### FI LED U.S. COURT O F APP EALS ELEVENTH CIRCUIT N ovembe r 30 , 2 004 THO MAS K. KAH N CL ERK [PUBLIS H] IN THE UN ITED STATES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

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BK CYN o. 97- 0168 0- 6b1 In Re: T.H. O RLANDO LTD ., De btor. STATE OF FLORIDA, De partm ent of Revenue, Plaintiff-Appellee, ve rs us T.H. ORLAN DO LTD. , T.H. RESORTS ASSOCIATES LTD., KISSIM MEE LODGE LTD., D ef en dants -Appe llants .

____ ____ ____ ____ ____ ____ Appeal f rom the United State s District Court fo r the Mi ddl e D istri ct

of F lor ida

____ ____ ____ ____ ____ ____ _ (N ove m be r 30, 200 4)Honora ble Arthur L . Alarc ` n, United States Circuit J udg e for the Ninth Circuit, sitt ing * by desig nation. 2 Be fo re BL A CK , RO N E Y a nd A L A RC Ó N , Ci rc uit Jud ge s. * AL ARC ÓN , C ircuit Judg e: Appe llants T . H . O rl an do, L td. , T . H . Re sorts A sso ci at es s, L td. , a nd K iss im m ee L odge , L td. , appe al f ro m the dis tr ic t c ourt’ s or de r re ve rs ing the bankr upt cy c ourt’ s gr an t of

sum m ar y j udgm en t a ga ins t the F lor ida D ep ar tm en t of Re ve nue ( “ FD O R” ). T he dis tr ic t c ourt c onc lud ed a s am atte r of

lawthat § 1146 (c), which exem

pts from stam p or sim ilar taxes the m aking or deliv ery of an ins tr um en t of tr an sf er und er ac onf irm ed Ch ap te r 11 p lan, doe s no t e xte nd t o th ir dparty tr an sa ct ion s in vol vin g no n- es ta te pr ope rty . W e ha ve j ur isd ic tio n ov er thi s ap pe al pu rs ua nt to 28 U.S.C. §§ 15 8( d) an d 1 22 9. We reve rs e b ecau se we co nc lud e tha t the tr an sf

er a t i ssu e in this c as e w as ne ce ssary to the c onsum

m at ion of ac onf irm ed Ch ap te r 11 p lan. I Appe llants T . H . O rl an do, L td. a nd T . H . Re sorts A sso ci at es , L td. (collectively , the “ debtors”) own three hotels in the Or lando, Florida are a. In Fe br uary of 199 7, the de bto rs , f

ac ing f or ec los ur e of

the m ortga ge e nc um

be ri ng the thr ee hot el s, f

ile d f or Ch ap te r 11 b an kr

upt cy . A lth oughthe m ortga ge de bt o n th e3

th ree h ot el s ex ceed ed$7 0 m il li on , th e m or tg ag e le nd er, RECP Orla nd o, L.P., ag reed to acce pt $2 3.5 m il li on in sat is fact io n o f th e o ut st an di ng m or tg ag e b al an ce. RECP co nd it io ne d i ts off er o n re cei pt of $ 23 .5 m il li on by Aug us t 3 1, 1 99 7. Be rk shi re Mo rt ga ge F inanc e Co rp or at ionw as the onl y le nde r w ill ing to advance the debtors $23 .5 m illion before Augus t 31, 1997. Ber kshire, however , co ndi tio ne d it s of

fe r to l en d th e de bto rs $23 . 5 m ill ionon the a gr ee m en t of K iss im m ee L odge , L td. , anon -d eb tor that owne d ahot el a dj ac en t t o on e of the d e b t o r ’s h o t e l s , t o r e f

i n a n c e i t s h o t e l t h r o u g h B e rk s h i r e a s p a rto f t h e s a me transaction. K issimm ee agr eed to participate in this transaction so lely as an acco m m od at io n t o t he de bt or s. Kis si m m ee’s h ot el was n ot su bjec t t o t he RCAP m or tg ag e, an d i t was un de r no ob li ga ti on to refi na nc e it s h ot el at t he ti m e. Ef fective July

31, 1997, Ber

kshire issu ed four com

m itm ent letters, under w hic h it a gr ee d to m ak e the f

oll ow ing loans: ( 1) $4 m ill ionto T . H . O rl an do s e c u r e db y amo rt g a g e o n i t s h o t e l ; ( 2 ) $ 9 . 9 mi l l i o n t o T. H . R e s o rt s s e c u r e db y a mo rt g a g e o n o n e o f

i t s t w o h o t e l s ; ( 3 ) $ 1 2 . 8 mi l l i o n t o T. H . R e s o rt s s e c u r e db y a m ortgage on the oth er of its hotels; and (4) $29.35 m illion to Kissim m ee sec ured by a m ortgage on its h otel. P ursuant to th is agreem ent, the debtors filed a C hapter 11 j oin t pl anof

r eo rg an iz at ion( the “ O rl an do p lan” ) w hic h pr ovi de s, in pe rt ine nt part :11 U.S.C. § 1129(a)(1) provides that a c ourt “shall conf irm a plan only

if . . . [t] he plan 1 complies with the applica ble provisions of this tit le.”

4 Be rk shi re ’ s w ill ing ne ss t o m ak e the loan to [ the de bto rs ] is co nti nge nt uponK iss im

m ee L odge ’ s a gr ee m en t t o r ef inanc e its hot el thr ough Be rk shi re ; B er

kshi re w ill not

pr ovi de a ny

f inanc ing to [the de bto rs ] unl es s K iss im

m ee L odge r ef

inanc es thr oughBe rk shi re . T he K iss im m ee L odge r ef

inanc ing the re fo re is inc ide nt t o an ac ondi tio n pr ec ed en t t o th e re or ganiz at ionof [ the de bto rs ] a nd tha t r ef inanc ing the re fo re is ex em

pt f ro m F lor ida doc um en tary

stam p ta xe s, int an gib le and sim ilar taxes pursuant to 11 U. S. C. § 114 6(c). T he F D O R f

ile d ati m el y

obj ec tio n to the c onf

irm at ionof

the plan. T he FD O R arg ue d th at

the plan f

ai le d to c om

ply w ith11 U . S. C. § 11 29( a) (1 ) be ca use 1 the § 114 6(c) e xem

ption the proposed p lan conferre d on th e K issimm ee tr an sa ct ionw as not

a va ila ble a s am atte r of

lawto non- de bto r en tit ie s. A t the Au g u s t1 8 , 1 9 9 7 co n fi rmat i o n h ea ri n g , t h e b an kru p t cy co u rt s u s t ai n ed t h e F DOR ’s obj ec tio n w ith out

pr ej udi ce a nd c onf

irm ed the plan. W ithr es pe ct

to the K iss im m ee tr an sa ct ion , the Co nf irm at ionO rd er

pr ovi de d: The P lan . . . is hereby

confirm ed, and all objections thereto are overruled, e xcept that the objection raise by the [FD OR] is sustain ed w ith out pr ej udi ce , a nd the P lan is he re by a m en de d su chthat the $29,350 ,000 m ortgage refinancing transaction betwee n Kissim m ee L odge a nd B er

kshi re sha ll not , unt il furthe r or de r of thi s C ourt be de em ed e xe m pt f ro m F lor ida doc um en tary

stam p ta xe s un de r 11 U. S. C. § 114 6(c). K iss im m ee pa id $ 161, 425 in F lor ida doc um en tary

stam p ta xe s and i ntangi ble ta xe s u nd er p ro te st .5

T he de bto rs a nd K iss im

m ee the n f

ile d su it in the Ci rc uit

Co urt f or O sc eo la C o u n t y, F l o r i d as e e k i n g d e c l a r a t o ry r e l i e f a n d ar e f u n do f t h e $ 1 6 1 , 4 2 5 i n s t a mp and intang ible taxes that Kissim m ee had paid. In response, the FD OR rem oved the case to fe deral bankruptcy court. The bankruptcy

court found that Kissim m ee’ s agreem ent to refinance w as done pursu ant to the Orlando plan, w as es se nti al to the c onf

irm at ionof

the plan, a nd w as ne ce ssary to co nsum

m at e an d im plem ent the plan. A ccordingly , the bankruptcy court concluded that K iss im m ee ’ s r ef inanc ing of

it s m ortga ge w as “ unde r a plan” w ith in the m eanin g of § 11 46( c) a nd that K iss im m ee w as e nti tle d to aj udgm en t of $16 1, 425 ag ai nst

the FD O R. T he dis tr ic t c ourt r ev er se d, hol din g th at § 11 46( c) w as ina

ppl ic ab le be cau se th e tr an sa ct io n i nv ol ve d t wo n on -d eb to rs . II T he dis tr ic t c ourt’ s in te rp re ta tio n of 11 U . S. C. § 11 46( c) is a que sti on o f lawthi s c ourt r ev ie w s de novo . Se e In re M orga n , 182 F. 3d 77 5, 777 (11th Cir. 1999 ). S ec tio n 11 46( c) pr ovi de s: T he iss uanc e, tr an sf

er , or e xc hange of

ase curi ty , or

the m ak ing or delivery of an instrum ent of transfer under a plan confirm ed under se ct ion112 9 of

thi s ti tle , m ay

not be ta xe d un de r an y

lawim posi ng a stam p ta x or sim ilar ta x.6

11 U. S. C. § 114 6(c). T o qualify for an e xem

ption under this prov ision , thre e co ndi tio ns m

ust be sa tis fi ed : ( 1) the re m

ust be astam

p ta x or sim ilar ta x, ( 2) im posed up on the m aking or deliv ery of an instrum ent of transfer , ( 3) “ under” a co nf irmed Ch ap te r 11 pl an . See In re A msterdam A ve. De v. Ass’n , 103 B. R. 454 , 456 (Bankr. S .D .N .Y . 1989). Ther e is no disp ute that the first two conditions are m et in this case. The c ontroversy centers on w hether the m ortgage Berkshire secured on Kissim

m ee’ s hotel was a tr ansfer “under” the Or lando pl an wher e ne it he r es ta te pro pe rty no r th e d eb to r was in vo lv edin th e tr an sa ct io n. W e begin “ with the language of the statute itself.” U nit ed Sta tes v . R onPair E nters., Inc. , 489 U . S. 235 , 240 ( 1989 ). I f the langua ge of the statut e is p la in, our sole obl igation is to enforce the statute “ ‘ according to its term s.’ ” Id . ( quot ing Caminetti v. United States , 242 U. S. 470, 485 (191 7)). By its term s, § 1146(c) exem pts from stam p taxes or sim ilar taxes any instrum ent of transfer

“ under” a confirm ed Chapter 11 plan. T he Third Cir cuit has held that “ the phrase ‘ under a plan confirm ed’ in 11 U.S .C. § 1146 (c) wa s m ost lik ely intended to m ean

‘ authorized by

a plan confirm ed.’ ” In re H echninger Inv. Co. of Del . , 335 F . 3d 3 35 F. 3d 2 43, 252 ( 3r d C ir . 200 3) . S im ilarl y , the F ourth C ir cu it co nc lud ed that the te rm “ un de r” m ay

be co ns tru edas “ [w]ith th e au th or iz at io n o f” a Ch ap te r 11 pl an . See In re N VR LP , 189 F . 3d 4 42, 457 ( 4thCi r. 199 9) ( quot ing W ebster’s II N

ewIndeed, a t least two bankruptc y

courts appa

rently have c oncluded that § 1146( c) ma y not 2 extend as a matter of

law to non-de btor transa ctions. See I n re Bel- Aire Inv est., Inc. , 1 42 B .R. 992, 996 (B ankr. M.D. F la. 1992) (“ [T] his court is satisfied that § 1146(c ) should not be e xten de d to a

tr ans a c tio n e nte re d into b y a no n- de bto r c or

po ra tio n a ft e r i t ha s r e c e ive d a sse ts fr om a De bto r, wh e n th e De bto r i s n ot a pa rt y to t hat tr ans a c tio n. ” ); Amsterdam , 103 B.R. at 460 (conc luding that Cong ress “ did not intend that section 1146(c) exemptions for tra nsfer s under a Chapter 11 plan a

pply to non-debtor tra

nsactions”) . As we discuss in more detail below, none of (continued...) 7 R iv er sid e U niv er sit y D ic tio nary1256 (1988)). The S econd Circuit has recognized tha t a c ha pte r 11 p lan im

pli ed ly auth or iz es a ny

tr an sf er that i ts n ec es sary

to the co ns umm at io n o f th e p la n. See City of New Yo rk v. Jacoby-B ender , 758 F . 2d 8 40, 842 (2 d C ir . 198 5) ( “ [W ] he re , a s he re , atr an sf er , a nd h en ce a n in str

um en t of tr an sf er , is ne cessa ryto the c onsu m m ati on of aplan, the plan se em s im pli ci tly to ha ve ‘ de al t w ith ’ the tr an sf er ins tr um en t. ”) ( em

pha sis a dde d) . W e ag re e w ithour sis te r ci rc uit s’ int er

pr et at ionof

§ 11 46( c) . Atr an sf

er “ unde r a plan” r ef

er s to a tr an sf er auth or iz ed

by ac onf irm ed Ch ap te r 11 p lan. I n turn , aplan auth or iz es a ny tra ns fer t ha t i s n eces sa ry

to th e co ns umm at io n o f th e p la n. Si nc e the O rl an do p lan e xpr es se d auth or iz ed the K iss im

m ee tr an sa ct ion , w hic h th e bankr

upt cy c ourt f ound w as ne ce ssary

to co nsum

m at ionof the O rl an do p l an , t h e mor t g ag e K i s s i m m ee ex t en d ed t o Be rk s h i re i s ex emp tfr o m Fl o ri d a’s stam p ta x un de r the pla in l an gua ge of § 11 46( c) . Whil e the F D O R arg ue s th at no re porte d de ci sio n e xte nds a § 11 46( c) e xe m pti on t o athi rd -p ar

ty tr an sa ct ion inv olv ing non -e state pr ope rty , nothin g inthe pla in l an gua ge of § 11 46( c) r es tr ic ts 2(...continued) 2 these c ases involved tra

nsactions betwe en non-de btors that wer e nec essar y to consummation of a Chapter 11 plan. 8 i t s ap p l i ca t i o n t o t ra n s ac t i o n s i n v o l v i n g t h e d eb t o r o r e s t at e p ro p er t y. W e the re fo re c onc lud e tha t the phr as e “ unde r a plan” r ef er s to atr an sf

er that i s ne ce ssary to the c onsum

m at ionof ac onf irm ed Ch ap te r 11 p lan ir

re spe ct ive of whe th er t he tra ns fer i nv ol ve d t he de bt oror p ro pe rty of t he est at e. T he F D O R o bj ec ts tha t c onstru ing § 11 46( c) to en co m pa ss thir d- party t ra n s ac t i o n s i n v o l v i n g n o n -e s t at e p ro p er t y wo u l dex t en dt h e b an kru p t cy co u rt ’s juri sd ic ti on be y on d i ts st atut ory li m it s. In su pp or t o f th is arg um en t, t he FDOR ci te s th is C ourt’ s de ci sio n in U nit ed Sta tes v . H

uc ka be e A uto Co
. , 783 F . 2d 1 546 (1 1thCi r. 198 6) . I n Huckabee , this Court held that a bankruptcy court lacked j ur isd ic tio n to e nj ointhe I RS f ro m a sse ssi ng a

pe na lty und er 26 U . S. C. § 66 72 ag ai ns t co rp or at e o ffi cers of t he de bt or . See 783 F. 2d a t 15 49. N otw ith standi ng the bankr upt cy c ourt’ s f ind ing that the a sse ssm en t w oul d a dve rs el y a ff ec t the co rp or at e de bto r’ s r eo rg an iz at ione ff orts, thi s C ourt c onc lud ed : T he j ur isd ic tio n of

the bankr

upt cy c ourts e nc om

pa sse s de te rm ina tio ns of the ta x li ab ili tie s of

de bto rs w ho f

ile pe tit ion s f

or r el ie f unde r the bankr upt cy law s. I t do es not , how ev er , e xte nd t o th e se parate liabilities o f taxpay ers, who ar e not debtors un der the Bankruptcy Co de . I t i s th er ef

or e ir re le vant tha t the pe na lty , if a sse sse d, w ill ad ve rs el y affe ctth e co rp or at e d eb to r’s reo rg an iz at io n.9

Id . T he F D O R arg ue s th at c onf er ri ng an e xe m

pti on o n th e K iss im

m ee tr an sa ct ion would contravene H

uc ka be e’ s hol din g th at

bankr upt cy c ourts l ac k j ur isd ic tio n to ad j udi cate the ta x li ab ili tie s of thi rd part ie s. W e dis ag re e w iththe F D O R’ s c ont en tio n th at Huckabee is co ntr oll ing . T he bankr upt cy c ourt i n Huckabee co nc lud ed that 11 U . S. C. § 50 5( a) ga ve it j urisdictio n to adjudicate the tax liabilities of third parties arising und er 26 U .S .C. § 6 67 2. See In re H

uckabee , 42 B . R. 306 , 311 ( Bankr . M. D . G a. 198 4) ( not ing with approval a series of decisions holdi ng that 11 U. S. C. § 505 (a) conferr ed au tho ri ty on b ankr upt cy c ourts t o a dj udi cate the ta x li ab ili ty of “ anof fi ce r of the de bt orwhen th e ta x i n q ue st io n i s a 1 00 pe rcen t p en al ty und er 2 6 U.S.C. § 66 72 . . . f or the debtor’ s failure to pay em ploy m ent related taxes”) . This Court rej ected thi s r ea soni ng i n Huckabee , holding th at the adj udication of a third party ’ s tax lia bil ity und er § 66 72 f el l ou tsi de the bankr

upt cy c ourt’ s j ur isd ic tio n e ve n if im posi tio n of

the ta x li ab ili ty

w oul d a dve rs el y

a ff ec t the de bto r’ s r eo rg an iz at ion . By c ontra st, the iss ue pr es en te d inthi s c as e is whe the r a non- de bto r is e nti tle d to an exem ption from

Florida stam

p and intang ible taxes und er federal ban kruptcy law . T he a dj udi catio n of sub stanti ve e nti tle m en ts c re at ed by bankr upt cy lawf al ls sq ua rel y wit hi n t he co re jur is di ct io n o f ba nk rupt cy co ur ts . Se e Ca rte r v . R odge rs ,10

220 F. 3d 1 249, 125 3 ( 11th C ir . 200 0) ( not ing that “ ‘ [a ] ri sin g un de r’ pr oc ee din gs are m atters invokin g a substant ive right created by the Bankruptcy

Code”). If bankr upt cy c ourts w er e div es te d of

j ur isd ic tio n ina ny

c as e in whic h astate sou ght to i m pose astam

p ta x or sim ilar ta x onanon -d eb tor , state s c oul d c ir cu m ve nt the exem ption provided u nder § 1146 (c) by shifting the tax burden entirely to third part ie s e ve n intho se tr an sa ct ion s in vol vin g th e de bto r. S ev er al c ourts h av e co nf er re d an e xe m

pti on o n no n- de bto rs und er § 11 46( c) w ith out

dis cu ssi ng any juri sd ic ti on al co nc ern s. See , e.g ., In re CC A P art ne rsh ip , 70 B . R. 696 , 698 (B an kr . D . D el . 198 7) ( hol din g th at astate “ m ay

not div ide li ab ili ty

f or astam p or sim ilar tax along the parties to a transaction under a confirm ed plan between de bto r gr an tor

a nd a sol ve nt g rante e” ); In re Ca ntr up , 53 B.R. 1 04 , 10 6 (B an kr . D. Co lo. 198 5) ( “ T he e xe m

pti on p ro vid ed

f or in § 11 46( c) w as int en de d to appl y to the m ak ing or

de liv er y of a n in str um en t of tr an sf er , w he the r pr es en te d f

or reco rd in g b y

th e g ran to r orgra nt ee”) . Further, we note that Florida’ s own regulatory interpretation of § 1146 (c) im pl ic it ly recog ni zes th atan ex em pt io n m ay

ex te nd to th ird pa rti es . See Fl or ida A dm in. Co de , Ch . 12B -4 . 054( 31) ( pr ovi din g th at atr an sf er und er aCh ap te r 11 plan is exem

pt from state docum entary

stam p taxes “ if it is done pu rsuant to a plan co nf irm ed by the f ed er al bankr

upt cy c ourt un de r 11 U . S. C. § 11 29 . . . a nd the11

de bto r is a

party to the tr an sa ct ion ”) . A lth oughthe F lor ida r eg ula tio n w oul d re str ic t the e xe m

pti on t o tr an sa ct ion s inw hic h th e de bto r is a party , the r eg ula tio n w oul d no t r es tr ic t the e xe m pti on s ole ly

to ta xe s im

pose d onde bto rs . T his int er pr et at ionis dif

fi cu lt to r ec onc ile w iththe F D O R’ s arg um en t tha t c onf er ri ng ane xe m pti on unde r § 11 46( c) on K iss im m ee , anon -d eb tor , w oul d c ontrave ne Huckabee’

s holdi ng that bank ruptcy courts lack j urisdictio n to adjudicate the tax liabilities o n non -debtors. W e theref ore re j ect the FD OR’ s argum ent that Huckabee pr ec lud es abankr upt cy c ourt f ro m gr an tin g K iss im

m ee a n e xe m

pti on under § 114 6(c). T he F D O R a lso r el ie s on In re A msterdam A venue D evelopme nt Ass’n , a Ne w Yo rkb an kru p t cy co u rt d ec i s i o n wh i ch h o l d s t h at a t h i rd -p ar t y p u rc h as er ’s grant of a m ortgage to a bank in order to finance a purchase of estate property wa s not e xe m pt unde r § 11 46( c) . 103 B. R. a t 46 0. I n c onc lud ing that § 1146 (c ) did not extend to the third-party m ortgage, the Amst erda m co urt r ea sone d: InS ec tio n 11 23 o f the Bankr upt cy Co de , Co ngr es s li ste d th e subj ec ts tha t i t e xpe ct ed

c oul d be e m

br ac ed by aCh ap te r 11 p lan. T ha t l ist is not c onc lus ive , is ex tr em el y br oa d, a nd i ndi cate s f

ewli m itatio ns. B ut sig nif ic an tly m iss ing f ro m that l ist is any ind ic at ionthat C ongr es s intended th at a tra nsf

er be tw ee n no n- de bto rs be the sub j ec t of aplan .

. . S ec tio n 11 23, w he re Co ngr es s in dic at ed it s in te nti ons as to the co nte nts of

Ch ap te r 11 p lans, e vid en ce s th at Co ngr es s di d no t i nte nd that section 11 46(c) exem ption s for transfe rs under a Chapter 11 plan ap pl y to no n- de bt ortra ns act io ns .This is a jurisdictional argument in the sense that F DOR argues that a ba nkruptcy court 3 la c ks the a

uth or ity to r e qu ir e un de r a

Cha pte r 1 1 p lan a

thi rd pa rt y to e ng a g e in a

tr ans a c tio n w ith ano the r t hir d p art y inv olv ingno n- e state pr op e rt y . N e ve rt he le ss, the a

rgume nt i s u lti mate ly ro ote d in the c on str

uc tio n o f t

he phra se “ un de r a

pla n, ” a s F DO R c on te nd s th at on ly tho se transfe rs that a ba

nkruptcy court c ould require under a Chapter 11 plan a

re pr operly

viewed a s falling“under

a plan.” 12 Id
. a t 46 0 ( em

pha sis a dde d) . F D O R c ont en ds tha t the sa m e re as oni ng a ppl ie s in thi s c as e be ca

use nothin g in§ 11 23 c ont em pla te s th e re fi nanc ing tr an sa ct ion be tw ee n th ir d- part ie s th at w as e m plo y ed und er the O rl an do p lan. N otw ith standi ng the express term s of the Or lando pl an, the F DO R contends that th e bankruptcy court could no t authorize or require Kissim m ee to re finance its hotel with a third pa rty len de r. Cf

. In re East

m et Co rp. , 907 F . 2d 1 487, 148 9 ( 4thCi r. 199 0) ( not ing that “ it rem ains questi onable whether the bankruptcy court could have required

‘ unde r the plan, that the pur ch as er s [ of e state pr ope rty ] e xe cu te the de ed of tr ust to the thi rd -p ar

ty le nde rs ”) . S inc e, und er

F D O R’ s vi ew , the O rl an do p lan c oul d no t re qui re the K iss im

m ee tr an sf

er , the F D O R m ai nta ins that the tr an sf er w as not

“ under” the Or lando pl an within the m eaning of § 114 6(c). 3 W e ar e not persuaded by

this argum ent. T he critical inquiry under § 1146 (c ) is whe the r the K iss im m ee tr an sa ct ionw as ne ce ssary to the c onsum

m at ion of the O rl an do p lan, r eg ar dle ss o f w he the r the te rm s of the plan w er e bin din g on K iss im m ee . I f K iss im

m ee f ai le d to c ar

ry thr oughw iththe te rm s of the O rl an do plan, the plan would not have been consu m m ated. The debtors’ propos ed13

re fi nanc ing w oul d have f ai le d, RC A P w oul d have f or ec los ed on i ts m ortga ge , a nd the uns ec ur ed

c re dit or s w oul d have r ec ei ve d no thi ng. B y c ontra st, the Ch ap te r 11 plan in vol ve d in Amst er da m co uld ha ve be enc onsum

m at ed w ith out the thi rd party pur ch as er e xte ndi ng a

m ortga ge to a bank. A ll tha t w as r equir ed f or the co nsum m at ionof the plan in Amst er da m wa s the sale of the debtor’ s principal asset. The m anner in which the purchaser of that asset financed its purchase w as imm at eri al . T he F ourth C ir cu it in Sta te of M ary lan d v
. A nto ne lliCr edito rs’ L iqu ida tin g Tr ust , 123 F. 3d 77 7 (4th Cir. 1997), re lie d onasim ilar dis tin ct ionin hol din g th at a bankr upt cy c ourt or de r ex em

pti ng transf

er s of e state pr ope rty

be tw ee n a L iqu ida tin g T ru st and thir d party pur ch as er s w as not

a“ tr an spare ntl y

inv al id” interpretation of § 114 6(c). 123 F.3d at 784-86. State taxing auth orities argued tha t w hil e the tr an sf

er s f ro m the de bto r to the tr

ust w er e ex em

pt, the tr an sf

er s f ro m the trust to th e third party purchasers did not fall within the purview of § 1146(c) because “ the debtors were not parties to the transfers. ” Id . a t 78 4. I n su ppor t of the ir a rg um en t, the state ta xin g auth or iti es inv oke d In re East m et Co rp. , in w hich the F ourth C ir cu it he ld tha t a pur ch as e m one y

de ed of tr ust e xte nde d by

anon debtor to a bank to finance the purchase of estate property wa s not exem

pt und er §14

11 46 (c). Id . a t 78 5. T he F ourth C ir cu it co nc lud ed that East m et wa s distin guish able: Unlike the deed of trust financing for third-party purchasers that w as inv olv ed in Eastme t , tr an sf

er s f ro m the L iqu ida tin g T ru st t o th ir dparty purchasers w ere required by the plan of reorganization . . . It w as the sol e func tio n of

the L iqu ida tin g T ru st t o m ed ia te the relationship betwee n debtor, third-party purchaser, and creditor. By co ntr as t, in Eastme t , the m ortgages obtain ed by third-party

purchasers we re not ne cessa ryto the re orga niz ati on e ffo rt . T hir d part ie s c oul d h a v e f i n a n c e dt h e i r

p u r c h a s e o r

u s e dt h e i r

o w n c ap i t a l t o ma k e t h e m, and neither alternative w as addressed in the East m et plan. Id
. at 785- 86 ( em

pha sis a dde d) . A s in A nto ne lli , the K iss im m ee tr an sa ct ion , al tho ugh it inv olv ed

tw o no n- de bto r part ie s, w as ne ce ssary to the r eo rg an iz at ion effo rt. A nto ne lli is not p recisely on poi nt because the Fourth Circuit wa s ad dr es si ng a co ll at eral att ackon th e b an krup tc y co ur t’s o rd er. See id. at 784 (n oti ng tha t “be ca

use w e ar e fa ce d w iththe que sti on o f w he the r the T ax ing A uth or iti es a re barr ed

f ro m c oll at er al ly

a tta ck ing abankr

upt cy c ourt or de r, the issue before us is not whether the bankruptcy court m isconst rued the scope of § 1146 (c)) . He nce, the A nto ne lli co urt’ s in qui ry w as r es tr ic te d to w he the r the bankrupt cy

court’ s order “ had onlya fr ivolo us pretense to validi ty .” Id
. A ddi tio na lly , the li qui da tin g tr ust in A nto ne lli w as dis tr ibu tin g e state pr ope rty w h i l e t h e Ki s s i mm e e t r a n s a c t i o n d i dn o ti n v o l v e p r o p e rt y o f t h e e s t a t e . F i n a l l y,15

the li qui da tin g tr

ust in A nto ne lli w as a“ pr oc ed ur al m ec hanis m ” cr eate d by the bankr upt cy c ourt t o e ff

ec t the dis tr ibu tio n of

the bankr

upt cy e state , w hil e Kis si m m ee i s a s ep arat e b us in es s en ti ty. Id . at 7 82 . A nto ne lli ne ve rthe le ss p ro vid es pe rs ua siv e au tho ri ty that an e xe m

pti on unde r § 11 46( c) m ay

e xte nd t o tr an sa ct ion s in vol vin g no n- de bto rs . Whil e the liquid at ing tr

ust a t i ssu e in A nto ne lli w as c re at ed sol el y to dis tr ibu te e state pr ope rty , nothin g in A nto ne lli or the language of § 114 6(c) suggests that a transfer m ust inv olv e es ta te pr ope rty

to qua lif y f or a n e xe m pti on. F urthe r, the F ourth Circuit analy sis, in our view, hinged o n its conclus ion th at the transfer s betwee n the li qui da tin g tr

ust a nd thir d party

pur ch as er s w er e ne ce ssary to co nsum

m at ionof the plan. I nde ed , the F ourth C ir cu it dis tin gui she d it s e ar lie r de ci sio n in Eastme t on the gr ound

that “ the w ay

in w hic h th ir d- party

pur ch as er s f

inanc ed the ir pur ch as es [ in Eastme t ] w as irr el ev ant to the plan and the ir use of the de ed of tr ust financing therefore w as not ‘ under a plan.’ ” Id
. at 785 (em

phasis add ed). In co ntr as t t o Eastme t , the K iss im m ee r ef inanc ing tr an sa ct ionw as not “ ir re le vant” to the Or lando pl an because the plan could not have been consumm ated absent that tra ns fer. Cf

. Be l-A ire Invs., Inc. , 142 B. R. a t 99 6 ( hol din g th at § 11 46( c) did

not ex em pt r ef inanc ing by

non -d eb tor

be ca use “ thi s w as not

atr an sa ct ionin fur the ranc e of c onsu m m ati on of the te rm s of

the Co nf irm ed plan, but ind ep en de nt16

of a ny of the spe ci fi c te rm s of

the Co nf irm ed P lan” ) (e m

pha sis a dde d) . F ar

f ro m be ing ir re le vant, the K iss im

m ee tr an sf

er w as e sse nti al to co nsum

m at ionof the Orla nd o p la n a nd th eref

or e was “ un de r th e p la n” wit hi n t he m ean in g o f § 1 14 6( c). Both parties also inv oke various po licy argum ents to su pport their propo sed interpretation of § 114 3(c). Appellants em phasize that the Congressio nal policy be hin d § 1 143( c) w oul d be f urthe re d if

a n e xe m pti on w er e gr an te d inthi s c as e be ca use suc h an e xe m

pti on w oul d e nc our ag e en tit ie s su cha s B er kshi re to ex te nd f i n a n c i n g t o d e b t o r s . T h e F D O R s t r e s s e s t h e p o l i c y a rt i c u l a t e db y t h e S up r e me Co ur t t ha t t ax ex em

pt io ns are t o b e co ns tru edna rro wly. See , e.g ., United States v. Ce nte nni al S

av ing s B ank F SB , 49 9 U.S. 5 73 , 58 3 (1 99 1) (“ Tax -ex em pt io n a nd . . . deferr al provisio ns are to be construed narrow ly .” ). T he Suprem e Court also has instructed lower courts that feder al law s that interfere with state taxation schem es sh ou ld be co ns tru edin fav orof t he st at e. See , e.g ., Ca lif orni a State B d. of E qual iza tio n v . Sie rra Sum m it, I nc . , 4 9 0 U . S . 8 4 4 , 8 5 1 - 5 2 ( 1 9 8 9 ) ( n o t i n g t h a t“a co urt m ust pr oc ee d c ar ef

ull y w he n a ske d to r ec ogni ze a n e xe m pti on f ro m state taxation th at Congress has not clearly expressed”). Res or t t o s uc h p ol ic y

co ns id erat io ns pe rh ap s wo ul d b e ap pr op ria te if we concluded th at the application of § 11 46(c) to the Kissim m ee transaction was am big uous . W e co nc lud e, how ev er , the pla in l an gua ge of § 11 46( c) e xe m

pts f ro m17

stam p ta xe s or sim ilar ta xe s any

tr an sf er that i s ne ce ssary

to the c onsum

m at ionof a Ch ap te r 11 p lan. N oth ing in the pla in l an gua ge of § 11 46( c) r es tr ic ts the ex emp t i o n t o t ra n s ac t i o n s i n v o l v i n g t h e d eb t o r a n des t at e p ro p er t y. Orl an d o ’s Ch ap te r 11 p lan e xpr es sly auth or iz ed

the K iss im

m ee -B er kshi re tr an sa ct ion , a nd tha t transa ct ionw as ne ce ssary to the plan’ s c onsum

m at ion . A cc or din gly , the dis tr ic t c ourt’ s or de r is REV ERS ED .