TAGGED OPINION

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

FORT LAUDERDALE DIVISION

www.flsb.uscourts.gov

In re:

AMERICAN PURCHASING SERVICES, Case No. 20-23495-SMG

LLC d/b/a American Medical Depot, et al.,

1 (Jointly Administered)

Debtors. Chapter 7

____________________________________/

ORDER DENYING CHAPTER 7 TRUSTEE’S 

MOTION TO EXTEND THE 11 U.S.C. §§ 105, 546, AND 549 DEADLINES

In its 2005 decision in In re International Administrative Services, Inc.,

2 the 

Eleventh Circuit held that a bankruptcy court can extend a trustee’s statutory 

deadline under Bankruptcy Code3 section 546(a) to commence certain adversary 

1 The Debtors in these cases, along with their respective main bankruptcy case numbers, are: 

(i) American Purchasing Services, LLC (20-23495-SMG), (ii) DVSS Acquisition Company, LLC (20-

23501-SMG), (iii) AMD Pennsylvania, LLC (20-23503-SMG), and (iv) American Medical Depot 

Holdings, LLC (20-23504-SMG).

2 408 F.3d 689 (11th Cir. 2005).

3 11 U.S.C. §§ 101-1532.

Scott M. Grossman, Judge

_____________________________________________________________________________ United States Bankruptcy Court

ORDERED in the Southern District of Florida on November 21, 2022.

Case 20-23495-SMG Doc 551 Filed 11/21/22 Page 1 of 9
2

proceedings. But just because a bankruptcy court has this authority does not mean 

that in every case an extension is warranted.

Background

Chapter 7 Trustee Marc P. Barmat requested that the Court extend his 

statutory deadlines to commence certain actions under Bankruptcy Code sections 

108, 546, and 549, for an additional 60 days, through and including February 9, 2023.

4

The Trustee asserts that these deadlines all expire on December 11, 2022, and that 

he and his professionals “require more time to investigate, and if actionable, 

prosecute estate claims against additional litigation targets, who are identified in 

Exhibit B to” his motion.5 He further argues that because secured creditor Wells 

Fargo’s claim is secured by all of the Debtors’ assets, any litigation or investigation 

could only benefit Wells Fargo absent an agreement otherwise. But because the 

Trustee has not yet reached an agreement with Wells Fargo on funding any litigation 

and how to split any proceeds, the Trustee seeks a 60-day extension of his deadlines

– through February 9, 2023 – to preserve all potential claims under 11 U.S.C. §§ 108,

546, and 549, against any party until then.

The Trustee attached to his motion a list of approximately 30 entities whom 

he considers to be potential litigation targets.6 He then filed an amended list which 

added one more entity,7 and then filed a second amended list which removed two 

4 ECF No. 531.

5 Id.

6 Id., Ex. B.

7 ECF No. 536.

Case 20-23495-SMG Doc 551 Filed 11/21/22 Page 2 of 9
3

entities.8 Except for one entity for whom the Trustee did not have an address, the 

Trustee served his motion and the notice of hearing thereon on all of the other 

potential litigation targets.9 Notwithstanding this finite list of potential litigation 

targets, in the proposed order attached to his motion, the Trustee asked the Court to 

order that the requested extension “apply to the entire universe of all potential 

defendants/targets.”10

At the November 16, 2022 hearing on the motion,11 however, the Trustee 

retreated from this request, and stated that he was only seeking to extend the section 

546(a) deadline as to those potential litigation targets to whom copies of the motion 

and notice of hearing were sent. The Trustee also withdrew his request to extend the 

section 108 and 549 deadlines altogether, rendering that request moot. None of the 

potential litigation targets filed any objections to the motion or appeared at the 

hearing.

Analysis

When a party requests the Court to exercise its general equitable power under 

Bankruptcy Code section 105(a) to affect the rights of third parties not before the 

Court, the Court must independently evaluate the request – even where those 

affected parties received notice and failed to appear and object. Bankruptcy Code 

section 546(a) requires that an avoidance action under sections 544, 545, 547, 548, or 

553 must be commenced before the later of two years after the order for relief, or one 

8 ECF No. 538.

9 ECF No. 537.

10 ECF No. 531, Ex. A.

11 ECF No. 534.

Case 20-23495-SMG Doc 551 Filed 11/21/22 Page 3 of 9
4

year after the appointment or election of a trustee.12 Orders for relief were entered in 

these cases on December 11, 2020, when the Debtors filed their voluntary chapter 11 

petitions.13 These cases were converted to chapter 7 on June 1, 2021,14 and the

Trustee was appointed on June 2, 2021.

15 Thus, under section 546(a), the Trustee’s 

deadline to commence actions under sections 544, 545, 547, 548, or 553 expires on 

December 11, 2022.

As a basis to extend this deadline, the Trustee argues that he need only satisfy 

the “for cause” standard of Federal Rule of Bankruptcy Procedure 9006, and that he

has articulated sufficient “cause” for the requested extension. Rule 9006(b) provides, 

with certain exceptions not applicable here, that:

when an act is required or allowed to be done at or within a specified 

period by these rules or by a notice given thereunder or by order of court, 

the court for cause shown may at any time in its discretion (1) with or 

without motion or notice order the period enlarged if the request 

therefor is made before the expiration of the period originally prescribed 

or as extended by a previous order or (2) on motion made after the 

expiration of the specified period permit the act to be done where the 

failure to act was the result of excusable neglect.16

Together with the Court’s general equitable power under Bankruptcy Code section 

105(a) – which allows the Court to “issue any order, process, or judgment that is 

necessary or appropriate to carry out the provisions of” the Bankruptcy Code17 – the 

Trustee argues that Rule 9006 authorizes the Court to extend this deadline. 

12 11 U.S.C. § 546(a).

13 See 11 U.S.C. § 301(b).

14 ECF No. 378.

15 ECF No. 381.

16 Fed. R. Bankr. P. 9006(b).

17 11 U.S.C. § 105(a).

Case 20-23495-SMG Doc 551 Filed 11/21/22 Page 4 of 9
5

The Trustee is correct that in this Circuit, under International Administrative 

Services,

18 this Court has the authority to extend a trustee’s deadline under section 

546(a) to commence certain avoidance actions. But just because the Court has this 

authority does not mean that every case warrants the Court exercising it. The 

pertinent question is whether the facts of this case justify the Court exercising the 

extraordinary power to preemptively toll a statute of limitations?

To make this determination, the Court first turns to the facts of International 

Administrative Services, which were critical to the Eleventh Circuit’s holding. In 

International Administrative Services the trustee’s ability to investigate the transfers 

at issue was hampered by the litigation targets themselves – the debtor’s founder and 

sole shareholder, and his associates.19 These litigation targets delayed document 

production, withheld discovery responses, and claimed they had “lost” records of the 

transfers.20 As a result of their discovery obstruction, the trustee had to file a motion 

to hold the debtor’s principal (and the professionals assisting him) in contempt of 

court, and the bankruptcy court had to appoint a special master to administer 

discovery compliance.21 Due to these challenges caused by the litigation targets 

themselves, the bankruptcy court extended the trustee’s deadline under section 

546(a) to commence avoidance actions against them.22

18 408 F.3d 689.

19 Id. at 696.

20 Id.

21 Id.

22 Id. at 696-97.

Case 20-23495-SMG Doc 551 Filed 11/21/22 Page 5 of 9
6

On appeal, the defendants argued that section 546(a) was a jurisdictional bar 

that could not be extended by the bankruptcy court. The Eleventh Circuit rejected 

that argument, and held that section 546 is not jurisdictional, but rather is a statute 

of limitations.23 As a statute of limitations, it is subject to waiver, equitable tolling,

and equitable estoppel.24 The Eleventh Circuit then held that “[w]here, despite the 

exercise of due diligence, a trustee fails to timely bring an avoidance action due to 

fraud or extraordinary circumstances beyond the trustee’s control, equitable 

tolling prevents the expiration of § 546(a)’s limitations period.”25

The Eleventh Circuit also held that Bankruptcy Rule 9006(b) – the rule that 

provides for extensions of certain time periods – provided sufficient authority for the 

Bankruptcy Court to extend the section 546 deadline.26 Even though that rule refers 

only to time periods created by the Bankruptcy Rules or a court order – and not to 

periods created by statutes – the Eleventh Circuit was willing to read the phrase “by 

these rules . . . or by order of court” in Rule 9006 expansively to “bring all of the 

Federal Rules of Bankruptcy Procedure under its umbrella” – including Rule 7001, 

which defines an adversary proceeding as one “to recover money or property” and 

Rule 7003, which governs the commencement of adversary proceedings.27

Accordingly, the Eleventh Circuit affirmed the bankruptcy court’s extension of the 

section 546 deadline.

23 Id. at 699.

24 Id.

25 Id. at 700 (emphasis added).

26 Id. at 699.

27 Id. This analysis, however, has been criticized by a leading bankruptcy law treatise as “involving 

some convoluted reasoning.” 10 COLLIER ON BANKRUPTCY ¶ 9006.04 (16th ed. 2022).

Case 20-23495-SMG Doc 551 Filed 11/21/22 Page 6 of 9
7

Although International Administrative Services is controlling law in this 

Circuit – bestowing this Court with authority to grant the requested relief – this 

Court reads International Administrative Services narrowly and based on a specific 

set of facts.

28 It permits – but does not require – the Court to extend the section 546(a)

deadline under appropriately egregious circumstances: like where the litigation 

targets themselves are stymying the trustee’s discovery efforts. Put another way, the 

litigation targets cannot obstruct discovery to try to “run out the clock” on the section

546(a) deadline, and then argue that the trustee’s claims are time-barred. Those 

circumstances warrant – according to the Eleventh Circuit – a bankruptcy court

preemptively equitably tolling the statute of limitations under section 546(a).

But International Administrative Services does not give a trustee authority to 

obtain a blanket extension of the section 546(a) deadline as to all potential litigation 

targets whenever a trustee is not yet ready – or professes to be unable – to bring his 

claims. Rather, a trustee must demonstrate sufficiently egregious actions by the 

litigation targets or those in concert with them – similar to those detailed in 

International Administrative Services – to obtain such extraordinary relief. The 

record here fails to come anywhere close to making this showing. Indeed, the only 

proffered reason for the requested extension is that the Trustee is still negotiating 

28 The Court also notes that International Administrative Services was decided in 2005 – about a 

decade before the Supreme Court held in Law v. Siegel that a bankruptcy court may not exercise 

Bankruptcy Code section 105(a) and its inherent powers in contravention of the Bankruptcy Code. 571 

U.S. 415, 421 (2014) (“It is hornbook law that § 105(a) ‘does not allow the bankruptcy court to override 

explicit mandates of other sections of the Bankruptcy Code.’”) (quoting 2 COLLIER ON BANKRUPTCY

¶ 105.01[2], p. 105–6 (16th ed. 2013)). Although International Administrative Services does not 

specifically discuss section 105, the spirit of pre-Law v. Siegel section 105 jurisprudence certainly 

permeates the Eleventh Circuit’s analysis.

Case 20-23495-SMG Doc 551 Filed 11/21/22 Page 7 of 9
8

with the secured creditor. This is a far cry from the egregious circumstances present 

in International Administrative Services.

Here, based on the record before the Court, there is nothing that presents facts 

similar (or even remotely close) to the facts of International Administrative Services. 

Nothing in the record shows that anyone has been stymying discovery efforts; there 

are no motions to compel on the docket; nor are there any orders to show cause or 

contempt orders against any of the litigation targets, or anyone else that may be 

involved in or the subject of the Trustee’s investigations. In short, nothing in the 

record demonstrates anything close to the great lengths to which the trustee in 

International Administrative Services had to go to “piece together the jigsaw puzzle 

of transfers” in that case.29 Accordingly, the Trustee’s request to preemptively toll the 

section 546(a) statute of limitations will be denied.

Conclusion

“Statutes of limitations serve important purposes in promoting the fair 

administration of justice.”30 On the other hand, equitable tolling – even preemptive 

equitable tolling in bankruptcy cases – can serve an equally important purpose in 

preventing wrongdoers from reaping the benefits of their own misconduct. But 

equitable tolling “is an extraordinary remedy” that should be used “only sparingly.”31

Just because equitable tolling is appropriate in a particular case – like International 

Administrative Services – does not mean it should be applied in every case. 

29 408 F.3d at 702.

30 Arce v. Garcia, 434 F.3d 1254, 1260 (11th Cir. 2006).

31 Id. at 1261 (quoting Justice v. United States, 6 F.3d 1474, 1479 (11th Cir. 1993) (citing Irwin v. Dep’t 

of Veterans Affairs, 498 U.S. 89, 96 (1990))).

Case 20-23495-SMG Doc 551 Filed 11/21/22 Page 8 of 9
9

Bankruptcy courts must be careful in balancing the exercise of their equitable 

powers to remedy wrongs in the most egregious circumstances, with respecting the 

commercial and legal expectations of parties transacting with debtors in most 

ordinary circumstances. When a party transacts with an entity that ends up in 

bankruptcy, that party has a commercial and legal expectation that if a trustee wants 

to challenge any pre-petition transaction, the trustee would have to do so within two

years of the order for relief. A trustee’s desire – however well-intended – for more 

time to negotiate with a secured creditor in an attempt to maximize a recovery for 

unsecured creditors, must be balanced against the commercial and legal expectations 

of the potential litigation targets. And where there is no showing of wrongdoing by 

the litigation targets, their commercial and legal expectations must prevail over a

trustee’s desire to maximize a recovery for creditors. Accordingly, it is

ORDERED that:

1. The Trustee’s request for an extension of the 11 U.S.C. §§ 108 and 549 

deadlines is DENIED AS MOOT.

2. The Trustee’s request to extend the 11 U.S.C. § 546(a) deadline is 

DENIED ON THE MERITS.

# # #

Copy furnished to Marc P. Barmat, Esq., who must serve a copy of this Order on all 

parties entitled to service, and file a certificate of service with the Court.

Case 20-23495-SMG Doc 551 Filed 11/21/22 Page 9 of 9