In Re Irfm, Inc., Debtor. Robert P. Mosier, Trustee v. Kroger Company

We must decide whether the statute of limitations under the pre-1994 version of the Bankruptcy Code begins running — for a Chapter 7 trustee to bring an avoidance action — from the time the bankruptcy petition is filed or from the time the trustee is appointed.

I

The relevant dates in this ease are as follows:

On July 22,1988, IRFM, Inc. filed a Chapter 11 bankruptcy petition.

On October 3,1989, the case was converted to a Chapter 7 bankruptcy.

On October 14, 1989, Robert Mosier was appointed as the Chapter 7 trustee.

On October 11,1991, Mosier filed the complaint in this suit pursuant to 11 U.S.C. § 547 to recover $676,963.61 in allegedly preferential transfers from IRFM to Kroger Company.

The applicable statute of limitations for such actions is two years. 11 U.S.C. § 546 (a). Measured from the date the Chapter 11 petition was filed, Mosier’s suit was too late. Measured from the date of his appointment as Chapter 7 trustee, however, the suit was just in time.

The district court, reviewing an appeal from the bankruptcy court, held that Mosier’s action was barred by the statute of limitations because it was not brought within two years after IRFM’s Chapter 11 petition was…