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Section 503 Allowance of administrative claims (Judge Gargotta)

In re UTEX Communications Corp. (September 21, 2011)
Issue: Did services provided under the existing agreement between Creditor and Debtor qualify as an administrative expense under § 503(b)?
Holding: Because the claim arose from a transaction with the debtor-in-possession and the services enhanced the ability to run the debtor-in-possession’s business, Creditor had a prima facie case for an administrative expense under §503(b)(1).
Issue: Do Debtor’s set-off claims negate Creditor’s administrative expense claim?
Holding: Debtor’s offset claims do not negate the administrative expense claim. Under Bankruptcy Rule 7001, an objection to a claim is not the proper place to raise a claim for set-off. Instead, these claims can be included in an adversary proceeding under Bankruptcy Rule 3007(b).
Issue:If Creditor is entitled to an administrative claim for payment of post-petition services, must it be paid immediately?
Holding:The Court has discretion on the timing of payment and it does not need to be immediate, but it must be paid by the plan’s effective date.