The U.S. Bankruptcy Court for the Eastern District of Pennsylvania recently issued one of the first decisions in the 3rd U.S. Circuit Court of Appeals to interpret �503(b)(9), an important new Bankruptcy Code provision passed under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA): In re Bookbinders’ Restaurant Inc. �503(b)(9) is certain to impact the relationship between a debtor seeking to reorganize and the trade vendors that deal with it.
Under �503(b)(9), a vendor that sells goods to a debtor in the ordinary course of the debtor’s business, which goods are delivered within 20 days before the petition date, is entitled to an allowed administrative expense priority claim. Prior to BAPCPA, goods delivered within this pre-petition time frame resulted in a non-priority unsecured claim for the seller. Thus, �503(b)(9) enhances the creditor’s position and imposes additional costs upon the debtor.
