Court Opinion

ID: 2976789
Source: CourtListenerOpinion
Date Created: 2015-09-22 17:57:44.327848+00
Date Added: 2024-06-11T15:38:16.544236
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                                    Pursuant to Sixth Circuit Rule 206
                                            File Name: 08a0291p.06

                       UNITED STATES COURT OF APPEALS
                                       FOR THE SIXTH CIRCUIT
                                         _________________

                                              X
                                               -
 In re: HNRC DISSOLUTION COMPANY, formerly
                                               -
 known as Horizon Natural Resources Company, et
                                               -
 al.,
                                               -
                                                                       No. 07-5894
                                        Debtors.
                                               ,
                                                >
                                               -
                                               -
                                   Appellant, -
 ZURICH AMERICAN INSURANCE COMPANY,

                                               -
                                               -
                                               -
          v.
                                               -
 LEXINGTON COAL CO., LLC,                      -
                                    Appellee. -
                                               -
                                              N
                              Appeal from the United States District Court
                            for the Eastern District of Kentucky at Ashland.
                           No. 06-00104—David L. Bunning, District Judge.
                                           Argued: July 29, 2008
                                  Decided and Filed: August 13, 2008
            Before: ROGERS and McKEAGUE, Circuit Judges; ADAMS, District Judge.*
                                            _________________
                                                 COUNSEL
ARGUED: Karen Lee Turner, ECKERT, SEAMANS, CHERIN & MELLOTT, LLC, Philadelphia,
Pennsylvania, for Appellant. Gregory R. Schaaf, GREENEBAUM, DOLL & McDONALD, PLLC,
Lexington, Kentucky, for Appellee. G. Eric Brunstad, Jr., BINGHAM McCUTCHEN LLP,
Hartford, Connecticut, for Amicus Curiae. ON BRIEF: Karen Lee Turner, Gary D. Bressler,
ECKERT, SEAMANS, CHERIN & MELLOTT, LLC, Philadelphia, Pennsylvania, Douglas T.
Logsdon, McBRAYER, McGINNIS, LESLIE & KIRKLAND, PLLC, Lexington, Kentucky, for
Appellant. Gregory R. Schaaf, Margaret A. Miller, GREENEBAUM, DOLL & McDONALD,
PLLC, Lexington, Kentucky, Barbara Reid Hartung, GREENEBAUM, DOLL & McDONALD,
PLLC, Louisville, Kentucky, for Appellee. G. Eric Brunstad, Jr., Collin O’Connor Udell,
BINGHAM McCUTCHEN LLP, Hartford, Connecticut, for Amicus Curiae.

        *
          The Honorable John R. Adams, United States District Judge for the Northern District of Ohio, sitting by
designation.

                                                       1
No. 07-5894           Zurich American Ins. Co. v. Lexington Coal Co.                         Page 2

                                       _________________
                                           OPINION
                                       _________________
        PER CURIAM. Zurich American Insurance Co. (“Zurich”) provided insurance coverage to
Horizon Natural Resources Co., et al., (“the Debtors”) during the pendency of the Debtors’
Chapter 11 bankruptcy proceedings. The policies issued to the Debtors were “deductible policies,”
meaning that Zurich would pay the entirety of any claims made and would later seek reimbursement
from the Debtors for the deductible portion. After confirmation of the Debtors’ plans, but before
the expiration of the date set for the filing of administrative expense claims, Zurich filed an
administrative expense claim. Zurich’s administrative expense claim seeks payment of
$14,593,567.79, which is an actuarial estimate of the deductible portion of the claims that Zurich
believes it will pay in the future for injuries that occurred during the coverage period but were not
the subject of insurance claims until after confirmation of the Debtors’ plans. Both the bankruptcy
court and the district court denied Zurich’s administrative expense claim, holding that it does not
constitute an “actual, necessary cost[] and expense[] of preserving the estate” as is required by
11 U.S.C. § 503(b)(1)(A).
       On appeal to this court, Zurich argues that the bankruptcy court and the district court
misinterpreted 11 U.S.C. § 503(b)(1)(A). Furthermore, Zurich argues that the lower courts should
have permitted the estimation of Zurich’s administrative expense claim under 11 U.S.C. § 502(c).
We find no merit in Zurich’s arguments. Because it would be difficult for us to add anything of
substance to the district court’s comprehensive and well-reasoned opinion, we AFFIRM for the
reasons stated by Judge David L. Bunning in Zurich Am. Ins. Co. v. Lexington Coal Co., LLC (In
re HNRC Dissolution Co.), 371 B.R. 210 (E.D. Ky. 2007).