CASES ADJUDGED
IN THE
SUPREME COURT OF THE UNITED STATES
AT
OCTOBER TERM, 1999
certiorari to the united states court of appeals for the eighth circuit
No. 99-409. Argued March 20, 2000—Decided May 30, 2000
During attempted reorganization under Chapter 11 of the Bankruptcy
Code, debtor Hen House Interstate, Inc., obtained workers' compensation insurance from petitioner Hartford Underwriters. Although Hen House repeatedly failed to make the monthly premium payments required by the policy, Hartford continued to provide insurance. The reorganization ultimately failed, and the court converted the case to a Chapter 7 liquidation proceeding and appointed a trustee. Learning of the bankruptcy proceedings after the conversion, and recognizing that the estate lacked unencumbered funds to pay the premiums owed, Hartford attempted to charge the premiums to respondent bank, a secured creditor, pursuant to 11 U. S. C. § 506(c). The Bankruptcy Court ruled for Hartford, and the District Court affirmed, but the en banc Eighth Circuit reversed, concluding that § 506(c) could not be invoked by an administrative claimant.
Held: Section 506(c) does not provide an administrative claimant of a bankruptcy estate an independent right to seek payment of its claim from property encumbered by a secured creditor's lien. Pp. 4-14.
(a) As an administrative claimant, petitioner is not a proper party to seek recovery under § 506(c), which provides: "The trustee may recover from property securing an allowed secured claim the . . . costs
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