1

I N R E : A QUATIC DEVELOPMENT GROUP 02-5059 D ECEMBER 17, 2003

S TRAUB , Circuit Judge , conc urrin g: 1 I agre e fully with the majority ’s application of the In re Keren test to the facts of this case. 2 But I

write se parate ly b ecause

I als o conclud

e that the Bankru ptcy Court lacked authority

to 3 utilize equ

itable powers to is sue the nu nc pro tun

c closur e order in the first instanc e, and thu s, 4 fundamentally, applica tion of the In re Keren factors is both inappropriate and unnecessary

. 5 As the majority points out, Congress ame nded the quarterly

fee statute, 28 U.S.C. § 6 1930(a)(6), in January 1996 to mandate the pay ment of post-confirmation fees until a Chapter 11 7 case is closed, converted, or dismissed. See Balanced Budge t Downpayment Act, I, Pub. L. No. 8 104-99, Title II , § 211 (1996). Because Congre ss eliminated plan confirmation as one of the 9 events terminating liability for continued fee pay

ments, “uncertainty

developed as to whether the 10 amendment applied retroactively to already pe

nding cases with confirmed plans.” In re Jamko, 11 Inc. , 240 F.3d

1312, 1315 n.4 (11th C ir. 2001) . To defin e the sco pe of § 19 30(a)( 6), Cong

ress 12
enacte d a clar

ify ing prov ision in September 1 996, explic itly stating that: “ notwithstanding any 13 other provision of law , the fees under 28 U.S.C. § 1930(a)(6) shall accr ue and be pay

able from 14 and after January 27, 1996, in all cases (including, without limitation, any c ases pending as of 15 that date), regardless of the c onfirmation status of their plans.” Omnibus Consolidated 16 Appropr

iations Ac

t for Fis cal Yea

r 1997, Pub . L. N o. 104-20 8, § 109(d ) (1996)(emphas is 17 added). Given the plain lan guag e of the c larify

ing prov ision, I do not unde

rstand how Congr

ess 18 could have made its intention to mandate the pay ment of quarterly

fees in all pending Chapter 11 192

cases any more clear or explicit than with the singularly broad phrase, “notwithstanding any other 1 provision of law.” 2 Of course, it is axiomatic tha t bankruptcy

courts a re “cou rts of eq uity , empowe

red to 3 invoke equitable principles to achieve fairness and justice in the r eorganization process.” In re 4 Momentum Mfg. Corp. , 25 F.3d 1132, 1136 (2d Cir. 1994). Specifically , section 105(a) of the 5 Bankruptcy

Code grants bankruptcy

courts the “equitable power to ‘issue any order, process, or 6 judgment that is necessary or appropriate to carry

out the provisions of this title.’” In re Dair y 7 Mart Convenience Stores, Inc. , __ F.3d __, 2003 WL 22860275 at *5 (2d Cir. Nov. 20, 2003) 8 (quoting 11 U.S.C. § 105(a)). Nonetheless, this Court has repeatedly cautioned that § 105(a) 9 “does no t ‘author

ize the ba nkruptcy courts to create substantive right s that are otherwis e 10 unavailable under applicable law, or constitute a roving commission to do equity.’” Id. (quoting 11 United States v. Sutton , 786 F.2d 1305, 1308 (5th Cir. 1986)). While perhaps expansive, “[t]he 12 equitabl e power

confer red on the bankruptcy

court by section 1 05(a) is

the powe r to exerc ise 13 equity in carr

ying out the provisions of the Bankruptcy Code” not the broader power to invoke 14 equity “to further the purposes of the Code generally , or otherwise to do the right thing.” Id. 15 (emphas is in original); see also I n re Barbie

ri , 199 F.3d 616, 620-21 (2d Cir. 1999) (warning that 16 the “equitable powers emanating fr om § 105(a) . . . are not a license for a c ourt to disregard the 17 clear language

and meaning of the bankruptcy statutes and rules”) (alteration in original; internal 18 quotation marks omitted). 19 Thus, the general gra nt of equitable power contained in section 105(a) ca nnot trump 20 specific provisions of the Bankruptcy Code, but must instead be exercised within the parameters 211 Significantly, ADG has only directe d the court to one other decision where a bankruptcy c ourt has issued a similar nunc pro tunc order. See In re Junior Food Mart of Ark., Inc. , 201 B.R. 522, 524- 25 (Ban kr. E.D. A

rk. 1996) (closing a Chapte r 11 case retroa ctively to permit the debtor to avoid quarterly fees). However, In re Jun ior Food Ma rt is of little precedential value, as it was decided bef ore Congress enacted the clar ifying pr ovision to § 1930(a)(6), reaffirming tha t the fee statute would apply to all pending Chapter 11 cases regardless of confirmation status. 3 of the Code itself. See gen erally Nor west Bank

Worth ington v. A hlers , 485 U.S. 197, 206 (1988) 1 (“[W]hatever equitable powers remain in the bankruptcy courts must and can only be exercised 2 within the

confine s of the B ankruptc y Co de”); see also I

n re Dairy

Mart Conve

nience S tores, 3 Inc. , 2003 WL 22860275 at *5. In this ca se, Congress has specifically provided that Chapter 11 4 debtors pay fe es under § 1930(a)(6) until the bankruptcy case is closed, converted, or dismissed, 5 “notwithstanding any other provision of law.” Pub. L. No. 104-208 § 109(d) (1996). Plainly, the 6 grant of equitable power contained in § 105( a) is another “provision of law.” Accordingly, the 7 clarify

ing prov ision to § 19 30(a)( 6) must be read as mandatin g the pa yme nt of quar terly fees, 8 irrespective of the confirmation status of a Chapter 11 case, “notwithstanding” the bankruptcy 9 court’s usual power to issue equitable relief in the form of a nunc pro tunc order. Here, the 10 Bankruptcy

Court was indisputably issuing the nunc pro tunc closure order not to effectuate the 11 terms of the fee statute, but to relieve the debtor from the bur dens of the statute’s application, an 12 exercise of equitable power that contradicts the express terms of the c larifying provision to § 13 19 30 (a )( 6) an d i na pp ro pr ia te ly c on st ru es th e b re ad th of § 1 05 (a )’ s g ra nt of

eq ui ta bl e a ut ho ri ty. 1 14 In addition, while I agree with the majority

that ADG fails to satisfy the r equirements for 15 nunc pro tunc closure even assuming that the B ankruptcy Court had the power to issue such 16 equitable relief — I a m substantially troubled by the Bankruptcy

Court’s suggestion that the 174

Trustee ’s dilige

nce, or l ack ther

eof, in monitoring

the prog ress of a particu lar bank ruptcy case 1 should somehow factor into the analy sis of whether a debtor is entitled to equitable relief from 2 fees. As the majority notes, § 1930(a)(6) assesses fees ac cording to a graduated sc ale based on 3 the amount of quarterly disbursements paid to creditors, and “[t]hese fees bear no relation to [the] 4 particu

lar serv ices per formed by the Truste e.” The purpose o f amendi

ng § 1930 (a)(6)to mandat e 5 post-confirmation fee pay ments was to raise revenue, not to charg e debtors for the Trustee’s 6 monitoring

service s. By

issuing n unc pro tu

nc relie f, the B ankruptc

y Co urt was not only 7 circumv enting t

he cong ressiona l mandate that fee s be asse ssed in al l pending Chapter 1 1 cases, 8 but also disturbing the detailed statutory fee schedule specifically chosen by Cong

ress. Whatever 9 powers bankruptcy courts may otherw

ise exercise, “[c]ourts of equity ca nnot, in their discretion, 10 reject t

he balan ce that Congress

has struc k in a statu

te” or override

legisla tive polic y ju dgments 11 by independently weighing the advantag es and disadvantages of fully enforcing a statute. United 12 States v. Oakland Cannabis Buyers’ Coop. , 532 U.S. 483, 497-98 (2001). 13 In su

m, I be lieve the

Bankru ptcy Court lacks lega

l authorit y to grant e quitable

relief t o 14 exempt a de

btor from quarte

rly fees und er § 1930 (a)(6) . Moreove r, the kin d of fact specifi c 15 analysis that the majority undertakes in apply

ing the In re Keren test for issuing nunc pro tunc 16

re li ef

lo ok s t o f

ac to rs th at ar e w ho ll y ex tr an eo us to th e s ta tu to ry f ee sc he me im po se d b y § 17 1930(a)(6), for Congress could have chosen to make an “extraordinary circumstances” exception 18 to the payment of quar terly fee s, yet it chose not to. For a ll of these reasons, I conc ur in the 19 ultimate ju

dgment, but would d

irectly hold that the Bankr

uptcy Court exce eded its a

uthority in 20 this case in clear contradiction to the statute. 215