The court denied a pharmaceutical supplier's administrative expense claim based on alleged reclamation rights, finding that the supplier did not have a valid reclamation claim under § 546(c) or the right to exercise the equitable doctrine of asset marshaling.
The debtor and the supplier had entered into a stipulation concerning the supplier's right to assert its reclamation claim, but the agreed-upon conditions for pursuing that claim were not met. The terms of the stipulation required the supplier to establish that it had both an enforceable reclamation claim and enforceable marshaling rights as of the petition date. The court found the supplier's reclamation rights under § 546(c) were valueless and unenforceable because prior secured claims existed that exceeded the value of the pharmaceutical goods. The court also ruled that the supplier did not have the ability to use marshaling as a remedy because that would have required delaying the sale of the debtor's pharmacy assets in order to see if the lenders would have been paid in full from other assets. Such a tactic would have substantially reduced the sale price of the assets and resulted in an inequitable remedy for other creditors.
Finally, the court held that the supplier could not establish its claim outside the terms of the stipulation under § 507(b) (the supplier did not hold a secured claim that was inadequately protected), § 546(c) (there were no proceeds to which the supplier's claim could attach, so its right had no value), or § 503(b)(1)(A) (the supplier had no post-petition transaction with the debtor, and the supplier's valueless reclamation claims did "not morph into valuable post-petition administrative expense priority claims simply because the goods were sold").