In re: AMERICAN PAD & PAPER COMPANY v. FRANKLIN BOXBOARD CO. a/k/a Franklin Boxboard Company

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 05-1379
In re: AMERICAN PAD & PAPER COMPANY,
Debtor
STEVEN G. SINGER, Chapter 7 Trustee,
Appellant
v.
FRANKLIN BOXBOARD CO.
a/k/a Franklin Boxboard Company;
BENNINGTON PAPERBOARD COMPANY,
Divisions of the Newark Group Inc.
MARGARET HARRISON,
Trustee
(D.C. Civil No. 03-cv-01077)
No. 05-1380
In re: AMERICAN PAD & PAPER COMPANY,
Debtor
STEVEN G. SINGER, Chapter 7 Trustee,
Appellant
v.
KIMBERLY-CLARK CORPORATION
d/b/a/ Neenah Papers
MARGARET HARRISON,
Trustee

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2
(D.C. Civil No. 04-cv-00238)
No. 05-1381
In re: AMERICAN PAD & PAPER COMPANY,
Debtor
STEVEN G. SINGER, Chapter 7 Trustee,
Appellant
v.
FRONTIER COMMUNICATIONS OF AMERICA INC.;
FRONTIER COMMUNICATIONS OF FAIRMONT INC.;
FRONTIER COMMUNICATIONS OF GEORGIA INC.,
d/b/a Frontier Communications Service
MARGARET HARRISON,
Trustee
(D.C. Civil No. 03-cv-01127)
No. 05-1382
In re: AMERICAN PAD & PAPER COMPANY,
Debtor
STEVEN G. SINGER, Chapter 7 Trustee,
Appellant
v.
STRATEGIC PAPER GROUP, LLC
MARGARET HARRISON,
Trustee

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3
(D.C. Civil No. 03-cv-01130)
On Appeal from the United States District Court
for the District of Delaware
District Judge: Hon. Kent A. Jordan
Argued November 6, 2006
Before: SLOVITER, CHAGARES, and NYGAARD, Circuit
Judges
(Filed: March 2, 2007)
Adam Singer (Argued)
Cooch & Taylor
Wilmington, DE 19899-1680
Attorney for Appellant Steven G. Singer
Jeffrey M. Schlerf
The Bayard Firm
Wilmington, DE 19899
Bruce Buechler
Lowenstein Sandler
Roseland, NJ 07068
Attorneys for Appellees Franklin Boxboard Co. and
Bennington Paperboard Co.
Katherine M. Perhach
Quarles & Brady
Milwaukee, WI 53202
Attorney for Appellee Fox River Paper Co.
George M. Cheever
Kirkpatrick & Lockhart Preston Gates Ellis

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4
Pittsburgh, PA l5222
Attorney for Appellee W + D Machinery Co., Inc.
Joseph J. Bodnar
Monzack & Monaco
Wilmington, DE 19899
Attorney for Appellees W + D Machinery Co., Inc., and
Fibermark Inc.
John J. Schmidt
Dinsmore & Shohl
Cincinnati, OH 45202
Victoria W. Counihan
Dennis A. Meloro
Greenberg Traurig
Wilmington, DE 19801
Attorneys for Appellee JBM Envelope Co., Inc.
Christopher P. Simon
Cross & Simon
Wilmington, DE 19801
Attorney for Appellee Dwyer Associates, Inc.
Ashley B. Stitzer
The Bayard Firm
Wilmington, DE 19899
Attorney for Appellees Beautone Specialties and Crown
Roll Leaf Inc.
E. Franklin Childress, Jr.
Baker, Donelson, Bearman, & Caldwell
Memphis, TN 38103
Stephanie A. Fox
Maron, Marvel, Bradley & Anderson

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5
Wilmington, DE 19801
Attorneys for Appellees Champion International Corp.,
Nationwide Papers, International Paper Co., d/b/a Beckett
Papers, d/b/a XPEDX, d/b/a Strathmore Paper Co., d/b/a
Queen City Paper Co.
David M. Fournier
Pepper Hamilton
Wilmington, DE 19899-1709
Michael H. Traison
Donald J. Hutchinson (Argued)
Miller, Canfield, Paddock & Stone
Detroit, MI 48226
Attorneys for Appellees Georgia Pacific Corp, Great
Northern Nekoosa Corp., Unisource Worldwide, Fort
James Corp., d/b/a Fort James Communications Papers
Kathleen M. Miller
Smith, Katzenstein & Furlow
Wilmington, DE 19899
Attorney for Appellee Kimberly Clark Corp.
Lisa C. McLaughlin
Phillips, Goldman & Spence
Wilmington, DE 19806
Attorney for Appellees Frontier Communications,
Frontier Communications of America, Inc., Frontier
Communications GA, Inc., and Strategic Paper Group
Gilbert L. Hamberg
Yardley, PA l9067
Attorney for Appellees Frontier Communications,
Frontier Communications of America, Inc., and Frontier
Communications GA, Inc.

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6
David N. Crapo
Gibbons, Del Deo, Dolan, Griffinger & Vecchione
Newark, NJ 07102-5497
Attorney for Appellee Strategic Paper Group
OPINION OF THE COURT
SLOVITER, Circuit Judge.
Section 546(a) of the Bankruptcy Code sets a two-year
limit for the commencement of avoidance actions on behalf of
the bankruptcy estate to recover money or property transfers.
This provision was amended in 1994 to provide an additional
year for such actions running from the date of the appointment
or election of certain trustees, if such appointment or election
occurs before the expiration of the aforementioned two-year
period.
Appellant Steven G. Singer, the elected Chapter 7 Trustee
for the debtors in this proceeding, filed numerous actions to
avoid certain preferences that were made by the debtor. Those
actions were dismissed as untimely by the Bankruptcy Court and
affirmed by the District Court. He appeals, asking us to interpret
the statutory language regarding the statute of limitations so as to
make timely the avoidance actions he filed. As discussed below,
the language of the statute will not bear such an interpretation.
I.
On January 10, 2000, a number of creditors filed
involuntary Chapter 11 petitions in the Bankruptcy Court for the
District of Delaware against American Pad & Paper Company
and six related companies (the “debtors”), which had been in the
business of manufacturing and marketing a variety of paper and
stationery products. On January 14, 2000, each debtor filed a
voluntary Chapter 11 petition, as well as a request that the
Bankruptcy Court enter an order for relief upon the debtors’ joint
consent. That same day, the Bankruptcy Court entered the order
for relief, as well as an order directing the joint administration of
the cases. Almost two years later, on December 21, 2001, the

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1
Section 322, referenced in section 701, requires that a
person post bond in order to qualify as a trustee, “conditioned on
the faithful performance of . . . official duties.” Such bond must be
filed within five days after the trustee’s selection and before the
trustee begins his or her official duties.
7
Bankruptcy Court entered an order granting a motion made by
the creditors’ committee to convert the cases to Chapter 7. By
the terms of the order, the conversion to Chapter 7 was to be
effective on January 3, 2002.
Also on January 3, 2002, the United States Trustee
appointed Jeoffrey Burtch as interim Chapter 7 trustee pursuant
to section 701 of the Bankruptcy Code. That section provides:
Interim trustee
(a) (1) Promptly after the order for relief under this
chapter, the United States trustee shall appoint one
disinterested person that is a member of the panel of
private trustees established under section 586(a)(1) of title
28 or that is serving as trustee in the case immediately
before the order for relief under this chapter to serve as
interim trustee in the case.
(2) If none of the members of such panel is willing
to serve as interim trustee in the case, then the United
States trustee may serve as interim trustee in the case.
(b) The service of an interim trustee under this section
terminates when a trustee elected or designated under
section 702 of this title to serve as trustee in the case
qualifies under section 322 of this title.
(c) An interim trustee serving under this section is a
trustee in a case under this title.
11 U.S.C. § 701 (emphasis added). 1
It is significant for the issue before us that the date of the

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2
Section 702(b) provides that “[a]t the meeting of creditors
held under section 341 of this title, creditors may elect one person
to serve as trustee in the case if election of a trustee is requested by
creditors that may vote under subsection (a) of this section, and that
hold at least 20 percent in amount of the claims specified in
subsection (a)(1) of this section that are held by creditors that may
vote under subsection (a) of this section.” 11 U.S.C. § 702.
8
appointment of Burtch as the Chapter 7 trustee under section
701, January 14, 2002, was a mere eleven days prior to the two-
year anniversary of the entry of the order for relief. A notice
dated January 15, 2002 scheduled the meeting of creditors
pursuant to section 341 of the Code for February 13, 2002. See
11 U.S.C. § 341 (“Within a reasonable time after the order for
relief in a case under this title, the United States trustee shall
convene and preside at a meeting of creditors.”); 3 Collier on
Bankruptcy ¶ 341.01 (15th ed. rev. 2006) (“The chief function of
the meeting of creditors is to provide the machinery for creditors
to elect a trustee, examine the debtor and be heard generally in
an advisory capacity on questions concerning the administration
of the estate.”). It is also evident that the creditors’ meeting was
scheduled for a date more than two years after the entry of the
order for relief.
At the meeting, certain creditors requested the election of
a trustee pursuant to section 702 of the Code,2 and a new
individual, Steven Singer, the appellant in the instant case, was
so elected on that date, more than two years after the entry of the
order for relief.
It appears that trustees are infrequently elected under
section 702, “primarily because of the substantial creditor effort
needed to meet the statutory requirements for an election. [In
cases where] no election takes place, the interim trustee [will]
continue[ ] to serve as the trustee for the Chapter 7 case
[pursuant to section 702(d)].” George M. Treister et al.,
Fundamentals of Bankruptcy Law § 2.03(a)(3) (2d ed. 1988); 5
Collier on Bankruptcy ¶ 546.02 (2)(a)(i) (“Since trustee elections
under section 702 are rare, the date of the section 341 meeting
usually will be the date of appointment of the trustee for

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3
Appellant’s Brief gives September 8, 2002 as the
inception date for these actions, but the docket sheet provided in
the Appendix lists August 8, 2002 as the date that the first action
was filed. The difference is immaterial to the issue before us.
9
purposes of section 546(a)(1)(B).”). Thus, had Singer not been
elected the section 702 trustee at the section 341 meeting,
interim trustee Burtch would have continued to serve as trustee
by operation of section 702(d) of the Code, which provides that
“[i]f a trustee is not elected under this section, then the interim
trustee shall serve as trustee in the case.” See also 5 Collier on
Bankruptcy ¶ 546.02 (2)(a) (“The interim trustee, who is
appointed promptly [by the U.S. Trustee] after entry of the order
for relief under section 701, automatically becomes the
permanent trustee at the meeting of creditors pursuant to section
341 if creditors do not elect a trustee under section 702.”). We
note that notwithstanding the language in the excerpt from
Collier, the term “permanent trustee” does not appear in the
relevant sections of the Bankruptcy Code.
Between August and December 2002,3 trustee Singer
filed approximately 150 avoidance actions under section 547 of
the Code, which exists to prevent “debtors from depleting the
estate to pay favored creditors with assets that otherwise would
have been apportioned among creditors according to the
prioritization scheme of the Bankruptcy Code.” In re Pillowtex,
Inc., 304 F.3d 246, 252 (3d Cir. 2002). A number of defendants
in the adversary actions moved the Bankruptcy Court to dismiss
on the ground that they were filed beyond the applicable two-
year statute of limitations. The Bankruptcy Court granted the
motions to dismiss on October 28, 2003 and March 15, 2004.
Singer v. Franklin Boxboard Co. (In re American Pad & Paper
Co.), 303 B.R. 27 (Bankr. D. Del. 2003); Singer v. Kimberly-
Clark Corp. (In re American Pad & Paper Co.), 307 B.R. 459
(Bankr. D. Del. 2004). The District Court affirmed on January
10, 2005 in Singer v. Franklin Boxboard Co. (In re American
Pad & Paper), 319 B.R. 791 (D. Del. 2005), and thereafter in
three additional orders in January 2005, each pertaining to a
related case and affirming the Bankruptcy Court orders for same
reasons set forth in the January 10, 2005 opinion and order.

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10
Singer filed timely Notices of Appeal of these four orders.
This court consolidated the appeals by order entered February 8,
2005.
II.
The District Court had jurisdiction under 28 U.S.C. §
158(a) to hear appeals from the Bankruptcy Court’s orders. We
have jurisdiction under 28 U.S.C. § 158(d) and 28 U.S.C. § 1291
to hear this consolidated appeal from the District Court’s final
orders affirming the Bankruptcy Court’s judgment. “Exercising
the same standard of review as the [D]istrict [C]ourt, we review
the bankruptcy court’s legal determinations de novo, its factual
findings for clear error and its exercise of discretion for abuse
thereof.” Reconstituted Comm. of Unsecured Creditors of the
United Healthcare Sys., Inc., v. State of N.J. Dept. of Labor (In
re United Healthcare Sys., Inc.), 396 F.3d 247, 249 (3d Cir.
2005) (internal quotation marks and citations omitted). The
parties agree that the matter before us concerns an issue of law.
Moreover, it is an issue of first impression for this court.
III.
As revised by Congress in 1994, the statute of limitations
on avoiding powers appears at 11 U.S.C. § 546(a), and reads in
relevant part as follows:
Limitations on avoiding powers
(a) An action or proceeding under section . . . 547 . . . of
this title may not be commenced after . . .
(1) the later of –
(A) 2 years after the entry of the order for relief; or
(B) 1 year after the appointment or election of the
first trustee under section 702, 1104, 1163, 1202,
or 1302 of this title if such appointment or such
election occurs before the expiration of the period
specified in subparagraph (A)[.]

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11
The application of the above limitations period to our facts is
straightforward. Here, the order for relief was entered on
January 14, 2000. Thus, the initial two-year period expired on
January 14, 2002, before Singer filed the avoidance actions at
issue here. See, e.g., S. Technical Coll. v. Arkansas Television
Co. (In re S. Technical Coll., Inc.), 172 B.R. 253, 254 (Bankr.
E.D. Ark. 1994) (reading the time computation provision in Rule
9006(a) of the Federal Rules of Bankruptcy Procedure as making
timely a filing made on two-year anniversary date).
Singer did not bring the first of his actions until August of
2002, almost seven months past the two-year statutory period.
As we noted earlier, Singer’s election as trustee under section
702 did not take place until February 13, 2002, approximately a
month after “the expiration of the period specified in
subparagraph (A),” i.e., the expiration of the initial two-year
period. See 11 U.S.C. § 546(a)(1)(B). Thus, from a plain
reading of the statute of limitations, and as the Bankruptcy and
District Courts held, Singer’s avoidance actions are time-barred.
“When [a] statute’s language is plain, the sole function for the
courts – at least where the disposition required by the text is not
absurd – is to enforce it according to its terms.” Robert Wood
Johnson Univ. Hosp. v. Thompson, 297 F.3d 273, 284 (3d Cir.
2002) (internal quotation marks and citations omitted); In re
First Merchs. Acceptance Corp. v. J.C. Bradford & Co., 198
F.3d 394, 403 (3d Cir. 1999) (only absurd results and the most
extraordinary showing of contrary intentions justify a limitation
on the plain meaning of the statutory language); see also 5
Collier on Bankruptcy ¶ 546.02[2] (“If a trustee is appointed or
elected within two years of the entry of the order for relief, the
trustee is afforded one additional year from its appointment or
election to commence avoidance actions. If a trustee is not
appointed or elected prior to the expiration of the initial two-year
period, commencement of avoidance actions is time-barred, even
if a trustee is subsequently appointed or elected in the case.”)
(emphasis added).
IV.
Despite the fact that the statute of limitations plainly bars
appellant’s avoidance actions, appellant draws the court’s

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12
attention to the date the interim trustee, Burtch, was appointed:
January 3, 2002. Essentially, appellant argues that, because the
interim trustee under section 701 was appointed on January 3,
2002, prior to the expiration of the initial two-year period,
appellant as “permanent trustee” should have received an
additional one-year period to file the avoidance actions, running
from January 3, 2002. Yet, the plain language of the statute of
limitations does not include section 701 interim trustees, and
makes reference only to “1 year after the appointment or election
of the first trustee under section 702, 1104, 1163, 1202, or
1302[.]” The omission of section 701 from the list of sections is
evident.
Reading the appointment of an interim trustee under
section 701 as an event that triggers the additional one-year
period has no basis in the language of the statute. See Hartford
Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1,
6-7 (2000) (noting the general inappropriateness, as a matter of
statutory construction, of assuming that a catalogue of
empowered parties in a statute is nevertheless a nonexclusive
list, as where “a statute . . . names the parties granted [the] right
to invoke its provisions, . . . such parties only may act”) (internal
quotation marks and citation omitted); United States v.
Landmesser, 378 F.3d 308, 313 n.8 (3d Cir. 2004) (“The canon
of expressio unius est exclusio alterius means that explicit
mention of one thing in a statute implies a congressional intent
to exclude similar things that were not specifically mentioned.”)
(internal quotation marks and citation omitted); see also Turner
v. J.P. Bolduc et al. (In re Crowe Rope Indus., LLC), 311 B.R.
313, 314 (Bankr. D. Me. 2004) (concluding there is no need to
“invent[] a reference to § 701” in section 546(a)(1)(B), and
rejecting argument that the one-year period ran from the date of
the appointment of the interim trustee under section 701, instead
of from the date of the section 341 meeting at which the interim
trustee is appointed the trustee by operation of law pursuant to
702(d) if no trustee is elected); Styler v. Conoco, Inc. (In re
Peterson Distrib., Inc.), 176 B.R. 584, 591 (Bankr. D. Utah
1995) (“The Bankruptcy Reform Act of 1994 also clarifies that
the limitations period does not run from the appointment of an
interim trustee. There is no added reference to § 701.”).

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13
In support of his argument based upon the date of
Burtch’s section 701 appointment, appellant calls our attention
to a subsequently-overruled bankruptcy court decision that held
that the additional one-year period under section 546(a)(1)(B)
began to run upon the appointment of the interim trustee under
section 701. Burtch v. Georgia-Pacific Corp. (In re Allied
Digital Techs. Corp.), 300 B.R. 616 (Bankr. D. Del. 2003),
rev’d, 341 B.R. 171 (D. Del. 2006); see also Claybrook v.
Ponderosa Indus. de Mexico (In re U.S. Wood Prods., Inc.),
2004 WL 1877730, at *24 (Bankr. D. Del. Aug. 20, 2004)
(concluding, in a case where, unlike the instant case, no trustee
was elected that “[s]ince the Trustee was appointed within the
two years of the order for relief and became the permanent
trustee under section 702(d) when no trustee was elected, he is
entitled to the one-year extension of time to file avoidance
actions granted by section 546(a)(1)(B)” running from the date
of his appointment as interim trustee).
In Allied Digital, the bankruptcy court entered the order
for relief on October 25, 2000, and the first interim trustee was
appointed on July 10, 2002, with a successor interim trustee
appointed July 25, 2002. 300 B.R. at 618, 619. The section 341
meeting of creditors did not take place, however, until March 5,
2003, more than four months after the expiration of the initial
two-year period. Id. at 617. Despite the expiration of the two-
year period, the bankruptcy court held that avoidance actions
brought by the successor interim trustee on June 6, 2003 were
timely, and that a one-year window running from July 10, 2002
existed in which the interim trustee could bring avoidance
actions. Id. at 618. The bankruptcy court concluded that it
should read “section 701” into 546(a)(1)(B), as “there is no
practical difference between the powers of an interim trustee and
those of the permanent trustee.” Id. at 619. It relied on the
Ninth Circuit decision in Avalanche Maritime, Ltd. v. Parekh (In
re Parmetex, Inc.), 199 F.3d 1029 (9th Cir. 1999), that
interpreted the pre-1994 version of the statute of limitations to
conclude that the two-year period begins to run upon the
appointment of the interim trustee under section 701. In
Avalanche Maritime, the Ninth Circuit, noting the difficulty of
parsing “this unclear statute,” recognized that there was no
reference to section 701 in the pre-1994 version of the statute,

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4
Appellant relies on the aforementioned Claybrook v.
Ponderosa Indus. de Mexico (In re U.S. Wood Prods., Inc.), 2004
WL 1877730, as well as Bergquist v.Vista Dev., Inc. (In re Quality
Pontiac Buick GMC Truck, Inc.), 222 B.R. 865 (Bankr. D. Minn.
1998) and Burbach v. Providian Nat’l Bank (In re Burbach), 2001
WL 1891378 (Bankr. D.N.D. Oct. 5, 2001), but those cases
proceed on reasoning similar to that used by the bankruptcy court
in Allied Digital which was convincingly reversed by the district
court.
14
but it read section 701 into the list of authorizing statutes in
order to give effect to the references to “appointment” in the
statute and to reconcile its decision with earlier holdings in that
circuit regarding the pre-1994 version of the statute. Id. at 1033-
34.
Yet, as the district court in Allied Digital pointed out in
reversing the holding of the bankruptcy court, the similarities in
function between section 701 and section 702 trustees do not
warrant interposing “section 701” where it does not appear in the
statute. Allied Digital, 341 B.R. at 174 (holding that it was error
for the bankruptcy court to have presumed that Congress
intended to grant an additional one year to an interim trustee, and
to have read “section 701” into 546(a)(1)(B), because a court
must “begin with the text of [the] provision and, if its meaning is
clear, end there”) (internal quotation marks and citation omitted).
Moreover, even the Allied Digital bankruptcy court noted that it
was not passing on “whether a new one year period is barred if
the election occurs outside the initial two years but an interim
trustee was appointed within the two years.” Allied Digital, 300
B.R. 618 n.2.4 That, of course, is the issue in the matter before
us.
Surely, a conclusion that appellant’s avoidance actions
are timely, even though his “election” under section 702 plainly
occurred after “expiration of the [two-year] period specified in
subparagraph A,” presents even greater direct conflict with the
statutory language than the events at issue in Allied Digital.
As the Supreme Court stated in Bread Political Action

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5
The 1993 version of the statute read, in applicable part:
§ 546. Limitations on avoiding powers
(a) An action or proceeding under section . . . 547 .
. . of this title may not be commenced after the earlier of--
(1) two years after the appointment of a trustee under
section 702, 1104, 1163, 1302, or 1202 of this title; or
(2) the time the case is closed or dismissed.
15
Comm. v. FEC, 455 U.S. 577, 580 (1982), “[o]ur analysis of this
issue of statutory construction ‘must begin with the language of
the statute itself[.]’” (quoting Dawson Chem. Co. v. Rohm &
Haas Co., 488 U.S. 176, 187 (1980)). Where statutory language
is clear, “and admits of no more than one meaning the duty of
interpretation does not arise and the rules which are to aid
doubtful meanings need no discussion.” Abdul-Akbar v.
McKelvie, 239 F.3d 307, 313 (3d Cir. 2001) (en banc) (quoting
Caminetti v. United States, 242 U.S. 470, 485 (1917));
Lancashire Coal Co. v. Sec’y of Labor, Mine Safety and Health
Admin. (MSHA), 968 F.2d 388, 391 (3d Cir. 1992) (“[W]hen
the statutory language is clear a court need ordinarily look no
further[.]”). The Supreme Court has stated that “Congress says
in a statute what it means and means in a statute what it says
there.” Hartford Underwriters Ins. Co., 530 U.S. at 6 (internal
quotation marks and citation omitted).
Even if we were to assume arguendo that the statutory
language here contained some ambiguity that required a look
outside the text, which was the case with the pre-1994 statute,5
the context of the 1994 amendment makes clear that Congress
amended the statute in part to clarify the limitations period.
Previously, courts had differed on when the period began to run
in light of the ambiguous statutory language. Compare, e.g.,
Maurice Sporting Goods, Inc v. Maxway Corp. (In re Maxway
Corp.), 27 F.3d 980, 982, 983 (4th Cir. 1994) (finding that the
unamended version of the statute required that an avoidance
action be commenced “within two years after the appointment of
one of the specified trustees or prior to the close or dismissal of
the case, whichever occurs earlier,” and rejecting contention that

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16
“two-year statute of limitations in § 546(a)(1) begins to run
against a debtor in possession upon the filing of a Chapter 11
bankruptcy petition”) with Constr. Mgmt. Servs., Inc. v. Mfrs
Hanover Trust Co. (In re Coastal Group Inc.), 13 F.3d 81 (3d
Cir. 1994) (concluding that the debtor in possession was subject
to same limitations that apply to bankruptcy trustee, including
two-year statute of limitations, which begins to run from date of
Chapter 11 petition filing).
Confusion had also arisen over whether subsequent
appointment of new trustees granted the new appointees a fresh
two-year period in which to bring actions. See, e.g., Lindquist v.
FMB-First Michigan Bank (In re Dryland Marina, Inc.), 180
B.R. 487, 488 (Bankr. W.D. Mich. 1995) (“The parties dispute
the meaning of the phrase ‘appointment of a trustee’ under this
section of the Code. Plaintiff claims that the phrase means every
trustee, while defendant asserts that it only means the first
trustee.”); see also 5 Collier on Bankruptcy ¶ 546.LH.[1][a]
(“This [1994] amendment was intended to resolve conflicting
interpretations of former section 546(a)(1) related to the
applicability of its two-year limitations period to debtors in
possession, trustees appointed after a debtor was in possession,
and successor trustees.”).
The 1994 amendment not only added the provision for a
one-year addition in certain limited circumstances but it also
clarified the operative two-year period as running from the date
of entry of the order for relief, with the additional one-year
period as specified in the statute. In a floor statement following
the passage of the Act in the Senate, Senator Orrin G. Hatch
noted his understanding that the two-year period runs from the
filing of a Chapter 11 petition. He stated that “this amendment
has arisen from a perceived need to provide a period of time for
a later appointed bankruptcy estate representative to investigate
and institute actions.” 140 Cong. Rec. S28355, 28359 (Oct. 6,
1994). He continued, “[t]his amendment should prevent
prejudice against potential [defendants] that would result from
having to defend stale actions and should encourage estate
representative[s] to investigate and resolve actions earlier in a
bankruptcy case, thus minimizing estate expenses and
maximizing the value of the estate to all creditors.” Id.

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6
In support of his argument that a statute of limitations is
only constitutional if it gives a party a “reasonable time to
commence the actions before the bar takes effect,” Br. at 17,
appellant appears to quote from a line of case law that addresses
the constitutionality of newly-created limitation periods as applied
against existing claims. See, e.g., Block v. North Dakota ex rel.
Board of Univ. & Sch. Lands, 461 U.S. 273, 286 n.23 (1983)
(quoting Texaco, Inc. v. Short, 454 U.S. 516, 527 n.21 (1982)
(internal quotation marks and citations omitted)); Ross v. Artuz,
150 F.3d 97, 100 (2d Cir. 1998) (“Because the Constitution
17
Notwithstanding the amendment and the renewed focus
on the statute of limitations and section 546 that it engendered,
section 701 remained unenumerated in section 546. Where
Congress has wished to include interim trustees appointed under
section 701 in a provision in the Code, it has explicitly done so.
See 11 U.S.C. § 507(a)(1)(C) (introduced by the Bankruptcy
Abuse Prevention and Consumer Protection Act of 2005 to
provide that, where a “trustee is appointed or elected under
section 701, 702, 703, 1104, 1202, or 1302,” the administrative
expenses of the trustee shall be paid before payment of claims
that benefit domestic support claims “under subparagraphs (A)
and (B), to the extent that the trustee administers assets that are
otherwise available for the payment of such claims”) (emphasis
added); see also In re Parmetex, Inc., 199 F.3d at 1037 n.5
(McKeown, J., dissenting in part) (noting that “when Congress
amended § 546(a) in 1994, it added the phrase ‘or election of the
first trustee’ after the term ‘appointment,’ and maintained the
express reference to § 702, while declining to add a reference to
the interim trustee under § 701. These amendments indicate that
Congress intended that the statute of limitations begin running
upon designation of the § 702 trustee.”) (internal citation
omitted).
Finally, appellant has raised an argument that he frames
as both an assertion that the statute as written produces absurd
results and as a problem of due process. He asserts that the
statute of limitations provides no notice as to when avoidance
actions must be commenced, nor a reasonable period of time in
which to bring such actions.6 Of course, the plain language of

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prohibits governments from depriving any person of life, liberty,
or property, without due process of law ; all statutes of limitation
must proceed on the idea that the party has full opportunity
afforded him to try his right in the courts[.] It is thus
impermissible for a newly enacted or shortened statute of
limitations to extinguish existing claims immediately upon the
statute’s enactment.”) (internal citation omitted). Such an issue is
of course not before us here.
7
Its motion stated: “The only assets remaining in the
Debtors’ estates that are not encumbered by the security interests
and liens of the Debtors’s secured lenders are certain potential
avoidance actions and other litigation recoveries. Section 546(a)
of the Bankruptcy Code limits the period in which such avoidance
actions may be commenced to two years after the entry of the order
for relief. If a trustee is appointed or elected under section 702
before the expiration of the two-year limitations period, section
546(a) extends such period by one year.
The Committee believes that it is in the best interest of all
creditors for the Debtors’ cases to be converted to Chapter 7 . . . to
exploit the extension afforded by section 546(a).” App. at 347
(emphasis added).
18
the statute provides the required notice as to which events will
trigger the additional year period. Indeed, the committee of
unsecured creditors noted as much in its November 21, 2001
motion papers arguing for a conversion of the case to Chapter 7.7
The statute puts all parties in interest on notice that the time for
filing of avoidance actions will expire in two years, with the
possibility of an additional one year if a trustee is appointed or
elected under sections 702, 1104, 1163, 1202, or 1302 before the
two years expire. See Island Insteel Sys., Inc. v. Waters, 296
F.3d 200, 215-16 (3d Cir. 2002) (“Statutes of limitations are
primarily designed to assure fairness to defendants. . . . The
theory is that even if one has a just claim it is unjust not to put
the adversary on notice to defend within the period of limitation
and that the right to be free of stale claims in time comes to
prevail over the right to prosecute them.”) (internal quotation
marks and citations omitted).

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19
We do not gainsay that appellant had no time to
investigate and prosecute any avoidance actions. However,
other parties in interest could arguably have brought avoidance
actions before the running of the two-year period from the entry
of the order of relief. See Official Comm. of Unsecured
Creditors of Cybergenics Corp. ex rel. Cybergenics Corp. v.
Chinery, 330 F.3d 548, 580 (3d Cir. 2003) (en banc) (in Chapter
11, bankruptcy court may grant derivative standing to a creditor
or creditors’ committee to pursue avoidance claims); 5 Collier on
Bankruptcy ¶ 547.11[2][c][i] (“In its capacity as a debtor in
possession, a chapter 11 debtor may seek to avoid and recover
preferential transfers.”); see also Bd. of Trs. of Teamsters Local
863 Pension Fund v. Foodtown, Inc., 296 F.3d 164, 169 (3d Cir.
2002) (causes of action are property of the estate).
The fact that appellant’s claims, as the section 702
trustee, were already time-barred at the moment of his election in
February 2002 does not make the application of the statute as
written absurd. “[W]e do not sit to assess the relative merits of
different approaches to various bankruptcy problems. It suffices
that the natural reading of the text produces the result we
announce. Achieving a better policy outcome – if what
[appellant] urges is that – is a task for Congress, not the courts.”
Hartford Underwriters Ins. Co., 530 U.S. at 13-14.
V.
In conclusion, we hold that section 546(a)(1)(B) of the
Bankruptcy Code is amenable to a “plain language” analysis,
and we decline to read section 701 into the specific statutory
provisions delineated therein. Accordingly, we will affirm the
District Court’s orders.
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