Mediofactoring v. McDermott (In re Connolly North America, LLC)

(Sixth Circuit, Sep. 21, 2015)

The Sixth Circuit reverses the bankruptcy court and district court, holding that a creditor making a substantial contribution in a Chapter 7 case may be awarded an administrative expense claim. Section 503(b) expressly provides that creditors making substantial contributions in Chapter 9 cases and Chapter 11 cases may be awarded an administrative expense claim. The lower courts held that this necessarily excludes such claims in Chapter 7 cases. The Sixth Circuit holds that because 503(b)’s list is not exclusive (the list is preceded by the word “including”), a creditor in a Chapter 7 case case may be awarded an administrative expense claim for making a substantial contribution. Opinion below.

2015-09-21 – in re connolly north america

Author: Matt Lindblom

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