And Did You Know . . . The issue arose on a motion filed by the United States for an accounting, disgorgement, and payment of its claims. Thus, the debtor's accumulated funding deficiencies liability was, that the most, an administrative expense only to the extent that the debtor's funding obligation could be tied to employees' actual postpetition services. Therefore, most of the funding deficiencies liability did not qualify for administrative expense status because the liability was related to the prepetition labors of the debtor's employees. Rather, it provides support to and protects employees who participate in benefit plans.
Administrative insolvency is one factor appropriately considered in the exercise of that discretion.
The accountants were not required to obtain bankruptcy court approval before employing counsel to represent them, and their failure to obtain bankruptcy court approval did not prevent them from recovering their legal fees. West's Key No. Digests, Bankruptcy O 3161, 3181. The Chapter 7 debtor-taxpayers' conversion of their right to carry back a net operating loss, which effectively disposed of their right to a current tax refund, in exchange for the right to carry their NOL forward and use it to offset their future income, could be avoided by the trustee as a fraudulent transfer. The debtors' right both to a loss carryback refund claim and to a tax refund, if they had not elected to carry their NOL forward, was property of the debtors, for fraudulent transfer avoidance purposes. Moreover, a federal tax statute regarding the irrevocable nature of the debtors' election did not limit the trustee's avoidance power.