In re Warman

MEMORANDUM JOHN C. MINAHAN, Jr., Bankruptcy Judge. This Chapter 7 bankruptcy case presents the question of whether administrative claims arising and allowed in a previous Chapter 12 bankruptcy case are entitled to administrative priority under 11 U.S.C. § 507(a)(1). The Chapter 7 trustee objects to such allowance of the Chapter 12 trustee’s claim asserting that the claim should be treated as unsecured because the services of the Chapter 12 trustee were rendered prior to the commencement of this Chapter 7 case. The objection is sustained. I conclude that the Chapter 12 trustee’s claim is not entitled to administrative priority treatment in this Chapter 7 case. A similar question was before the Eighth Circuit Court of Appeals: We therefore conclude that the phrase, “of the kind specified” in § 507(a)(1), limits first priority distribution under § 726 to claims which have qualified as administrative expense claims in that Chapter 7 proceeding. See In re Larsen, 59 F.3d 783 at 786 (8th Cir.1995) (attorney fees incurred by a debtor in prior Chapter 11 and Chapter 12 bankruptcy proceedings are not entitled to administrative expense treatment in a subsequent Chapter 7 proceeding). The claim of the Chapter 12 trustee did not qualify as administrative claims in this Chapter 7 case, but so qualified in debtors’ prior Chapter 12 case. The Chapter 12 trustee’s claim, therefore, does not qualify under § 507(a)(1) for administrative expense treatment in this Chapter 7 case. The objection is sustained. IT IS THEREFORE ORDERED, that the Chapter 12 trustee’s Motion to Approve Administrative Claim and Request for Payment (Fil. # 17) is denied. The Chapter 12 trustee’s claim shall be treated and allowed as an unsecured claim. IT IS SO ORDERED.