The U.S. Court of Appeals for the Tenth Circuit―in Rajala v. Gardner, 709 F.3d 1031 (10th Cir. 2013)―has joined the Second Circuit and departed from the Fifth Circuit by holding that an allegedly fraudulently transferred asset is not property of the estate until recovered pursuant to section 550 of the Bankruptcy Code and therefore is not covered by the automatic stay. According to the court, its decision “gives Congress’s chosen language its ordinary meaning, and abides by a rule against surplusage.”

In keeping with the courts’ narrow construction of what constitutes “substantial contribution” in a chapter 11 case, an Ohio bankruptcy court in In re AmFin Financial Corp., 2012 WL 652018 (Bankr. N.D. Ohio Feb. 28, 2012), denied administrative- expense priority to the fees and expenses of the holders of approximately $100 million in senior notes (the “Senior Noteholders”) issued by debtor AmFin Financial Corporation (“AFC”).

In keeping with the courts’ narrow construction of what constitutes “substantial contribution” in a chapter 11 case, an Ohio bankruptcy court in In re AmFin Financial Corp., 2012 WL 652018 (Bankr. N.D. Ohio Feb. 28, 2012), denied administrative- expense priority to the fees and expenses of the holders of approximately $100 million in senior notes (the “Senior Noteholders”) issued by debtor AmFin Financial Corporation (“AFC”).