Haining Wansheng Sofa Co., Ltd. v. World Imports Ltd. (In re World Imports, Ltd. et al.), No. 16-1357, 2017 WL 2925429 (3d Cir. Mar. 8, 2017) and In re SRC Liquidation, LLC, No. 15-10541 (BLS), 2017 WL 2992718 (Bankr. D. Del. July 13, 2017)In two recent Opinions, the Third Circuit Court of Appeals and the Delaware Bankruptcy Court clarified that the word "received" in section 503(b)(9) of the Bankruptcy Code requires a showing that goods were delivered into the physical possession of a debtor or its agent within the 20 days before a debtor's petition date (the "20-Day Period"). Under the Third Circuit's holding in Haining Wansheng Sofa Co., Ltd. v. World Imports Ltd. (In re World Imports, Ltd. et al.) and the Bankruptcy Court's holding in In re SRC Liquidation, LLC, neither receipt of goods by a common carrier nor receipt by a debtor's customer as the result of a drop shipment within the 20-Day Period satisfy the standard required to render a claim eligible for administrative priority. The decisions reinforce courts' strict construction of section 503(b)(9). Read More ›Tags: Administrative Expense Claims
