In December, the U.S. Supreme Court granted a petition for certiorari in bankruptcy case In re Piccadilly Cafeterias Inc. The issues raised are worth reviewing, especially as well-settled 3rd Circuit jurisprudence is implicated.
In 2003, the 3rd U.S. Circuit Court of Appeals issued its opinion in In re Hechinger Investment Co. of Delaware. In that case, the court was asked to decide whether a transfer of real property is exempt from real estate transfer tax under �1146(c) of the Bankruptcy Code (now restyled as �1146(a)), when the transfer was not authorized “under a plan confirmed under section 1129,” but rather authorized pursuant to �363 of the code. Then-Circuit Judge Samuel Alito, writing for the court, said, quite simply, no. The Hechinger court concluded that the most natural reading of the phrase “under a plan confirmed” means that the transfer is “authorized” by such a plan, and thus the �1146(c) exemption does not apply to pre-confirmation transfers of real property.
