Court Opinion

ID: 6928359
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:41:28.101637+00
Date Added: 2024-06-11T16:07:01.465516
License: Public Domain

BOWMAN, Circuit Judge,
dissenting.
I believe the Court errs in concluding that the IRS has standing under 11 U.S.C. § 506(c) to surcharge a secured creditor’s collateral. Section 506(c) unambiguously provides that “[t]he trustee may recover from property securing an allowed secured claim the reasonable, necessary costs and expenses of preserving, or disposing of, such property to the extent of any benefit to the holder of such claim.” 11 U.S.C. § 506(c) (1988) (emphasis added). Beyond cavil, the plain language of the statute empowers only the trustee to seek recovery under this section of the Bankruptcy Code. The language of § 506(e) is clear and unambiguous, and it is our duty to comply with this plainly expressed congressional intent. To do otherwise is “to infringe upon Congress’ role as maker of laws and judicially add language to the statutory subsection.” Dock’s Comer Assocs. v. Boyd (In re Great N. Forest Prods., Inc.), 135 B.R. 46, 65 (Bankr.W.D.Mich. (1991)) (limiting standing under § 506(c) to the trustee).
The IRS never has served as a bankruptcy trustee in this case. It follows that the IRS lacks standing to assert a § 506(c) surcharge against the Bank, and it is unnecessary to reach the remaining issues the parties have presented. In my view, the decision of the District Court should be vacated and the court should be directed to dismiss the § 506(e) claim the IRS here asserts. I therefore respectfully dissent.