In the 

United States Court of Appeals 

For the Seventh Circuit ____________________ 

No. 18-3289 

IN RE: CRANBERRY GROWERS 

COOPERATIVE, doing business as 

CranGrow, 

Debtor-Appellee, 

v.

APPEAL OF: PATRICK S. LAYNG, United 

States Trustee for Western District 

of Wisconsin. 

____________________ 

Appeal from the United States Bankruptcy Court for the 

Western District of Wisconsin. 

No. 1:17-bk-13318-cjf — Catherine J. Furay, Chief Bankruptcy Judge. 

____________________ 

ARGUED MAY 17, 2019 — DECIDED JULY 17, 2019 

____________________ 

Before RIPPLE, MANION, and SYKES, Circuit Judges. 

RIPPLE, Circuit Judge. Under 28 U.S.C. § 1930(a)(6), quarterly fees paid by a chapter 11 debtor to the bankruptcy 

Trustee are based on the debtor’s disbursements. Here, the 

Bankruptcy Court determined that certain payments made 

by the customers of Cranberry Growers Cooperative 
2 No. 18-3289 

(“CranGrow”) to its lender should not be considered “disbursements” for purposes of that calculation. Patrick S. 

Layng, United States Trustee for the Western District of Wisconsin (“Trustee”), appeals that determination. CranGrow 

agrees with the Bankruptcy Court’s interpretation of disbursements, but, for the first time on appeal, maintains that 

the Bankruptcy Court unconstitutionally applied the recently amended fee schedule in assessing its quarterly fees. 

We believe that the language of the fee statute requires 

that payments made by CranGrow’s customers to 

CranGrow’s lender be considered disbursements. We also 

decline CranGrow’s belated invitation to consider the constitutionality of the fee statute. We therefore reverse the Bankruptcy Court’s judgment and remand for further proceedings consistent with this opinion. 

I 

BACKGROUND 

CranGrow is an unincorporated association that filed for 

chapter 11 bankruptcy relief on September 25, 2017.1

 At that 

time, CranGrow owed its bank, CoBank ACB (“CoBank”), 

roughly $8.1 million on a revolving line of credit.2 

Shortly after filing for bankruptcy, CranGrow asked the 

Bankruptcy Court for permission to enter a new borrowing 

 

1 B.R.384 at 1. 

2 B.R.389 at 9 n.1. The parties and the Bankruptcy Court frequently refer 

to this revolving line of credit as “the revolver.” 
No. 18-3289 3

arrangement with CoBank that would give CranGrow an 

additional $5 million in credit needed to satisfy various 

monthly obligations.3

 According to the agreement, CoBank 

would increase the limit on CranGrow’s revolving line of 

credit to $13.25 million.4

 CoBank would advance funds under the new line of credit so that CranGrow could pay its 

operating expenses5 in accordance with a budget that 

CranGrow regularly submitted to CoBank.6 In return, 

CranGrow agreed that all proceeds from its inventory sales 

would be paid directly to CoBank; these payments first 

would be used to pay off the existing, prepetition debt of 

$8.1 million, and then to repay amounts that CoBank extended under the new, postpetition line of credit.7

 Thus, according to this “roll-up” arrangement, postpetition payments would be used to reduce the prepetition debt balance.

8

 The financing agreement also provided that the postpetition loan would be given priority over other postpetition 

administrative expenses.9 In seeking the Bankruptcy Court’s 

approval for this arrangement, CranGrow represented that it 

had no other reasonable alternatives for postpetition financ-

 

3 B.R.10 at 15. 

4 Id. at 3. 

5 Id. at 5. 

6 B.R.384-2 at 7; see also id. at 6 (defining “Budget”). 

7 Id. at 6. 

8 B.R.10 at 16. 

9 B.R.384-2 at 5. 
4 No. 18-3289 

ing.10 Although the Trustee objected to the roll-up request,11

the Bankruptcy Court approved the financing arrangement. 

After the agreement was signed, CranGrow’s customers 

made payments to CoBank, and these payments were applied daily, as they were received, to reduce CranGrow’s 

prepetition debt to CoBank.12 The payments did not result in 

an automatic extension of postpetition credit to CranGrow in 

the amount of the payments. Instead, CoBank extended 

funds for operating expenses to CranGrow on a weekly basis13 according to the budget that had been submitted to, and 

approved by, CoBank.14

On December 19, 2017, CranGrow proposed a chapter 11 

reorganization plan. The Bankruptcy Court confirmed the 

plan on February 16, 2018, and it became effective on April 

27, 2018. During this time, CranGrow made the required 

quarterly fee payments to the Trustee. As already noted, 

§ 1930(a)(6) of Title 28 of the United States Code provides 

that fees are to be calculated based on the amount of the 

debtor’s disbursements during the preceding quarter. In 

calculating its quarterly fees, CranGrow did not include as 

disbursements the amount that CranGrow’s customers paid 

 

10 B.R.10 at 17. 

11 B.R.67 at 6. 

12 See, e.g., B.R.137 at 4. 

13 B.R.401 at 18.

14 B.R.384-2 at 7. 
No. 18-3289 5

directly to CoBank.15 CranGrow took the position that the 

collection of accounts receivable was not a disbursement 

because “[w]hen collected, accounts receivable sweep to pay 

down the revolver ..., and then the revolver is borrowed 

against to remit disbursements.”16 

The Trustee disagreed with this characterization. He 

maintained that, because the customers’ payments were being used to reduce CranGrow’s prepetition indebtedness, 

they should be considered disbursements.17 When 

CranGrow continued to calculate and pay its quarterly fees 

without including its customers’ payments to CoBank, the 

Trustee sent CranGrow a delinquency notice. CranGrow objected and asked the Bankruptcy Court to interpret the term 

disbursement to exclude the receivable payments to CoBank 

on the ground that the “funds were never seen by CranGrow 

or deposited in any way into a debtor-in-possession account.”18 In the alternative, it asked the Bankruptcy Court to 

waive the fees.19

In a written opinion, the Bankruptcy Court held that the 

customer payments to CoBank were not disbursements. It 

acknowledged that “[m]ost courts turn to the ‘plain meaning’ of ‘disbursement’ and define it expansively to include 

 

15 See, e.g., B.R. 137 at 2. 

16 Id. 

17 B.R.384-3 at 2. 

18 B.R.323 at 4. 

19 Id. at 17–18. 
6 No. 18-3289 

any transfer of funds of the estate—regardless of the method 

of transfer.”20 The court further acknowledged that “[m]ost 

often, payments on revolving lines of credit are considered 

disbursements.”21 Nevertheless, even though CranGrow’s 

arrangement with CoBank “appear[ed] on the surface” to be 

similar to cases in which payments to creditors had been 

considered disbursements, the Bankruptcy Court concluded 

that the substance of the arrangements requires a different 

result: 

The deposit of funds into CranGrow’s account 

was not governed by a formula that determined the amount of available credit. Rather, 

all of the collected accounts receivable minus 

fees and interest were deposited into Debtor’s 

account. This flow of funds into the Debtor’s 

account was viewed by the parties as a cash 

management system. There was a continual 

flow of dollars against the prepetition debt 

converting it to immediately available funds as 

postpetition debt. While expenditure of the 

funds is limited by a budget, there was a symmetry between amounts credited against the 

prepetition line of credit balance and the 

amounts drawn on the postpetition line of 

credit.[22] 

 

20 B.R.389 at 3. 

21 Id. at 4. 

22 Id. at 5. 
No. 18-3289 7

The Bankruptcy Court also believed that the Trustee’s 

authorities were distinguishable 

because the funds at issue here—as a matter of 

substance—never settle debt. The cases cited 

by the [Trustee] involve funds permanently 

leaving the estate, whether through payment 

of operating expenses, prepayment of a loan, 

satisfaction of a mortgage through selling land, 

or reduction of line of credit indebtedness for 

periods of time. Here, the funds at issue—cash 

collateral—were returned to CranGrow immediately. It paid interest and fees from those 

funds before the money was deposited in its 

account. To the extent there was no reduction 

in the total revolver indebtedness, there was no 

real change in the underlying economic circumstances. CoBank merely received accounts 

receivable, subtracted fees and expenses, and 

returned the remainder to CranGrow. Analyzing the economic realities yields the conclusion 

these funds functionally belonged to 

CranGrow the entire time and were thus not 

“paid out” or “expended” in the traditional 

sense of “disbursement.”[23]

Instead, the Bankruptcy Court likened CranGrow’s arrangement to that employed in In re HSSI, 176 B.R. 809 

(Bankr. N.D. Ill. 1995), rev’d, 193 B.R. 851 (N.D. Ill. 1996). In 

 

23 Id. at 9–10. 
8 No. 18-3289 

that case, subsidiary debtors deposited proceeds from some 

of their sales into “a pooled account. Pooled funds were 

used to make payments to a postpetition lender on an outstanding loan. Payments from the pooled account to repay 

the loan were disbursements, but payments from the single 

accounts to the pooled accounts were not disbursements.”24

According to the Bankruptcy Court, CranGrow’s roll-up arrangement 

contain[ed] elements of a cash management 

system and transfers like that in HSSI. First, the 

DIP Revolver Loan document refers to the setup as a “cash management arrangement,” revealing the parties’ intent. Second, funds are 

merely “recycled” through CoBank, who 

serves only as a conduit between revenue and 

expenses, since funds are immediately readvanced and deposited into Debtor’s account.[25] 

Finally, the court was concerned with “double dip[ping]” 

by the Trustee.26 The court explained that, given that farming 

is seasonal, “CranGrow operates at break-even or a loss for 

much of the year,” during which times 

CranGrow is cash-poor. Its prepetition revolver exhausted, it needed the availability of overadvances from the DIP Revolver Loan. In fact, 

 

24 Id. at 11 (citations omitted). 

25 Id. 

26 Id. at 12. 
No. 18-3289 9

the Revolver draw/repayment is projected to 

be identical to the net negative cash flow until 

about the fourth quarter of 2018. The negative 

cash flow also includes the [United States Trustee] quarterly fee. Since it is cash flow negative 

and draws additional funds to pay UST fees, 

CranGrow incurs UST fees on fees if applying 

accounts receivables to the prepetition debt 

and then immediately converting it to a postpetition debt re-advance counts as two separate disbursements. This in effect represents a 

fee on a fee, or a form of double tax, resulting 

in an unfair cycle and snowball effect for much 

of the year.[27] 

According to the Bankruptcy Court, “the [Bankruptcy] 

Code aims to provide debtors with a ‘fresh start.’”28 Including “revolver” transactions as disbursements would have “a 

‘severe impact’ on the ability of debtors, including 

CranGrow, to obtain a ‘fresh start’ and effectively reorganize.”29 In sum, the Bankruptcy Court concluded that treating 

the revolver payments as disbursements “harms the viability 

of CranGrow moving forward,”30 and, generally, “does not 

 

27 Id. 

28 Id. at 13 (quoting Grogan v. Garner, 498 U.S. 279, 286 (1991)). 

29 Id. at 14. 

30 Id. 
10 No. 18-3289 

further the underlying purposes of section 1930(a)(6).”31

Consequently, the Bankruptcy Court denied the Trustee’s 

petition for fees.32 The Trustee petitioned to file a direct appeal to this court, which we granted.33

II 

DISCUSSION 

A. 

Section 1930(a) of Title 28 of the United States Code requires debtors to pay fees into the United States Trustee System Fund to support the operations of the bankruptcy 

courts. During the pendency of their bankruptcy cases, chapter 11 debtors are required to pay quarterly fees to the Trustee based on the amount of disbursements made by the 

bankruptcy estate. See 28 U.S.C. § 1930(a)(6). These range 

from $325 per quarter for debtors whose disbursements are 

$15,000 or less to $30,000 per quarter for debtors whose disbursements total more than $30,000,000. See id. 

 

31 Id. at 15. 

32 The practical effect of the Bankruptcy Court’s decision is illustrated by 

a chart in CranGrow’s brief. See Appellee’s Br. 15. If customer payments 

were included as disbursements in the calculation of quarterly fees, 

CranGrow’s fees for 2018 would have increased from $199,925.64 to 

$402,872.31. 

33 The Bankruptcy Court had jurisdiction over CranGrow’s chapter 11 

bankruptcy case pursuant to 28 U.S.C. §§ 157(a) and (b), and 1334(a). Our 

jurisdiction is secure under 28 U.S.C. § 158(d)(2). 
No. 18-3289 11

In 2017, Congress enacted a temporary amendment to 28 

U.S.C. § 1930(a)(6) that significantly increases the fees for 

debtors whose quarterly disbursements are $1,000,000 or 

more; it provides: 

During each of fiscal years 2018 through 2022, 

if the balance in the United States Trustee System Fund as of September 30 of the most recent 

full fiscal year is less than $200,000,000, the 

quarterly fee payable for a quarter in which 

disbursements equal or exceed $1,000,000 shall 

be the lesser of 1 percent of such disbursements or $250,000. 

28 U.S.C. § 1930(a)(6)(B). 

Here, the parties dispute the meaning of the term “disbursement.”34 Because “disbursement” is not defined in the 

Bankruptcy Code, we employ the ordinary meaning of the 

term. See Ransom v. FIA Card Servs., N.A., 562 U.S. 61, 69 

(2011) (employing the ordinary meaning of the term “applicable” because the term is not defined in the Bankruptcy 

Code). The dictionary definition of “disbursement” is 

“[m]oney paid out; expenditure.” The American Heritage 

Dictionary of the English Language (5th ed. 2018). In applying this term, courts have concluded that it is an “expansive 

term.” Tighe v. Celebrity Home Entm’t, Inc. (In re Celebrity 

Home Entm’t, Inc.), 210 F.3d 995, 998 (9th Cir. 2000) (internal 

 

34 We review the Bankruptcy Court’s interpretation of the statute, specifically the meaning of disbursement under 28 U.S.C. § 1930(a), de novo. 

See Wittman v. Koenig, 831 F.3d 416, 419 (7th Cir. 2016). 
12 No. 18-3289 

quotation marks omitted).35 It includes payments “made in 

the ordinary course of business,” Walton v. Jamko, Inc. (In re 

Jamko, Inc.), 240 F.3d 1312, 1316 (11th Cir. 2001), whether 

made to secured or unsecured creditors, see St. Angelo v. Victoria Farms, Inc., 38 F.3d 1525, 1534 (9th Cir. 1994), amended, 

46 F.3d 969 (9th Cir. 1995). Moreover, disbursements include 

“[p]ayments made on behalf of a debtor, whether made directly or indirectly,” Genesis Health Ventures, Inc. v. Stapleton 

(In re Genesis Health Ventures, Inc.), 402 F.3d 416, 422 (3d Cir. 

2005); see also St. Angelo, 38 F.3d at 1534–35, as well as payments made on revolving lines of credit, see In re Fabricators 

Supply, Inc., 292 B.R. 531, 534 (Bankr. D.N.J. 2003); United 

States Trustee v. Wernerstruck, Inc. (In re Wernerstruck, Inc.), 

130 B.R. 86, 89 (D.S.D. 1991). Indeed, the Bankruptcy Court 

acknowledged that “[t]he great weight of case law broadly 

defines ‘disbursements,’” and the majority view considers 

direct payments to revolving lines of credit to be disbursements.36

Based on this definition, the payments made by 

CranGrow’s customers to CoBank were disbursements. They 

were funds “paid out” to one of CranGrow’s creditors on 

behalf of CranGrow. Indeed, the customer payments here 

closely resemble those in In re Fabricators Supply, in which 

 

35 See also Robiner v. Danny’s Mkts., Inc. (In re Danny’s Mkts., Inc.), 266 

F.3d 523, 526 (6th Cir. 2001) (“We are unable to escape the conclusion 

that ... Congress contemplated that disbursements will encompass all 

payments to third parties directly attributable to the existence of the 

bankruptcy proceeding ... .”). 

36 B.R.389 at 15. 
No. 18-3289 13

the court concluded that such payments constituted disbursements. In that case, after filing for chapter 11 protection, Fabricators entered into a postpetition loan agreement 

for a $2.5 million revolving line of credit with Fleet Capital. 

In re Fabricators Supply, 292 B.R. at 532. At the time that the 

postpetition financing agreement was authorized by the 

court, Fabricators owed Fleet approximately $1.8 million. Id. 

The agreement “direct[ed] Fabricators to remit to Fleet all 

cash collateral, and further authoriz[ed] Fleet to apply the 

funds collected to the outstanding balance owed.” Id. Pursuant to the agreement, Fabricators deposited all accounts receivable and other proceeds into an account that Fleet maintained. Id. Fabricators described this account for receivables 

as “blocked” because “Fleet ha[d] sole control over this account, and Fabricators [could ]not withdraw any money 

from the account.” Id. at 532–33 (internal quotation marks 

omitted). Fleet swept the monies from the blocked account 

on a daily basis. Id. at 533. Fabricators maintained a separate, 

operating account with Fleet from which it paid vendors and 

other expenses. Id. The operating account was funded by 

monies transferred from the blocked account based on the 

available credit on the revolving loan. Id. 

Fabricators maintained that Fleet’s sweeps of the blocked 

account should not be considered disbursements for purposes of § 1930(a)(6). It characterized its agreement with Fleet 

“as creating a continuous flow of dollars against its credit 

line such that no disbursement occurs when Fleet sweeps the 

blocked account.” Id. Instead, it maintained “that disbursements only occur[red] when it ma[de] payments from its operating account.” Id. The bankruptcy court, however, disagreed. It held that Fleet’s daily sweeps of the blocked account were disbursements for purposes of calculating the 
14 No. 18-3289 

quarterly fees. It noted first that the term “disbursements” 

had to be given its “ordinary, contemporary common meaning.” Id. (quoting Perrin v. United States, 444 U.S. 37, 42 

(1979)). It further observed that two courts of appeals, after 

surveying various possible definitions, had concluded that 

“disbursement simply means ... ‘to expend’ or ‘to pay out.’” 

Id. (quoting Cash Cow Servs. of Fla., LLC v. United States Trustee (In re Cash Cow Servs. of Fla., LLC), 296 F.3d 1261, 1263 

(11th Cir. 2002); St. Angelo, 38 F.3d at 1534). The court in Fabricators then concluded that 

it is readily apparent that the process by which 

Fabricators deposits its accounts receivable into the blocked account and Fleet then sweeps 

that account results in disbursements to Fleet 

on which the quarterly fees should be calculated. Fabricators’ contention that it cannot be 

charged with a disbursement from the blocked 

account because it exercises no control over the 

account is totally without merit. The blocked 

account and the sweep of that account is simply the payment mechanism to which Fabricators agreed when it entered into the Loan 

Agreement with Fleet. The accounts receivable 

deposited by Fabricators into the blocked account certainly constitute debtor funds, and 

the sweep of the account by Fleet certainly 

constitutes an “action or fact of disbursing” ... .

Id. at 534. The court in Fabricators disagreed with the characterization “that there [wa]s no economic substance to the 

sweeps by Fleet because the amount of the debt owed by 

Fabricators [wa]s essentially the same before and after the 
No. 18-3289 15

sweeps occur as a result of the revolving nature of the loan.” 

Id. It explained that “the revolving nature of the Line of 

Credit is precisely what results in the disbursement when 

the blocked account is swept. During the term of the Line of 

Credit, Fabricators actually engages in a series of borrowing 

transactions which are repaid by the sweeps of the blocked 

account.” Id. 

Just as Fleet’s sweep of Fabricators’ blocked account constituted a disbursement, so too do payments by CranGrow’s 

customers to CoBank. In both scenarios, customer payments 

are being used to pay down the debtor’s revolving line of 

credit. In CranGrow’s case, however, the disbursement was 

simply more direct: the customers were not depositing their 

payments into an account that was being swept, but were 

sending their payments directly to CranGrow’s creditor. 

CranGrow submits that there are critical differences between the situation in Fabricators and the one before us, and, 

therefore, Fabricators should not guide our analysis. These 

distinctions, however, are either illusory or immaterial. For 

instance, CranGrow submits that, according to the agreement in Fabricators, Fleet would make the funds available to 

the debtor based on a “lending formula,” id. at 532, whereas 

here, once funds were received from CranGrow’s customers, 

they became immediately available to CranGrow through 

the postpetition line of credit.37 However, the amount of 

funds that CoBank made available to CranGrow was based 

 

37 See Appellant’s Br. 33. 
16 No. 18-3289 

on a budget submitted to, and approved by, CoBank.38 And, 

as CranGrow’s counsel acknowledged at oral argument, the 

extension of credit was not automatic; the receipt of a customer payment by CoBank and the extension of credit to 

CranGrow were “two separate transactions.”39 

Finally, CranGrow states that, “[u]nlike CranGrow,” 

“Fabricators held a depository account with its lender” and 

“funds actually left Fabricators’ bank account through a 

sweep by the lender.”40 CranGrow fails to explain why, for 

purposes of determining whether a disbursement has been 

made, it is material that CoBank is not a depository institution. Nor does it explain why it is material that customer 

payments did not make a momentary stopover in a depository account before being swept by the creditor. In both situations, funds that belonged to the debtor (customer receivables) were being paid to a creditor and, therefore, constituted disbursements. 

 

38 See B.R.401 at 17–19 (counsel for CranGrow recalling that “the advanced funds by CoBank were supplied based on the budget, and the 

budget had to be pre-approved on a weekly basis by CoBank” and also 

noting that “the amount of the advances were tied, in some mathematical way, to ... the assets of the debtor and the anticipated receivables of 

the debtor as well”). 

39 Oral Argument at 32:26. Similarly, CranGrow asserts that the extension of credit in Fabricators only involved postpetition debt. See Appellee’s Br. 33. However, in Fabricators, the court recounted that, at the time 

it authorized the postpetition financing, “Fabricators owed Fleet approximately $1.8 million.” In re Fabricators Supply, Inc., 292 B.R. 531, 532 

(Bankr. D.N.J. 2003). 

40 Appellee’s Br. 33. 
No. 18-3289 17

Indeed, CranGrow “concedes that a majority of courts 

expansively define ‘disbursements,’ in a way that almost always favors the U.S. Trustee.”41 It argues, however, that we 

should take a different approach for a number of reasons. 

First, it surmises that courts historically have taken a broad 

view of disbursements because, until recently, the fees were 

relatively small.42 But a broad view of “disbursements” was 

well established when Congress increased the fees in 2017. 

“Congress is presumed to be aware of an administrative or 

judicial interpretation of a statute and to adopt that interpretation when it re-enacts a statute without change.” Lorillard 

v. Pons, 434 U.S. 575, 580 (1978). When Congress enacted the 

increased fee schedule in 2017, it could have narrowed the 

courts’ definition of disbursements, but it refrained from doing so.43

 

41 Id. at 28. 

42 The chart in CranGrow’s brief illustrates the difference in fees resulting from the change in law. See supra note 32; Appellee’s Br. 15. The chart 

reveals that, employing CranGrow’s definition of disbursements, its 2018 

quarterly fees would have totaled $46,800 under the old law. See Appellee’s Br. 15. This amount increases to $199,925.64 under the new law. Id. 

The total fees increase to $402,872.31 when the payments on the revolver 

are included. Id.

43 Moreover, 28 U.S.C. § 1930(a)(6)(A) has one express exception; it provides that “[e]xcept as provided in subparagraph (B), ... a quarterly fee 

shall be paid to the United States trustee.” Section 1930(a)(6)(B) provides 

for increased quarterly fees in fiscal years 2018 through 2022 for debtors 

with quarterly disbursements of at least $1,000,000. Congress did not set 

forth any other exceptions in subsection (a)(6) and, specifically, did not 

except any kind of payment from the term “disbursements.” “The gen-
18 No. 18-3289 

Additionally, CranGrow asserts that giving “disbursements” a broad reading creates absurd results. We have explained, however, that the absurdity doctrine is not a license 

to “make the law ‘better,’” Soppet v. Enhanced Recovery Co., 

LLC, 679 F.3d 637, 642 (7th Cir. 2012); rather, it deals with 

texts that do not make sense as written “and thus need repair work, rather than with statutes that seem poor fits for 

the task at hand.” Jaskolski v. Daniels, 427 F.3d 456, 462 (7th 

Cir. 2005). Here, a broad reading of disbursements does not 

render the statute nonsensical. 

In sum, “disbursements” has been interpreted broadly to 

mean all payments by or on behalf of the debtor. The payments by CranGrow’s customers to CoBank were payments 

made on behalf of CranGrow and resulted in the reduction 

of CranGrow’s prepetition debt. The customer payments 

therefore are disbursements for purposes of § 1930(a)(6) and 

should have been included in the calculation of CranGrow’s 

quarterly fees. 

B. 

CranGrow argues that, even if it owes quarterly fees 

based on the payments to CoBank, those fees should be 

 

( ... continued) 

eral rule of statutory construction is that the enumeration of specific exclusions from the operation of a statute is an indication that the statute 

should apply to all cases not specifically excluded.” Cash Currency Exch., 

Inc. v. Shine (In re Cash Currency Exch., Inc.), 762 F.2d 542, 552 (7th Cir. 

1985). This canon of construction counsels against a judicially created 

exception to disbursements. 
No. 18-3289 19

waived. It submits that a waiver is permitted by 28 U.S.C. 

§ 1930(f)(3). Section 1930(f)(3) provides: “This subsection 

does not restrict the district court or the bankruptcy court 

from waiving, in accordance with Judicial Conference policy, 

fees prescribed under this section for other debtors and creditors.” The Bankruptcy Court did not address this argument 

because it determined that additional fees were not owed. 

Critically, CranGrow does not come forward with any 

authority, from our court or any other, that approves the 

waiver of quarterly fees. Additionally, CranGrow has not 

come forward with a Judicial Conference policy stating that 

quarterly fees generally may be waived or that a waiver in 

the circumstances presented here might be appropriate. Indeed, the Judicial Conference policies with respect to the 

waiver of fees do not mention quarterly fees. See 4 Administrative Office of the United States Courts, Guide to Judiciary 

Policy § 820 (Apr. 10, 2018).44 Consequently, there is no basis 

for a waiver of quarterly fees under § 1930(f)(3). 

 

44 CranGrow has included in its appellate materials a recent report of the 

Judicial Conference’s Committee on the Administration of the Bankruptcy System, in which the Committee “noted the following issues with interpreting the relevant statutes: (1) whether certain payments constitute 

‘disbursements’ for purposes of calculating the quarterly fee (specifically 

payments made by a chapter 11 debtor to its post-petition lender in connection with a revolving line of credit) ... .” See Appellee’s Supp. App. 42 

& n.3. After noting these issues, the Report states that “[t]he Committee 

will further consider these issues and consider whether the Conference 

should make a recommendation to Congress regarding whether to reenact revised subsection (a)(6)(B).” Id. at 42. Thus, the Committee has not 

made any policy recommendations, but simply is in the process of discussing these issues. Additionally, the Report’s summary advises that 
20 No. 18-3289 

C. 

CranGrow submits, for the first time on appeal, that, in 

applying the amended fee schedule of § 1930(a)(6)(B), the 

Bankruptcy Court violated the uniformity requirement of 

the Bankruptcy Clause of Article 1, section 8 of the United 

States Constitution. Specifically, because the new fee schedule was not implemented nationwide until October 2018, 

some debtors, like CranGrow, were subjected to the increased fees whereas other debtors were not. This nonuniformity, CranGrow asserts, violates Article 1, section 8.45

The Trustee, however, maintains that CranGrow’s constitutional challenge is untimely. He submits that CranGrow 

had a full and fair opportunity to raise this issue before the 

Bankruptcy Court, but failed to do so. Consequently, it has 

forfeited the constitutional argument. We agree with the 

Trustee. 

 

( ... continued) 

“no recommendations presented herein represent the policy of the Judicial Conference unless approved by the Conference itself.” Id. at 22 (capitalization removed). Thus, the Report itself confirms that it is not the 

type of definitive Judicial Conference action necessary to undergird a § 

1930(f)(3) waiver of fees. 

45 Article 1, section 8 of the United States Constitution provides, in relevant part, that “The Congress shall have Power ... To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States.” 
No. 18-3289 21

1. 

To understand CranGrow’s uniformity argument, and 

why it is untimely, some background on the U.S. Trustee 

system is helpful. Congress initially instituted the Trustee 

system as a pilot program in select districts. After the trial 

period, Congress implemented it nationwide in 1986, with a 

temporary exception for districts in Alabama and North 

Carolina. Those districts initially were required to opt in by 

1992. Eventually, however, this opt-in requirement was removed altogether.46 In those districts, the functions of the 

Trustee are performed by Bankruptcy Administrators, who 

are employees of the Judicial Branch. When enacted, the 

Trustee system was to be funded primarily through user 

fees. Because the districts in Alabama and North Carolina 

did not employ a Trustee, Trustee fees were not imposed in 

those districts.47

The disparity in the fees assessed by these separate systems came to the fore in St. Angelo v. Victoria Farms, Inc., 38 

F.3d 1525 (9th Cir. 1994), amended, 46 F.3d 969 (9th Cir. 1995). 

In St. Angelo, the debtor argued that “because the U.S. Trustee program—and the fee system which supports it—ha[d] 

not been implemented in Alabama and North Carolina, the 

law governing the fee system [wa]s not uniform and there-

 

46 See Derek F. Meek & Ellen C. Rains, Applicability of USTP Guidelines to 

Bankruptcy Administrators, 33 Am. Bankr. Inst. J., Nov. 2014, at 16. 

47 See Dan J. Schulman, The Constitution, Interest Groups, and the Requirements of Uniformity: The United States Trustee and the Bankruptcy Administrator Programs, 74 Neb. L. Rev. 91, 129–31 (1995). 
22 No. 18-3289 

fore must be struck down in its entirety.” Id. at 1529. The 

Trustee defended the dual system on two grounds. The first 

was that Congress implemented the two systems “in order 

to study the effect of the U.S. Trustee system upon the administration of bankruptcy proceedings.” Id. The court noted, however, that there was no support for this proposition. 

Id. Second, the Trustee submitted “that the U.S. Trustee program serves a purely administrative function and therefore 

is not constrained by the requirements of the Uniformity 

Clause.” Id. at 1530. The court rejected this argument as well, 

stating: 

The statute clearly ... falls within the scope 

of the Uniformity Clause. The U.S. Trustees 

have assumed the supervisory roles of the 

bankruptcy judges. Indeed, the statute entrusts 

U.S. Trustees with extensive discretion to appoint interim and successor trustees, monitor 

and supervise bankruptcy proceedings, examine debtors, advise the bankruptcy courts, and 

even, in some circumstances, to seek dismissal 

of cases. Thus, the U.S. Trustees’ activities have 

a direct effect upon the rights and liabilities of 

both debtors and creditors. 

The U.S. Trustee program is not only intimately connected to the government’s regulation of the relationship between creditor and 

debtor, it also has a concrete effect upon the relief available to creditors. Because debtors in 

states other than North Carolina and Alabama 

must pay higher fees for the supervision of 

bankruptcy proceedings, the current system 
No. 18-3289 23

reduces the amount of funds that the debtor 

can ultimately pay to his creditors in the other 

48 states. 

St. Angelo, 38 F.3d at 1530–31 (citations omitted). 

Turning to the remedy for the constitutional violation, 

the Ninth Circuit struck down “the 1990 amendments to 28 

U.S.C. § 1930,” which continued the Bankruptcy Administrator program in the six districts in Alabama and North Carolina. Id. at 1533. According to the court, it was this provision 

“that guarantee[d] that creditors and debtors in the 48 other 

states are governed by a[] dissimilar, more costly bankruptcy 

system than members of the same groups in Alabama and 

North Carolina.” Id. 

After St. Angelo, Congress amended 28 U.S.C. § 1930 to 

allow the Judicial Conference of the United States to impose 

in non-trustee districts fees equal to those imposed in trustee 

districts. See 28 U.S.C. § 1930(a)(7).48 With the adoption of 

§ 1930(a)(6)(B) in 2017, however, the disparity re-emerged. 

By statute, the increase in fees for chapter 11 debtors in trustee districts became effective January 1, 2018, and applied to 

 

48 28 U.S.C. § 1930(a)(7) provides: 

In districts that are not part of a United States trustee region as defined in section 581 of this title, the Judicial 

Conference of the United States may require the debtor 

in a case under chapter 11 of title 11 to pay fees equal to 

those imposed by paragraph (6) of this subsection. Such 

fees shall be deposited as offsetting receipts to the fund 

established under section 1931 of this title and shall remain available until expended. 
24 No. 18-3289 

debtors then in bankruptcy as well as those who filed after 

the effective date. The Judicial Conference did not adopt the 

same fee schedule for the bankruptcy-administrator districts 

until September 2018. When it did so, it made the new fee 

schedule effective as of October 1, 2018, and did not apply 

the new schedule to debtors already in bankruptcy. See Administrative Office of the United States Courts, Report of the 

Proceedings of the Judicial Conference of the United States 

11 (Sept. 13, 2018). 

2. 

Based on St. Angelo,

49 CranGrow maintains that the Judicial Conference’s failure to institute the new fee schedule for 

 

49 In addition to St. Angelo v. Victoria Farms, Inc., 38 F.3d 1525, 1529–33 

(9th Cir. 1994), amended, 46 F.3d 969 (9th Cir. 1995), CranGrow’s position 

finds support in a recent decision from the bankruptcy court in the 

Western District of Texas. See In re Buffets, LLC, 597 B.R. 588 (Bankr. W.D. 

Tex. 2019). In Buffets, the bankruptcy court determined that the Judicial 

Conference’s decision to apply the new fee schedule in bankruptcyadministrator districts 

remedies the amendment’s violation of the Uniformity 

Clause for future cases, but not in this case. Like the lack 

of uniformity that originally existed between the two 

programs, the gap in time between the imposition of the 

quarterly fees in [trustee] districts and 

[bankruptcy-administrator] districts is problematic. ... 

The Bankruptcy Judgeship Act of 2017 violated the 

Constitution when it increased quarterly fees only in the 

UST program. “Under any standard of review, when 

Congress provides no justification for enacting a 

non-uniform law, its decision can only be considered to 
No. 18-3289 25

bankruptcy-administrator districts on the same timeline as 

trustee districts violates the Uniformity Clause. The Trustee, 

however, contends that this constitutional issue is not 

properly before us. He asserts that CranGrow had a full and 

fair opportunity to raise this issue before the Bankruptcy 

Court, but failed to do so. For its part, CranGrow explains 

that the Judicial Conference Report, which reflects the decision to apply the new fee schedule prospectively beginning 

in October 2018, was not issued until September 13, 2018. At 

that point, the fee issue was fully briefed before the Bankruptcy Court; in fact, the Bankruptcy Court ruled on the 

Trustee’s claim only eight days after the Conference Report 

was issued. Thus, CranGrow submits, it did not have a 

meaningful opportunity to raise the constitutional issue between the time that the Judicial Conference acted and the 

time that the Bankruptcy Court ruled on the Trustee’s claim. 

CranGrow’s assertion that it knew about the constitutional issue only a few days before the Bankruptcy Court 

ruled, however, only partially rings true. At oral argument, 

counsel for CranGrow admitted that it was aware of the 

 

( ... continued) 

be irrational and arbitrary.” St. Angelo, 38 F.3d at 1532. 

While the quarterly fees now apply in BA districts from 

October 1, 2018, forward, the increased fees ostensibly 

owed by the Reorganized Debtors during the first three 

quarters of 2018 violate the Uniformity Clause. Therefore, the Reorganized Debtors are not required to pay 

the $ 250,000 in fees for the first three quarters of 2018, 

but rather the uniform quarterly fee of $ 30,000. 

In re Buffets, 597 B.R. at 594–95. 
26 No. 18-3289 

St. Angelo case and of a potential constitutional problem 

much earlier.50 Counsel simply assumed that the Judicial 

Conference would act to cure the fee disparity.51

CranGrow further submits that, even if it had an opportunity to raise the constitutional argument and failed to do 

so, we nevertheless have the discretion to address issues 

raised for the first time on appeal. See Kaczmarek v. Rednour, 

 

50 Oral Argument at 20:36–21:45 (counsel for CranGrow acknowledging 

that “[i]t’s possible that [CranGrow] could have known there was a problem” even before the Bankruptcy Court handed down its decision and 

agreeing with the court that counsel relied on the fact that, when the Judicial Conference acted with respect to the bankruptcy-administrator 

districts, the Conference would correct the nonuniformity). 

51 Counsel also noted that it is not apparent from the language of 

§ 1930(a)(7) that the Judicial Conference had to take the affirmative step 

of re-voting to increase fees in bankruptcy-administrator districts every 

time that there is a change to the schedule in § 1930(a)(6). The plain language of § 1930(a)(7) is permissive, not mandatory, see id. (stating that 

“the Judicial Conference of the United States may require the debtor in a 

case under Chapter 11 of title 11 to pay fees equal to those imposed by 

paragraph (6) of this subsection” (emphasis added)), allowing the Judicial Conference to implement fee increases commensurate with 

§ 1930(a)(6) as it deems appropriate. Nevertheless, the 2001 report of the 

meeting at which the Judicial Conference implemented § 1930(a)(7) suggests that the Judicial Conference may have intended for its one-time 

vote to encompass all future fee increases. See Administrative Office of 

the United States Courts, Reports of the Proceedings of the Judicial Conference of the United States 46 (Mar. 14, 2001) (“To implement this statute, the Conference approved a Bankruptcy Committee recommendation 

that such fees be imposed in bankruptcy administrator districts in the 

amounts specified in 28 U.S.C. § 1930, as those amounts may be amended from time to time.”). 
No. 18-3289 27

627 F.3d 586, 595 (7th Cir. 2010). “In our adversary system, 

... we follow the principle of party presentation. That is, we 

rely on the parties to frame the issues for decision and assign 

to courts the role of neutral arbiter of matters the parties present.” Greenlaw v. United States, 554 U.S. 237, 243 (2008). We 

operate on “the premise that the parties know what is best 

for them[] and are responsible for advancing the facts and 

arguments entitling them to relief.” Id. at 244 (quoting Castro 

v. United States, 540 U.S. 375, 386 (2003) (Scalia, J., concurring 

in part and concurring in judgment)). Thus, although we 

have the discretion to determine “what questions may be 

taken up and resolved for the first time on appeal,” Singleton 

v. Wulff, 428 U.S. 106, 121 (1976), we exercise that discretion 

“sparingly,” In re Sw. Airlines Voucher Litig., 799 F.3d 701, 714 

(7th Cir. 2015). Indeed, we usually only do so when “failure 

to present a ground to the district court has caused no one—

not the district judge, not us, not the appellee—any harm of 

which the law ought to take note,” Amcast Indus. Corp. v. 

Detrex Corp., 2 F.3d 746, 749 (7th Cir. 1993). 

We believe it would be particularly inappropriate to entertain CranGrow’s constitutional challenge under the circumstances presented here. First, St. Angelo made litigants—

including CranGrow—generally aware that constitutional 

problems would arise if bankruptcy fees were imposed in 

trustee, but not bankruptcy-administrator, districts. When 

Congress amended § 1930(a)(6) in late 2017, that problem 

arose. CranGrow began paying nonuniform fees early in 

2018 and began litigating the calculation of those fees in 

mid-2018. Nevertheless, despite the potential constitutional 

issue, CranGrow kept silent. Indeed, even when the Judicial 

Conference did not cure fully the nonuniformity—and the 

constitutional problem became concrete—CranGrow did not 
28 No. 18-3289 

bring the issue before the Bankruptcy Court. Instead, it was 

the bankruptcy judge who mentioned the constitutional 

problem for the first time in her certification for direct review.52 CranGrow had the opportunity to raise the constitutional issue before the Bankruptcy Court, but simply failed 

to do so. Second, the Trustee has been denied the opportunity to address the issue; the Bankruptcy Court has been denied the opportunity to weigh on the issue; and we have 

been denied the benefit of a full vetting on an issue of constitutional dimension. Finally, in raising the issue of lack of 

uniformity, CranGrow is attempting to enlarge its rights, 

specifically, to recover fees already paid to the Trustee.53

Given all of these factors—CranGrow’s opportunity to raise 

the issue before the Bankruptcy Court, the harm to the Trustee and to the court system, and CranGrow’s effort to en-

 

52 Our grant of the petition for direct review of the Bankruptcy Court’s 

order, which addresses only the issue whether the direct customer payments to CoBank are disbursements, cannot be read as permission to 

raise issues on appeal that were not argued and disposed of by the Bankruptcy Court. 

53 As previously noted, see supra p.9 & note 32, the Bankruptcy Court 

held that CranGrow properly excluded payments made by its customers 

to CoBank from the calculation of its quarterly fees. Excluding those 

payments from the calculation of the quarterly fees saved CranGrow 

approximately $200,000 over the course of 2018. See supra note 42; Appellee’s Br. 15. However, if we were to hold that the new fee schedule had 

been applied in an unconstitutional manner to CranGrow, CranGrow 

would be able to recoup an additional $150,000 in fees. 
No. 18-3289 29

large its rights despite its prior silence—we decline to entertain CranGrow’s constitutional challenges.54

Conclusion 

For the foregoing reasons, we hold that the payments of 

CranGrow’s customers to CoBank constituted disbursements, which should have been included in the calculation 

of quarterly fees paid to the Trustee. We also decline to reach 

CranGrow’s constitutional challenges to the assessment of 

fees. The judgment of the Bankruptcy Court is reversed, and 

the action is remanded to the Bankruptcy Court for further 

proceedings consistent with this opinion. The Trustee may 

recover the costs of this appeal. 

REVERSED and REMANDED 

 

54 CranGrow also attacks the quarterly fee payment as an unconstitutional user fee. See Appellee’s Br. 20–21. This argument was apparent 

and available to CranGrow during the pendency of its case before the 

Bankruptcy Court, but CranGrow simply failed to raise it. We therefore 

will not entertain it on appeal. See, e.g., Bank of Am., N.A. v. Veluchamy (In 

re Veluchamy), 879 F.3d 808, 821 (7th Cir. 2018) (“It is well established that 

a party waives the right to argue an issue on appeal if he failed to raise 

that issue before the lower court.”).