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.

Debtor had agreed to act as escrow agent on a loan from plaintiff to a third party, but improperly used escrowed funds to pay its own debts to a good faith creditor. Chapter 7 trustee recovered the funds from debtor's creditor on the ground that the payments had been preferences, and plaintiff filed an adversary proceeding contending that the recovered amount was subject to a constructive trust in its favor. The bankruptcy court ruled in favor of trustee, concluding that the recovered funds were not subject to a trust, although plaintiff did have an unsecured claim against debtor's estate based on debtor's wrongful disbursement of escrowed funds. This decision was affirmed by the district court in 226.pdf and, ultimately, by the Tenth Circuit, sitting en banc, in 313a.pdf.

The bankruptcy court granted chapter 11 debtor's petition to reject its collective bargaining agreements with unions that represented the majority of its employees, which order was affirmed by the district court. The Tenth Circuit reversed and remanded on the ground that the lower courts had failed to make the detailed findings of fact required for rejection of such contracts. Specifically, the Circuit held that a "doomsday" finding, that the collective bargaining agreements were so burdensome that performance of them would result in liquidation of the debtor, should not be controlling. Instead, the bankruptcy court has a special responsibility to make detailed findings, after careful scrutiny of the equities of all parties in interest, that the balance of the equities favors rejection.

In the bankruptcy court, trustee for Ponzi scheme debtors avoided transfers made by debtors to their sales agents, as fraudulent transfers under 11 U.S.C. § 548. On appeal, sales agents argued that the bankruptcy court lacked subject matter jurisdiction over the avoidance action because debtors were not "persons" eligible for bankruptcy relief, as defined in 11 U.S.C. § 109. Appellants also argued that debtors could not meet the "good faith" requirement for filing bankruptcy petitions, and had no interest in the transferred funds that could be enforced by the trustee, because all of "debtors' property" had been obtained by fraud. The district court held that debtors qualified as "business trusts," which are within the § 109 definition of "corporations," and rejected appellants' first claim. The district court also rejected appellants' good faith claim, on the ground that it was not raised in the bankruptcy court and was a matter within the bankruptcy court's discretion. Appellants' claim that debtors had no interest in the transferred funds was also rejected, based on the reasoning in 180.pdf. However, the district court determined that the bankruptcy court erred in ruling that appellants had failed to convey "legally cognizable value" for the payments they received, concluding that appellants' services constituted "value" as a matter of law. The case was therefore remanded for factual findings by the bankruptcy court on the issue of whether that value was "reasonably equivalent" to the payments appellants received.