In Re Mark Anthony Construction, Inc., Debtor. United States of America v. Ian Ledlin, Trustee

This case presents a single, straightforward question of statutory construction. The question is, however, a difficult one. We must, in effect, seek to divine the substantive import, if any, of a statute’s silence. In such a case reasonable arguments can often be made for either party’s position. Here, our decision is one shaped as much by the application of fundamental legal principles as by consideration of the previous cases which have examined the question.

The question we answer is framed easily enough: is the interest which accrues on taxes due after the filing of a bankruptcy petition afforded first priority status as an administrative expense of the bankruptcy estate? It is explicit in the Bankruptcy Code (“Code”) that the taxes which accrue after the filing of such a petition are treated as administrative expenses. Any fines or penalties relating to post-petition taxes are likewise afforded first priority status by the Code. Furthermore, before the Bankruptcy Code was enacted in 1978, the Supreme Court had explicitly held that post-petition interest was also properly deemed an administrative expense.

The dilemma we resolve here stems from two facts. First, the…