Cranberry Growers Cooperative v. Layng, No. 18-3289 (7th Cir. 2019)Annotate this Case
Under 28 U.S.C. 1930(a)(6), quarterly fees paid by a chapter 11 debtor to the bankruptcy Trustee are based on the debtor’s disbursements. The Bankruptcy Court determined that certain payments made by the customers of CranGrow to its lender should not be considered “disbursements” for purposes of that calculation. The payments covered a post-petition revolving line of credit that was used both to pay operating expenses and reduce the balance of CranGrow’s pre-petition debt to the same lender. CranGrow’s customers made payments to the lender directly. The Seventh Circuit reversed, holding that the language of the fee statute requires that payments made by CranGrow’s customers to CranGrow’s lender be considered disbursements. The term “disbursements” has been interpreted broadly to mean all payments by or on behalf of the debtor. The payments by CranGrow’s customers to CoBank were payments made on behalf of CranGrow and resulted in the reduction of CranGrow’s prepetition debt. The customer payments, therefore, are disbursements under section 1930(a)(6). The court found no authority for a waiver and declined “CranGrow’s belated invitation to consider the constitutionality of the fee statute.