William L. Norton, supra, § 20:5.
. We addressed a similar theory — albeit under different facts—in Matter of Tex. Extrusion Corp.,
The other two cases to use the term bear no reasonable relationship to the facts of this case. In In re Knobel,
. In support of the DIP financing motion, the debtors introduced an аffidavit by B&W's Chief Restructuring Officer, who testified that the DIP financing agreement was critical to the continued vitality of each of the Debtors. Bergemann notes that the debtors failed to present evidence that Diamond Power, apart from the other debtors, needed to obtain credit under the DIP financing agreement and argues from that premise that the bankruptcy court erred in authorizing the agrеement. In its written objection to the DIP financing motion, however, Bergemann failed to argue the need for any such individualized showing, other than stating that "Diamond Power did not require the $300 million in working capital" available under the agreement.
While probably true, that assertion fails to account for the other benefits described in the affidavit, including each debtor’s need for letters of credit — which the agreement would provide — to continue doing business. Weighing Bergemann’s lone, unsupported assertion against the debtors’ detailed affidavit, we cannot say the bankruptcy court committed clear error in finding that Diamond Power, like the other Debtors, would benefit under the agreement.
. Whether Bergemann is adequately protected pursuant to the bankruptcy court’s order is not relevant to the issues addressed in this appeal. See infra note 12.
. Notably, Braniff mentioned the absolute priority rule only when referring to the requirements the parties must meet in "[a]ny future attempts to specify the terms whereby a reorganization plan is to be adopted.” Braniff,
. See In re Regency Holdings (Cayman),
.Furthermore, 495 Central Park involved a financing transaction under § 364(d), which requires "adequate protection” of senior lien-holders. In contrast, the financing agreement in this case is authorized by § 364(c), which does not require adequate protection. See In re Garland Corp., 6 B.R. 456, 462 (1st Cir.BAP1980). Likewise, Bergemann is an unsecured creditor, not a senior lienholder, and thus would not be entitled to adequate protection even under § 364(d). See In re Simasko
. In re Creditors Serv. Corp.,
. In re Lawrence Paperboard Corp.,
. Even if Bergemann had not waived the issue of fraudulent conveyance, its argument, which is premised on the proposition that Diamond Power received no benefit from the DIP financing agreement, is without merit. As discussed supra note 8, the bankruptcy court properly found as a matter of fact that Diamond Power needed and benefited from the agreement.