Court Opinion

ID: 2964838
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:31:54.57472+00
Date Added: 2024-06-11T11:43:02.266003
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USCA1 Opinion

	

                           UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
          No. 97-1014
                        IN RE LUDLOW HOSPITAL SOCIETY, INC.,
                                       Debtor
                                              
                              DAVID J. NOONAN, TRUSTEE,
                                Plaintiff, Appellant,
                                         v.
                       SECRETARY OF HEALTH AND HUMAN SERVICES,
                                Defendant, Appellee.
                                                    
                    APPEAL FROM THE UNITED STATES DISTRICT COURT
                          FOR THE DISTRICT OF MASSACHUSETTS
                [Hon. Frank H. Freedman, Senior U.S. District Judge]
                                                    
                                       Before
                               Torruella, Chief Judge,
                             Cyr, Senior Circuit Judge,
                             and Boudin, Circuit Judge.
                                                    
               Claudia  
                       J.  
                           Reed, with whom   David  
                                                    J.  
                                                        Noonan and   Cohen,
          Rosenthal P.C. were on brief for appellant.
               Jeffrey  
                       Clair, Attorney, Appellate Staff Civil Division,
          Department of Justice, with whom    Frank  
                                                     W.  
                                                         Hunger, Assistant
          Attorney General, Donald 
                                    K. 
                                       Stern, United States Attorney, and
          William  
                   Kanter, Attorney, Appellate Staff Civil Division,
          Department of Justice, were on brief for appellee.
                                                    
                                   August 13, 1997
                                                    

                    CYR, Senior 
                                Circuit 
                                        Judge.  David J. Noonan, chapter 7
          trustee ("the Trustee") for Ludlow Hospital Society, Inc. ("the
          Hospital"), appeals a district court judgment vacating two
          bankruptcy court orders entered pursuant to Bankruptcy Code S 105,
          11 U.S.C. S 105(a). The challenged orders purportedly extended the
          one-year regulatory deadline imposed by the Secretary, United
          States Department of Health and Human Services ("HHS"), for
          hospitals formerly participating in the Medicare program to sell
          their capital assets and claim supplemental reimbursement from HHS
          for certain capital-asset depreciation credits. As we conclude
          that the bankruptcy court exceeded its equitable powers under
          Bankruptcy Code S 105, we affirm the district court judgment.
                                          I
                                     BACKGROUND
                    Until it closed on February 17, 1995, the Hospital had
          participated in the Medicare program, receiving annual HHS reim-
          bursements for inpatient operating costs, as well as capital-asset
          depreciation credits, relating to its provision of services to
          Medicare recipients. Participating hospitals which retain
          ownership of the capital assets used to provide services to their
          Medicare recipients are entitled to periodic reimbursement for
          estimated actual depreciation on those assets, as determined under
          accepted accounting practices. See 42 U.S.C. S 1395x(v)(1)(O)(ii)
          (Medicare statute authorizing HHS Secretary to implement regula-
                                          2

          tions detailing asset-depreciation methodologies).
                    Upon its closure, the Hospital's participation in the
          Medicare program terminated as well. HHS administrative regula-
          tions allow a one-year post-termination period within which
          hospitals that previously participated in the Medicare program must
          sell their Medicare-related capital assets as a precondition to
          recapturing any pretermitted capital-asset depreciation credits
          from HHS.  See 42 C.F.R. S 413.134(f)(3). Thus, a hospital which
          has closed would be eligible for further depreciation reimburse-
          ments from HHS on a Medicare-related capital asset which was sold
          within one year after its closure for less than its depreciated
          basis. 
                    At the time, HHS regulations allowed hospitals forty-five
          days after their withdrawal from the Medicare program to submit a
                              
               The HHS depreciation methodology is similar to that utilized
          for federal tax purposes. For example, a CAT scanner worth
          $1,000,000, with an estimated useful life of 25 years, might
          receive an HHS depreciation reimbursement of $40,000 per year over
          a 25-year period.  See generally 42 C.F.R. S 413.134(a)-(d).
               On the same day, the Hospital filed a voluntary chapter 7
          petition. 
               Under our hypothetical, 
                                       see supra note 1, if a hospital held
          the Medicare-related capital asset for ten years, its depreciated
          basis would be $600,000, since HHS already would have reimbursed
          the hospital $40,000 per annum for estimated depreciation during
          the ten-year period, for a total of $400,000. The "depreciated
          basis" would be $600,000     its $1 million original cost, less
          $400,000 in estimated depreciation. Were the asset to sell for
          only $500,000, therefore, S 413.134(f)(3) would permit the hospital
          to apply for the $100,000 shortfall between the depreciated basis
          ($600,000) and the actual sale price ($500,000).
                                          3

          final report outlining all reimbursable Medicare costs incurred
          prior to their withdrawal.    See  id. S 413.24(f) (1994). An
          administrative extension could be obtained from HHS on a showing
          that hospital operations had been "significantly affected due to
          extraordinary circumstances over which the [hospital] ha[d] no
          control, such as flood or fire."  Id. S 413.24(f)(2)(ii) (1994).
          The HHS regulations likewise allow hospitals a three-year period
          within which to reopen and amend a final cost report which was
          timely filed.  See id. S 405.1885. Without opposition from the
          government, the Trustee obtained two extensions of the forty-five-
          day filing deadline from the bankruptcy court and the Hospital's
          final cost report was submitted to HHS within the extended
          deadline. 
                    The Trustee proceeded to attempt to sell the Hospital's
          capital assets, anticipating that the sale price might not equal
          their depreciated basis,  see supra notes 1 & 3, and that the
          chapter 7 estate might therefore claim supplemental Medicare reim-
          bursements under the aforementioned HHS capital-asset-depreciation-
          adjustment provision.  See id. S 413.134(f)(3). It soon became
          apparent, however, that the capital assets could not be sold by
          February 17, 1996, the first anniversary of the Hospital's closure
          and the deadline for realizing a depreciation-adjustment reimburse-
                              
               Although the first motion for extension was not served on the
          government, an Assistant United States Attorney verbally assured
          the Trustee that the government would not oppose the extension.
          Two months later, the Trustee served the second motion on the
          government, but the bankruptcy court granted it without awaiting a
          response from the government. 
                                          4

          ment under 42 C.F.R. S 413.134(f)(3). 
                    Therefore, on February 8, 1996, the Trustee sought
          equitable relief from the bankruptcy court under Bankruptcy Code S
          105(a), extending the one-year period for selling the Hospital's
          capital assets beyond the original February 17 deadline, in order
          not to forfeit the potential depreciation-adjustment claim. The
          Secretary objected, on the grounds that 42 C.F.R. S 413.134(f)(3)
          itself permits neither exceptions nor extensions and that the
          bankruptcy court accordingly lacked the equitable power to engraft
          an exception, pursuant to Bankruptcy Code S 105(a), which would
          bestow "substantive rights" upon the chapter 7 estate not autho-
          rized under the HHS regulations. 
                    The bankruptcy court granted the extension over the
          Secretary's objection. It relied upon the equitable powers con-
          ferred by Bankruptcy Code S 105(a), reasoning that: (1) in the
          special context of bankruptcy proceedings, the rigid one-year HHS
          deadline for selling capital assets was unreasonable, since a
          newly-appointed trustee may require more time to marshal estate
          assets; (2) strict compliance with the one-year HHS deadline would
          result in a "windfall" to HHS and deprive the Hospital of valuable
          assets (
                 viz., depreciation-adjustment reimbursements), to which it
          would otherwise be "entitled;" (3) an extension would not harm HHS,
          as the Trustee would not be allowed to file a depreciation-
                              
               Since the Trustee was unable to consummate a sale within the
          initial extension period, the court later granted the Trustee
          another extension. 
                                          5

          adjustment reimbursement claim based on the appraised value of the
          capital assets after February 17, 1996; and (4) HHS was estopped
          from contesting the bankruptcy court order, as it had acquiesced in
          two previous extensions of the 
                                       forty-five-day period for filing the
          final cost report, see 42 C.F.R. S 413.24(f); supra note 4.
                    The district court vacated the bankruptcy court order on
          intermediate appeal and the Trustee appealed. Meanwhile, the
          Trustee consummated a sale of the capital assets and submitted a
          reimbursement claim to HHS, estimated at between $300,000 and
          $1,000,000.
                                         II
                                     DISCUSSION
          A.   Equitable Estoppel
                    The Trustee first insists that HHS is estopped from
          claiming that the bankruptcy court lacked authority, under
          Bankruptcy Code S 105(a), to extend the one-year filing deadline
          prescribed in S 413.134(f)(3), since the government had acquiesced
          in two earlier bankruptcy court extensions of the  forty-five-day
          deadline for filing the Hospital's final cost report.
                                                               The Trustee
                              
               We review the equitable estoppel ruling under a mixed stan-
          dard, assessing the legal conclusion   de  novo and all factual
          findings for clear error.   See Granite 
                                                  State 
                                                         Ins. 
                                                              Co. v.  Smart
          Modular 
                  Techs., 
                          Inc., 76 F.3d 1023, 1028 (9th Cir. 1996);  Marine
          Transp. 
                  Servs. 
                         Sea-Barge 
                                   Group, 
                                           Inc. v. Python 
                                                          High 
                                                                Performance
          Marine Corp., 16 F.3d 1133, 1138 (11th Cir. 1994); A.C. Auckerman
          Co. v. R.L. 
                      Chaides 
                              Constr. 
                                      Co., 960 F.2d 1020, 1028 (Fed. Cir.
          1991).
               As a threshold matter, HHS contends that the bankruptcy court
          lacked subject matter jurisdiction to declare the one-year HHS
          deadline inoperative, because Congress has established an exclusive
                                          6

          essentially suggests that the verbal assurances from government
          counsel, 
                  see 
                      supra note 4, that there would be no opposition to the
          two extensions of the forty-five-day period for filing the final
          cost report, coupled with HHS acquiescence thereto, make this an
          "unusual" case in which equitable estoppel may be invoked against
          the government. The Trustee argues that the district court erred
          in ruling that he needed to show that the government had engaged in
          "affirmative misconduct," since the United States Supreme Court has
          never embraced lower court decisions which require such proof where
          a party seeks monetary recoveries (
                                           i.e., invading the public fisc).
          See 
             Schweiker v. 
                          Hansen, 450 U.S. 785, 788 (1981); 
                                                            Akbarin v. 
                                                                       INS,
          669 F.2d 839, 842 (1st Cir. 1982). According to the Trustee, HHS
          should be estopped even assuming its earlier acquiescence was
                              
          administrative/judicial appeals process governing HHS reimburse-
          ments, see 42 U.S.C. S 1395ii (incorporating   mutatis mutandi S
          405(h) of the Social Security Act, which provides that no HHS
          decision "shall be reviewed by any person, tribunal, or governmen-
          tal agency except as herein provided," and that "[n]o action
          against [HHS] shall be brought under section 1331 or 1346 of Title
          28 to recover on any claim arising under this subchapter"), a
          process which the Trustee has yet to exhaust.     See Heckler v.
          Ringer, 466 U.S. 602, 614-17 (1984) (barring all pre-exhaustion
          actions by courts where both "the standing and substantive basis"
          for the claim arise under the Medicare statute). On the other
          hand, the Trustee argues that S 405(h) plainly bars pre-exhaustion
          judicial review only in those courts whose jurisdiction arises
          under 28 U.S.C. SS 1331 and 1346, whereas bankruptcy court
          jurisdiction in the instant case arises under 28 U.S.C. S 1334. As
          the jurisdictional issue is problematic, 
                                                  compare, 
                                                           e.g., 
                                                                 In re Town
          & Country Home Nursing Servs., Inc.
                                            , 963 F.2d 1146, 1155 (9th Cir.
          1991), 
                with 
                     In re Upsher Labs., Inc.
                                             , 135 B.R. 117, 119-20 (Bankr.
          W.D. Mo. 1991), and the merits of the Trustee's appeal are not, 
                                                                        see
          infra, we elect to bypass the jurisdictional issue at this time.
          See 
             Institut Pasteur
                              v. 
                                 Cambridge Biotech Corp.
                                                        , 104 F.3d 489, 492
          (1st Cir.) ("appellate court may bypass jurisdictional questions
          where appeal would falter on merits even assuming jurisdiction"),
          cert. 
               denied, 65 U.S.L.W. 3741 (U.S. June 27, 1997) (No. 96-1698).
                                          7

          erroneous or inadvertent, as long as the Trustee reasonably relied
          to his detriment on the government's assurances. We conclude that
          the bankruptcy court erred.
                    All the authorities relied upon by the Trustee predated
          Office of Personnel Mgt.
                                  v. 
                                     Richmond, 496 U.S. 414, 420-22 (1990),
          in which the Supreme Court unequivocally observed that, at a bare
          minimum, its earlier precedents abjured any application of the
          doctrine of estoppel absent a showing of "affirmative misconduct"
          by the government. See, 
                                  e.g., 
                                        LaFlower v. 
                                                    United States
                                                                 , 849 F.2d
          8, 11-12 (1st Cir. 1988); 
                                   United States
                                                v. 
                                                   Ven-Fuel, Inc.
                                                                 , 758 F.2d
          741, 761 (1st Cir. 1985). The evidence adduced by the Trustee came
          up well short of the Richmond benchmark.
                    First and foremost, the Trustee and the bankruptcy court
          never afforded HHS itself a meaningful opportunity to respond to
          the S 413.24(f) extension motions; the first motion was never
          served on either the government or HHS, and the second motion was
          allowed by the bankruptcy court before HHS could file a formal
          response.  See supra note 4. Second, the Trustee reads far too
          much into the oral assurances given by the Assistant United States
          Attorney (AUSA) in March 1995, who simply stated that the govern-
          ment did not intend to oppose extension of the forty-five-day
          deadline. As there was no mention or suggestion that any deadline
          extensions were to be predicated on Bankruptcy Code S 105(a),
          however, there can have been no implicit concession that the
          extensions the Trustee was seeking were within the equitable power
          of the bankruptcy court under Bankruptcy Code S 105(a).
                                          8

                    Moreover, the government's ready acquiescence to the two
          earlier 
                 forty-five-day extensions is hardly remarkable, given that
          the HHS regulations themselves permit HHS to grant such extensions
          in various extenuating circumstances.        See 42 C.F.R. S
          413.24(f)(2)(ii) (hospital may obtain extension of 45-day deadline
          if its operations are "significantly affected due to extraordinary
          circumstances over which the [hospital] has no control, such as
          flood or fire"); 
                          id. S 405.1885 (hospital may be allowed to reopen
          and amend final cost report for up to three years). Whereas the
          one-year deadline prescribed in 42 C.F.R. S 413.134(f)(3) is
          subject to no such exceptions.
                    We therefore conclude that the Trustee reasonably could
          not have relied upon the oral assurances received from the AUSA
          regarding a regulatory deadline ( viz., S 413.24(f)), materially
          distinct from the one-year deadline prescribed in 42 C.F.R. S
          413.134(f)(3), as a basis for inferring a blanket government
          concession relating to the bankruptcy court's equitable power to
          override HHS regulatory deadlines. The estoppel claim accordingly
          fails. 
          B.   Administrative Deadline Extensions
               Under Bankruptcy Code Section 105(a)
                              
               These same principles likewise encumber any application of the
          law-of-the-case doctrine in these circumstances. See 
                                                               Knapp Shoes,
          Inc. v. Sylvania 
                           Shoe 
                                Mfg. 
                                     Corp., 72 F.3d 190, 197-98 (1st Cir.
          1995) (noting that law-of-the-case doctrine applies only to sequen-
          tial rulings on same issue).
               Following an intermediate appeal, we review    de  novo the
          conclusions of law made by the district court.    See LaRoche v.
          Amoskeag Bank
                       (
                        In re LaRoche
                                     ), 969 F.2d 1299, 1301 (1st Cir. 1992).
                                          9

                    The Trustee next contends that section 105(a) empowers
          the bankruptcy court to "harmonize" the Medicare statute, and its
          implementing regulations, with the Bankruptcy Code.
                                                             He points out
          that whereas Code provisions are designed generally to facilitate
          chapter 7 estate-property recoveries for the benefit of unsecured
          creditors, 
                    see, 
                         e.g., Bankruptcy Code S 363(f) (allowing chapter 7
          trustee to sell property "free and clear" of liens), the one-year
          HHS deadline for hospitals to conduct capital-asset sales through
          a chapter 7 trustee, see 42 C.F.R. S 413.134(f)(3), arbitrarily
          undermines efforts to preserve and maximize creditor recoveries by
          working a hypertechnical forfeiture of the depreciation-adjustment
          credit to which the debtor Hospital was otherwise entitled.
                    The Trustee thus characterizes the thrust of the chal-
          lenged filing deadline as an unfair administrative effort to reduce
          HHS's monetary exposure to a minimum. As the Trustee sees it, even
          assuming that any such administrative aim comported with congres-
          sional intent, see, e.g., Northwest Hosp., Inc. v. Hospital Serv.
          Corp., 687 F.2d 985, 995 (7th Cir. 1982) (invalidating HHS
          regulation imposing "blanket disallowance" rule which did not serve
          purposes of Medicare statute), whatever legitimate purpose is
          served by the HHS deadline is as well served by the equitable
                              
          Its interpretation of Bankruptcy Code S 105(a) presents a pure
          question of law as well.  See In re Jarvis, 53 F.3d 416, 418 (1st
          Cir. 1995). 
                Section 105(a) provides, in pertinent part: "The court may
          issue any order, process, or judgment that is necessary or
          appropriate to carry out the provisions of this title." 11 U.S.C.
          S 105(a).
                                         10

          remedy fashioned by the bankruptcy court under section 105(a):
          allowing the Trustee to file the S 413.134(f)(3) claim but
          employing the appraised value of the Hospital's capital assets at
          the one-year anniversary of its closure, rather than the sale price
          obtained after the one-year period expired. Thus, according to the
          Trustee, the bankruptcy court's harmonization of legitimate Code
          objectives and Medicare program concerns avoided any inequitable
          result while precluding a "windfall" to HHS.
                    Section 105(a) empowers the bankruptcy court to exercise
          its equitable powers    where "necessary" or "appropriate"    to
          facilitate the implementation of other Bankruptcy Code provisions.
          See supra note 10. Although expansively phrased, section 105(a)
          affords bankruptcy courts considerably less discretion than first
          meets the eye, and in no sense constitutes "'a roving commission to
          do equity.'" Chiasson v. 
                                   J. Louis Matherne & Assocs.
                                                              (
                                                               In re Oxford
          Mgt., Inc.
                   ), 4 F.3d 1329, 1334 (5th Cir. 1993) (citation omitted).
          See In 
                 re 
                    Lapiana, 909 F.2d 221, 224 (7th Cir. 1990); Donovan v.
          Bundy (In 
                    re 
                       Donovan), 183 B.R. 700, 708 (Bankr. W.D. Pa. 1995)
          (same). Instead, the equitable discretion conferred upon the
          bankruptcy court by section 105(a) "is limited and cannot be used
          in a manner inconsistent with the commands of the Bankruptcy
          Code." In re Plaza de Diego Shopping Ctr., Inc.
                                                        , 911 F.2d 820, 824
          (1st Cir. 1990). These limitations have been variously described.
                    First, Bankruptcy Code S 105(a) may not be invoked to
          alter substantive debtor rights defined under the applicable
          nonbankruptcy law.  See, e.g., Bird v. Carl's 
                                                        Grocery 
                                                                Co. (In 
                                                                         re
                                         11

          NWFX, 
                Inc.), 864 F.2d 593, 596 (8th Cir. 1988) ("An 'equitable
          setoff' such as that fashioned by the bankruptcy court in the
          present case is not a proper use of the bankruptcy court's
          equitable powers because it creates new substantive rights for the
          parties . . . ."); see also In re Continental Airlines Corp., 907
          F.2d 1500, 1509 (5th Cir. 1990) (holding that S 105(a) does not
          permit substantive modifications of labor agreement).
                    Following along these lines, the Secretary asserts that
          the Hospital's substantive right to claim a capital-asset deprecia-
          tion-adjustment credit was automatically extinguished because no
          capital-asset sale occurred within the one-year period prescribed
          in S 413.134(f)(3), and that an extinguished right cannot be
          resurrected under section 105(a).  See In 
                                                    re 
                                                       Chicago, 
                                                                 Milwaukee,
          St. Paul & Pac. R.R.
                             , 791 F.2d 524, 528 (7th Cir. 1986) ("The fact
          that a [bankruptcy] proceeding is equitable does not give the judge
          a free-floating discretion to redistribute rights in accordance
          with his [or her] personal views of justice and fairness, however
          enlightened those views may be."). The maxim relied upon by the
          Secretary reveals less than the complete picture, however, unless
          its application is attuned to the particular context.
                    Congress quite obviously intended to invest debtor
          estates and their representatives with certain rights, some of
          which 
               may 
                   augment prepetition rights possessed by the debtor under
          nonbankruptcy law. See 
                                 Johnson v. 
                                            First Nat'l Bank of Montevideo
                                                                          ,
          719 F.2d 270, 273 (8th Cir. 1983) (noting: "[W]here Congress has
          enacted bankruptcy legislation which conflicts with state law,
                                         12

          state law must yield."). But since section 105   itself is not a
          source of new substantive rights, the bankruptcy court may invoke
          section 105(a) only if the equitable remedy utilized is demon-
          strably necessary to preserve a right elsewhere provided in the
          Code.  See Norwest 
                             Bank 
                                  Worthington v. Ahlers, 485 U.S. 197, 206
          (1988) ("[W]hatever equitable powers remain in the bankruptcy
          courts must and can be exercised within the confines of the
          Bankruptcy Code"; "[u]nder this section, a court may exercise its
          equitable power only as a means to fulfill some specific Code
          provision."); Official Unsecured Creditors' Comm. v. Stern (In re
          SPM 
              Mfg. 
                   Corp.), 984 F.2d 1305, 1311 (1st Cir. 1993) ("[S]ection
          105(a) [does not] authorize courts to create substantive rights
          that are otherwise unavailable under the Code, or to expand the
          contractual obligations of parties."); 
                                                In re Dillon
                                                            , 194 B.R. 533,
          536 (Bankr. S.D. Fla. 1996).
                    In this vein, the Trustee argues, the Hospital was
          entitled to the deadline extensions granted by the bankruptcy court
          since this is the sort of "technical" accommodation that tends to
          maximize the overall value of the chapter 7 estate, hence fits
          within the penumbra    if not the express terms    of Bankruptcy
          Code S 363.  We need not address the two maxims mentioned above,
                              
                Bankruptcy Code S 363 provides, in relevant part:
                    The trustee, after notice and hearing, may
                    use, sell, or lease, other than in the ordi-
                    nary course of business, property of the
                    estate. 
          11 U.S.C. S 363(b)(1). The Trustee interprets the quoted provision
                                         13

          however, as there is a sounder foundation for the district court's
          conclusion.  See Baybank-Middlesex v.  Ralar 
                                                       Distribs., 
                                                                  Inc., 69
          F.3d 1200, 1202 (1st Cir. 1995) (court of appeals may affirm
          district court on any ground disclosed in the record); 
                                                               Max Sugarman
          Funeral 
                  Home, 
                        Inc. v. A.D.B. 
                                       Investors, 926 F.2d 1248, 1253 n. 9
          (1st Cir. 1991) (same). 
                    The bankruptcy court may not utilize section 105(a) if
          another, more particularized Code provision 
                                                       here, section 108(b)
             impedes the requested exercise of equitable power.  See In 
                                                                         re
          Fesco Plastics Corp., 996 F.2d 152, 154 (7th Cir. 1993) ("By the
          same token, when a specific Code section addresses an issue, a
          court may not employ its equitable powers to achieve a result not
          contemplated by the Code."); Landsing Diversified Props. v. First
          Nat'l Bank & Trust Co.
                                (
                                 In re Western Real Estate Fund, Inc.
                                                                     ), 922
          F.2d 592, 601 (10th Cir. 1990) ("[A] bankruptcy court's supplemen-
          tary equitable powers [under S 105(a)] may not be exercised in a
          manner that is inconsistent with the other, more specific provi-
          sions of the Code."), 
                               modified 
                                        on 
                                           other 
                                                 grounds, 932 F.2d 898 (7th
          Cir. 1991);  Continental  
                                   Airlines, 907 F.2d at 1509;    Levit v.
          Ingersoll 
                    Rand 
                         Fin. 
                              Corp., 874 F.2d 1186, 1198 n. 10 (7th Cir.
          1989) (same); 
                       Carter v. 
                                 Peoples Bank & Trust Co.
                                                         (
                                                          In re BNW, Inc.
                                                                         ),
          201 B.R. 838, 847 (Bankr. S.D. Ala. 1996) ("When the Bankruptcy
          Code establishes a right explicitly, a bankruptcy court cannot
                              
          as necessarily implying that a trustee has the right "to liquidate
          property of the Debtor's estate at any time and under any circum-
          stances that would prove beneficial to the Debtor's estate," unless
          other provisions of S 363 expressly prohibit the Trustee's choice
          of timing or circumstances.
                                         14

          expand or contract that right implicitly through use of equitable
          powers."); 2 Lawrence P. King, Collier on Bankruptcy, q 105-5 (15
          ed. 1996) (S 105 does not "override explicit mandates of other
          sections of the Bankruptcy Code or mandates of other state and
          federal statutes.") (citations omitted); 
                                                  see 
                                                      also, 
                                                            e.g., 
                                                                  Chiasson,
          4 F.3d at 1334 ("This [payment] order effectuated an impermissible
          substantive alteration of the Code's provisions."). Unfortunately,
          however, by focusing exclusively on the two principles first
          discussed above, the parties managed to parry the legitimate
          concerns harbored by the bankruptcy court regarding the dissonant
          theme reflected in section 108(b), to which we now turn.
                    Bankruptcy Code S 108(b) states: 
                    Except as provided in subsection (a) of this
                    section, if applicable nonbankruptcy law, an
                    order entered in a nonbankruptcy proceeding,
                    or an agreement fixes  a period within  which
                    the debtor or an individual protected under
                    section 1201 or 1301 of this title  may  file
                    any pleading, demand, notice, or proof of
                    claim or loss, cure a default, or perform any
                    other similar act,  and such  period has  not
                    expired before the date of the filing of the
                    petition, the trustee may only file, cure, or
                    perform, as the case may be, before the later
                    of    
           
                         (1)  the end of  such period, including
                              any suspension of such period oc-
                              curring on or after the commencement
                              of the case; or
             
                         (2)  60 days after the order for relief.
          11 U.S.C. S 108(b) (emphasis added). The bankruptcy court
          considered, sua  sponte, whether section 108(b) precluded its
          reliance on section 105(a) as authority for extending the one-year
                                         15

          regulatory deadline imposed by the HHS regulation.
                                                            It received no
          aid from the parties, however, as the Trustee and the Secretary
          agreed below that (i) section 108(b) was inapposite because the
          Trustee was not seeking an extension to 
                                                 file 
                                                      a 
                                                        proof 
                                                              of 
                                                                 claim, and
          (ii) section 108(b) applies to "filing deadlines" only. The
          parties likewise noted that 42 C.F.R. S 413.134(f)(3) merely
          requires the Trustee to consummate a capital-asset sale by the
          first anniversary of the Hospital's closure, not that the Trustee
          need have filed the S 413.134(f)(3) depreciation-adjustment claim
          within the one-year period. The cramped construction accorded
          section 108(b) by the parties cannot stand.
                    Under its plain terms, as abundantly indicated,   inter
          alia, by its inclusion of the generic phrase "cure a default,"
          section 108(b) is not restricted to trustee initiatives that may be
          characterized as "filings." For one thing, a "cure" for a default
          need involve no "filing" at all, depending on the particular
          circumstances. Yet more importantly, section 108(b) also contains
          the catchall phrase: or "perform any other similar act."      See
          Autoskill, 
                     Inc. v. National 
                                      Educ. 
                                            Support 
                                                    Systs., 994 F.2d 1476,
          1484 (10th Cir. 1993) ("Although S 108(b) does not specifically
                              
                There is no dispute that the Medicare statute and the HHS
          regulation qualify as "applicable nonbankruptcy law" under S
          108(b). See 
                      Gladwell v. 
                                  Harline (
                                           In re Harline
                                                       ), 950 F.2d 669, 674
          (10th Cir. 1991) ("Sections 108(a), (b) & (c) all use the phrase
          'applicable nonbankruptcy law,' and courts have held that phrase
          in these subsections refers to federal law.") (collecting cases);
          Eagle-Picher Indus., Inc. v. United States, 937 F.2d 625, 639-40
          (D.C. Cir. 1991) (Federal Tort Claims Act is "applicable
          nonbankruptcy law" under S 108(b)).
                                         16

          refer to notices of appeal, the statute includes a broad catchall
          extending the time in which a debtor or trustee may 'perform any
          other similar act' in addition to the steps listed.");  In re G-N
          Partners, 48 B.R. 462, 467 (Bankr. D. Minn. 1985) ("[T]hat S 108(b)
          is 'broader' than the listed items 'is obvious from its reading.'")
          (citation omitted).
                    Thus, the pertinent inquiry in construing section 108(b)
          in the present context is whether all the undertakings expressly
          enumerated in it share some common characteristic. We think the
          answer is evident, since each undertaking enumerated in section
          108(b) contemplates the exercise of a right, or the performance of
          a duty, prescribed by nonbankruptcy law in the prepetition
          environment encountered by the debtor, failing which any related
          prepetition legal right would be forfeit.
                    Moreover, even assuming the term "similar," as used in
          section 108(b), see supra p. 15, were less than unambiguous, its
          legislative history is clear beyond cavil. Section 108(b) was
          designed to "permit the trustee, when he steps into the shoes of
          the debtor, an extension of time for filing an action 
                                                              or 
                                                                 doing 
                                                                       some
          other 
               act 
                   that 
                        is 
                           required 
                                    to 
                                       preserve 
                                                the 
                                                    debtor's 
                                                             rights." H.R.
          Rep. No. 95-595, at 318 (1977),   reprinted in 1978 U.S.C.C.A.N.
          5963, 6275; 
                     see 
                         also S. Rep. No. 95-989, at 30 (1978), 
                                                               reprinted 
                                                                         in
          1978 U.S.C.C.A.N. 5787, 5816 (same).    See 1 Lawrence P. King,
          Collier 
                  on 
                     Bankruptcy q 108.03, at 108-6 (15th ed. 1991) (noting
          that Congress included S 108(b) "so that the trustee could take the
          necessary steps to preserve for the estate rights which might
                                         17

          otherwise be barred"); 
                                accord 
                                       First Nat'l Fidelity Corp.
                                                                  v. 
                                                                     Perry,
          945 F.2d 61, 65 (3d Cir. 1991) (holding that extension of time for
          exercising state-law right to redeem foreclosed property from 3 to
          5 years would contravene S 108(b)(2), which limits extensions to 60
          days); 
                Counties Contracting & Constr. Co.
                                                  v. 
                                                     Constitution Life Ins.
          Co., 855 F.2d 1054, 1058 n.4 (3d Cir. 1988) (holding that S 108(b)
          pertains to payment of insurance policy premium during grace
          period, "an act necessary to continue the policy in effect");
          Whispering 
                     Bay 
                         Campground, 
                                      Inc. v. Fagan ( In 
                                                         re 
                                                            Whispering 
                                                                        Bay
          Campground, 
                      Inc.), 850 F.2d 443, 445-46 (8th Cir. 1988) (same;
          redemption rights under Minnesota law).
                    The outer reaches of section 108(b), in relation to
          contractual time limitations other than "filing" deadlines, remain
          in sharp dispute.  Compare,  e.g., Good 
                                                  Hope 
                                                       Refineries, 
                                                                   Inc. v.
          Benavides, 602 F.2d 998, 1002-03 (1st Cir. 1979) (holding that
          neither Bankruptcy Act S 11(e) nor its successor, Bankruptcy Code
          S 108(b), afforded trustee 60-day extension to exercise option
          contract), 
                    with 
                         In re Santa Fe Dev. & Mortgage Corp.
                                                             , 16 B.R. 165,
          167-68 (B.A.P. 9th Cir. 1981) (holding that S 108(b) extends
          "option contract" for 60 days). These disputes are no less likely
          where, as here, the deadline is fixed not by contract but by
          "applicable . . . law" (viz., the Medicare statute), but involves
          something more than a paper filing.
                    In all likelihood the applicability of section 108(b)
          will be decided on a case-by-case basis until the provision is
          clarified by Congress or the Supreme Court. Regulatory deadlines
                                         18

          are clearly embraced by section 108(b)'s reference to "applicable
          nonbankruptcy law," and section 108(b) cannot be wholly limited to
          paper filings, since it refers to default cures. For the present
          we are satisfied that the one-year sale requirement is sufficiently
          linked to an ongoing HHS proceeding to invoke section 108(b) and
          that no pertinent consideration makes its application inappropri-
          ate. 
                    In the present context, an indispensable undertaking to
          preserve the Hospital's prepetition right to claim a capital-asset-
          depreciation adjustment from HHS was the sale of its capital
          assets, and the applicable HHS regulations unconditionally fixed
          the deadline for doing so at one year from the date the Hospital
          ceased its participation in the Medicare program. Accordingly,
          under the plain terms of section 108(b), the fact that the Trustee
          would have had to take a further step after the sale, in order to
          preserve the right of the chapter 7 estate to any such adjustment
          (i.e., file a formal S 413.134(f)(3) claim with HHS), was altogeth-
          er immaterial in the present circumstances because both undertak-
          ings were necessary to protect the Hospital from an irremediable
          forfeiture of its rights under the applicable nonbankruptcy law.
                    Thus, although section 108(b) obviously allows the
          trustee in bankruptcy a sixty-day grace period unavailable to the
          prepetition debtor, it just as plainly bespeaks a legislative
          intent to cut off the extension period, either at 60 days from the
          filing of the chapter 7 petition or upon the expiration of any
          remaining prepetition period, whichever occurs later.  See, e.g.,
                                         19

                    In the present context, an indispensable undertaking to
          preserve the Hospital's prepetition right to claim a capital-asset
          depreciation adjustment from HHS was the sale of its capital
          assets, and the applicable HHS regulations unconditionally fixed
          the deadline for doing so at one year from the date the Hospital
          ceased its participation in the Medicare program. Accordingly,
          under the plain terms of section 108(b) the fact that the Trustee
          would have had to take a further step after the sale, in order to
          preserve the right of the chapter 7 estate to any such adjustment
          (i.e., file a formal S 413.134(f)(3) claim with HHS), was altogeth-
          er immaterial in the present circumstances because both undertak-
          ings were necessary to protect the Hospital from an irremediable
          forfeiture of its rights under the applicable nonbankruptcy law.
                    Thus, although section 108(b) obviously allows the
          trustee in bankruptcy a sixty-day grace period unavailable to the
          prepetition debtor, it just as plainly bespeaks a legislative
          intent to cut off the extension period, either at 60 days from the
          filing of the chapter 7 petition or upon the expiration of any
          remaining prepetition period, whichever occurs later.  See, e.g.,
          Johnson, 719 F.2d at 277-78 (holding that bankruptcy court cannot
          use S 105(a) to extend period for redeeming property under state
          law, a matter within S 108(b)'s ambit).  
                              
                We allow, however, that S 108(b) may not invariably bar
          relief; for example, where a more specific Code provision unambigu-
          ously provides an extension incompatible with the 60-day provision
          in S 108(b)(2). See, 
                               e.g., 
                                     Moody v. 
                                              Amoco Oil Co.
                                                           , 734 F.2d 1200,
          1215 (7th Cir. 1984) ("We hold, however, that section 108(b) does
          not apply to curing defaults in executory contracts. Section 365
                                         20

                    The Trustee complains, nevertheless, that it is unrealis-
          tic to expect a newly appointed trustee to marshal estate assets
          within sixty days of the petition, let alone sell all the capital
          assets. Even though this may well be a compelling policy consider-
          ation, however, Congress nonetheless surely envisioned that it
          might be difficult to meet the sixty-day deadline imposed by
          section 108(b)(2) in some circumstances. Yet it chose to legislate
          no exception.  
                     Furthermore, the Trustee has not alleged that HHS was
          responsible for any delay in selling the Hospital's capital assets.
          Compare Johnson, 719 F.2d 270, 274-75 ("There is no claim that
          [appellant] or any other party was guilty of any wrongdoing which
          adversely affected the debtors' ability to redeem the property
          within the statutory period. '[E]quity is available to protect
          property rights of the innocent debtor from the wrongful acts of
          other persons; however, equity does not extend to situations in
          which the debtor is simply unable to make the required payment
                              
          specifically governs the time for curing defaults in executory
          contracts, and thus, it controls here."). The Trustee argues that
          S 363(b) is such a Code provision, because its aim is to maximize
          the recoveries realized from sales of estate assets.   See  supra
          note 11. Nevertheless, it is undisputed that S 363(b) provides no
          express extension which could be thought to trump S 108(b)(2).
          Furthermore, the extension sought by the Trustee had nothing to do
          with facilitating a sale of estate assets, as distinguished from
          preserving to the debtor a right in other property (   viz., HHS
          depreciation allowances) which happened to hinge on the timely
          occurrence of a sale of capital assets. On this collateral matter,
          Congress left S 363 conspicuously silent.
                Competing policy considerations were at work here as well.
          Thus, for example, S 108(b)(2) affords contingent obligors of a
          chapter 7 estate    like HHS    a modicum of finality. 
                                         21

          within the prescribed time.'") (citation omitted), 
                                                           with 
                                                                Otoe County
          Nat'l Bank
                    v. 
                       Easton (
                               In re Easton
                                           ), 882 F.2d 312, 315-16 (8th Cir.
          1989) (departing from Johnson holding where "bad faith" has been
          demonstrated).
                    Although chapter 7 creditors may be deprived of potential
          recoveries unless the trustee is able to sell a capital asset in
          time to preserve the debtor estate's right to a postpetition
          capital-asset depreciation adjustment from HHS, we are not at
          liberty "to redistribute rights in accordance with [our] personal
          views of justice and fairness."   Chicago, 
                                                     Milwaukee, 
                                                                St. 
                                                                    Paul 
                                                                          &
          Pac. R.R.
                  , 791 F.2d at 528. 
                                     See 
                                         Heyman v. 
                                                   M.L. Marketing Co.
                                                                     , 1997
          WL 324382, at *5 (4th Cir. June 16, 1997) (No. 95-2929) ("Bankrupt-
          cy filings often result in procedural confusion. Congress antici-
          pated this confusion and made allowances for it. Among other
          provisions, 11 U.S.C. S 108(b) provides trustees with at least
          sixty days to take control of a case and to make appropriate
          filings."). Rather, once Congress has weighed the competing policy
          concerns affecting the scope of relief available under section
          108(b), see supra note 14, we must abide its legislative decision
          unless it infringes a constitutional mandate.  See Pressimone v.
          Commissioner (In re Pressimone), 39 B.R. 240, 246 (N.D.N.Y. 1984)
          ("Courts [invoking S 105(a)] . . . have expressed a laudable
          concern for the rehabilitation of debtors . . . [but] in so doing
          . . . have independently weighed the competing policy objectives at
          stake, thereby substituting their own judgment for that of
          Congress."). In the present circumstances, therefore, the
                                         22

          appropriate recourse for trustees in bankruptcy institutionally
          overburdened by a S 413.134(f)(3) deadline, or for the creditor
          interests adversely affected thereby, is not through 11 U.S.C. S
          105(a), but congressional amendment of section 108(b), or a rule-
          making modification to 42 C.F.R. S 413.134(f)(3),     see  id. S
          1395x(v)(1)(O)(ii).
                                         23

                                         III
                                     CONCLUSION
                    Since Bankruptcy Code S 105(a) affords the bankruptcy
          court no equitable power to extend the one-year HHS deadline
          imposed by 42 C.F.R. S 413.134(f)(3), and its extension is
          impermissible under Bankruptcy Code S 108(b) as well, the district
          court judgment is  affirmed. The parties shall bear their own
          costs. 
                    SO ORDERED. 
                                         24