Univеrsal Seismic Associates, Inc. and its subsidiaries (collectively referred to as “Debtors”) were providers of three-dimensional seismic acquisition and processing services to the energy industry. On September 7, 1999, Debtors filed voluntary petitions under Chapter 11 of the Bankruptсy Code. Debtors’ Chapter 11 plan was confirmed by an order entered May 3, 2000. The terms of the Debtors’ confirmed plan of reorganization specifically provided for the retention of jurisdiction by the Bankruptcy Court to “determine the allowance or disallowance of Claims and Interests,” including the claims filed by Harris County/City of Houston and Katy Independent School District (the “Taxing Authorities”). On October 12, 1999, the Tаxing Authorities filed -proofs of claim in the amounts of $33,731.06 (Harris County) and $47,050.11 (Katy Independent School District). Each of the proofs of claim filеd by the Taxing Authorities was for ad valorem business personal property taxes for the tax years 1998 and 1999. The Taxing Authorities alleged a security interest in the business personal property of the Debtors to secure payment of their claims.
*207 The Debtors had equipment thаt was purchased or leased from third parties in connection with their business. Soon after filing for bankruptcy, the Debtors returned almost all personal property to secured creditors/lessors pursuant to agreements and orders of the Bankruptcy Court. The Debtors retained only some vehicles, which were sold for $54,500.00, and office furnishings valued at $3,700.00, equaling a combined value of $58,200.00. The total of the claims filed by the Taxing Authority, $81,054.73, was far in excess of the total value of the remaining personal property, but the Taxing Authorities contendеd this property remained encumbered by their tax lien, up to the full value of the remaining property. The Bankruptcy Court agreed and the District Court affirmed. For the reasons set forth below we also affirm.
This Court applies the same standard of review as the district court does reviewing the Bankruptcy Court’s factual findings for clear error and its legal conclusions and mixed questions of fact and law under а
de novo
standard.
In re Mercer,
(a) On January 1 of each year, a tax lien attaches to property to secure the payment of all taxes, penalties, and interest ultimately imposed for the year on the property, whether or not the taxes are imposed in the year the lien attaches. The lien exists in favor of each taxing unit having power to tax the property.
(b) A tax lien on inventory, furniture, equipment, or other personal property is a lien in solido and attaches to all inventory, furniturе, equipment, and other personal property that the property owner owns on January 1 of the year the lien attaches or that the property owner subsequently acquires.
Tex. Tax Code Ann. §§ 32.01(a) & (b)(2001). The term in solido literally means “as a whole” and creates an obligation of joint and sevеral liability. Black’s Law DiCtionaey 799 (7th ed.1999). The Taxing Authorities relied on this section to establish their lien on all of the Debtor’s property. The Dеbtors appear to recognize that this lien existed, but claim that 11 U.S.C. § 502(b)(3) acts to remove the underlying claims for taxes on propеrty that they no longer have an interest in, i.e. the property that was sold just prior to and subsequent to the bankruptcy filing.
Section 502(b) states that the court shall allow claims, except to the extent that, “if such claim is for a tax assessed against property of the estate, such claim exceeds the value of the interest of the estate in such property.” 11 U.S.C. § 502(b)(3). The interpretation of § 502(b)(3) is an issue of first imрression in this Circuit, and there is little guidance on the statute’s interpretation in other circuits or at other levels of the court system. Therefore, “[a]s in any case of statutory interpretation, we look to the plain language of the statute, reading it as a whole and mindful of the linguistic choices made by Congress.”
Whatley v. Resolution Trust Corp.,
Property interests are created аnd defined by state law. Unless some federal interest requires a different result, there is no reason why such interests should be analyzed differently simply because an interested party is involved in a bankruptcy proceeding. Uniform treatment of property interests by both state and federal courts within a State serves to reduce uncertainty, to discourage forum shopping, and to prevent a party from receiving “a windfall merely by reason of the happenstance of bankruptcy.” Lewis v. Manufacturers National Bank,364 U.S. 603 , 609,81 S.Ct. 347 ,5 L.Ed.2d 323 (1961). The justifications for application of statе law are not limited to ownership interests; they apply with equal force to security interests, including the interest of a mortgagee in rents earned by mortgaged property.
Butner v. United States,
Debtors ask that we read § 502(b)(3) to mean that once a party no longer has an interest in property, the underlying tax on that property that created the lien must necessarily be denied, and that this reading of § 502(b)(3) supersedes the Texas Property Tax Code. Such a reading goes against the plain language of the statute. We hold that a more logical reаding of § 502(b)(3) is that a claim for taxes on property can not exceed the value of the property that is remaining in the bankruptсy estate. Under section 32.01(b) of the Texas Tax Code, a lien on all of the taxed property was created as of January 1, 1999. Thе Taxing Authorities were entitled to this amount but, under § 502(b)(3), they could not claim more than the value of the interest the Debtors’ had in the estate. We hold that the “value of the interest of the estate” refers to the gross value of the property that entered into the bankruptcy estate.
In re Milit, Inc.,
AFFIRMED.