In re Exec. Air Serv., Inc.
APPEAL
Unpublished
Management company sought approval of its management agreement with debtor, which included a provision that debtor would seek an order awarding manager superpriority on its advances, pursuant to 11 U.S.C. § 364(c). Debtor issued a notice of hearing on the priority issue, indicating that manager's advances would be treated as administrative expenses and would be paid as priority claims under 11 U.S.C. § 507. Manager received copies of the notice, but did not object to it or suggest any changes. The bankruptcy court approved the management agreement without addressing the priority issue. More than a year later, manager realized it had not been awarded superpriority and moved to amend the court's approval order to include such priority, nunc pro tunc, to the date of the approval order. The bankruptcy court ruled that the priority notice that had been given was insufficient to allow superpriority. Manager appealed, and the district court held that nunc pro tunc orders may only be granted when an act was actually done but not properly recorded, and that there had not been any grant of superpriority to manager at the previous hearing. The district court also agreed with the bankruptcy court's conclusion that the notice of hearing did not adequately advise other administrative creditors that manager's claims would be paid prior to theirs, as is required by § 364. The district court considered manager's equitable claims, including that other creditors were aware that manager's advances had been made based on its belief that it had superpriority status, but concluded that the record was insufficient to resolve those claims. Since manager had not submitted evidence in support of its claim, and no error had been committed at the trial level, the bankruptcy court's decision was affirmed.