U.S. Code
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Title 11
» Chapter CHAPTER 11— REORGANIZATION › Subchapter SUBCHAPTER IV— RAILROAD REORGANIZATION
11 U.S.C. § 1171
Priority claims
(a) There shall be paid as an administrative expense any claim of an individual or of the personal representative of a deceased individual against the debtor or the estate, for personal injury to or death of such individual arising out of the operation of the debtor or the estate, whether such claim arose before or after the commencement of the case.(b) Any unsecured claim against the debtor that would have been entitled to priority if a receiver in equity of the property of the debtor had been appointed by a Federal court on the date of the order for relief under this title shall be entitled to the same priority in the case under this chapter.(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2643; Pub. L. 98–353, title III, § 522, July 10, 1984, 98 Stat. 388.)Historical and Revision Noteslegislative statementsSection 1171 of the House amendment is derived from section 1170 of the House bill in lieu of section 1173(a)(9) of the Senate amendment.
house report no. 95–595[Section 1170] This section [enacted as section 1171] is derived from current law. Subsection (a) grants an administrative expense priority to the claim of any individual (or of the personal representative of a deceased individual) against the debtor or the estate for personal injury to or death of the individual arising out of the operation of the debtor railroad or the estate, whether the claim arose before or after commencement of the case. The priority under current law, found in section 77(n) [section 205(n) of former title 11], applies only to employees of the debtor. This subsection expands the protection provided.
Subsection (b) follows present section 77(b) of the Bankruptcy Act [section 205(b) of former title 11] by giving priority to any unsecured claims that would be entitled to priority if a receiver in equity of the property of the debtor had been appointed by a Federal court on the date of the order for relief under the bankruptcy laws. As under current law, the courts will determine the precise contours of the priority recognized by this subsection in each case.
Editorial NotesAmendments1984—Subsec. (b). Pub. L. 98–353 substituted “the same” for “such”.
Statutory Notes and Related SubsidiariesEffective Date of 1984 AmendmentAmendment by Pub. L. 98–353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title.
Notes of Decisions
Wheeling-Pittsburgh Steel Corp. v. McCune, 836 F.2d 153 (3rd Cir. 1987).
· cites it 7× “§§ 51-60 (1982), against MSW for $65,000 and $60,000 respectively, but who had not received payment, filed separate motions in the bankruptcy court to require MSW to comply with 11 U.S.C. § 1171 (a). That section provides priority as an “administrative expense”, for personal…”
In Re CoServ, L.L.C., 273 B.R. 487 (Bankr. N.D. Tex. 2002).
“The Rule was later adopted in 11 U.S.C. § 1171 (b) of the Code, part of Subchapter IV of Chapter 11, which deals just with railroad reorganizations.”
B & W Enter., Inc. v. Goodman Oil Co. (In Re B & W Enter., Inc.), 19 B.R. 421 (Bankr. D. Idaho 1982).
· cites it 2× “§ 1171 (b), continues the policy of the Act which allowed unsecured claims in a railroad reorganization to gain the priority of treatment they would have received if a receiver in equity had been appointed on the date the reorganization was commenced, i.”
In Re CF & I Fabricators of Utah, Inc., 199 B.R. 986 (Bankr. D. Utah 1996).
“Bar dates were created for indemnification, fee claims, claims arising under the Coal Industry Retiree Health Benefits Act of 1992, claims against the Colorado and Wyoming Railway pursuant to 11 U.S.C. § 1171 , and for other administrative claims.”
In re Boston & Maine Corp., 634 F.2d 1359 (1st Cir. 1980).
· cites it 3× “§ 205 (b) (1976), now 11 U.S.C. § 1171 (b), and in all other respects affirmed.”
In re Michigan Interstate Ry. Co., 87 B.R. 921 (E.D. Mich. 1988).
· cites it 4× “Both claimants seek an equitable priority pursuant to 11 U.S.C. § 1171 (b). 1 The trustee has filed objections to claimants’ requests for priority treatment; the trustee does not object to the amounts of the claims.”
B & W Enter., Inc. v. Goodman Oil Co., 713 F.2d 534 (9th Cir. 1983).
· cites it 2× “The language of the 1978 Act, 11 U.S.C. § 1171 (b), is the same in substance as that of Section 77(b), 2 and there is little doubt that Congress intended that § 1171(b) operate to continue the Six Months Rule in granting certain creditors priority.”
In Re McLean Indus., Inc., 103 B.R. 424 (Bankr. S.D.N.Y. 1989).
· cites it 2× “It is codified in 11 U.S.C. § 1171 (b). That section is contained in Subchapter IV of Chapter 11 and applies only to railroad reorganization cases; it is not applicable to other Chapter 11 cases even though the debtor may have been engaged in the transportation business.”
In re Jeans.com, Inc., 502 B.R. 250 (Bankr. D.P.R. 2013).
“The six-month rule was legislated in Section 77(b) *254 of the Bankruptcy Act of 1898 for railroad reorganization cases and survived through Section 1171(b) of the Bankruptcy Reform Act of 1978. See Act of July 1, 1898, ch.”
McCune v. Workmen's Comp. Appeal Bd., 571 A.2d 1118 (Pa. Commw. Ct. 1990).
“On March 18, 1987, the bankruptcy judge determined that, although MSW had not been decertified as a public utility, MSW was not a common carrier and therefore was not a “railroad” as defined by 11 U.S.C. § 101 (36).”
Keach v. New Brunswick S. Ry. Co. (Montreal, Maine & Atl. Ry., Ltd.), 558 B.R. 473 (1st Cir. BAP 2016).
· cites it 2× “67 was “secured by equitable liens against all property of [MMA] under the Six Month[s] Rule applicable in federal court receiverships, and [we]re entitled to priority pursuant to 11 U.S.C. § 1171 (b),” because such claims: (1) related to current operating expenses incurred by…”
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