United States Pipe and Foundry Company LLC v. Michael H. Holland

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[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 20-13832
____________________
In Re: UNITED STATES PIPE & FOUNDRY CO.,
Debtor.
___________________________________________________
UNITED STATES PIPE AND FOUNDRY COMPANY, LLC,
JW ALUMINUM COMPANY,
JW WINDOW COMPONENTS LLC,
Plaintiffs-Appellants,
versus
MICHAEL H. HOLLAND,
as Trustee of the United Mine Workers of America
1992 Benefit Plan,
MICHAEL MCKOWN,
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2 Opinion of the Court 20-13832
as Trustee of the United Mine Workers of America
1992 Benefit Plan,
JOSEPH R. RESCHINI,
as Trustee of the United Mine Workers of America
1992 Benefit Plan,
CARLO TARLEY,
as Trustee of the United Mine Workers of America
1992 Benefit Plan,
MICHAEL H. HOLLAND,
as Trustee of the United Mine Workers of America
Combined Benefit Fund, et al.,
Defendants-Appellees.
____________________
Appeal from the United States District Court
for the Middle District of Florida
D.C. Docket No. 8:19-cv-00891-CEH
____________________
Before WILLIAM PRYOR, Chief Judge, GRANT, and ANDERSON, Cir-
cuit Judges.
WILLIAM PRYOR, Chief Judge:
This appeal requires us to decide whether a bankruptcy plan
of reorganization confirmed in 1995 discharged the obligation of
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20-13832 Opinion of the Court 3
three debtor companies to provide future health-care benefits to
retired employees of a coal company that was once part of the same
corporate family. In 2016, after the coal company’s future obliga-
tions to the retirees were discharged, the trustees of two health-
care benefit funds sued to compel the related companies to pay for
the benefits. The bankruptcy court and district court ruled that the
1995 plan of reorganization did not discharge the claims for future
benefits. We disagree. The Bankruptcy Code defines a “claim” as a
“right to payment, whether or not such right is . . . unliquidated,”
“contingent,” “unmatured,” or “equitable,” and as a “right to an
equitable remedy for breach of performance if such breach gives
rise to a right to payment.” 11 U.S.C. § 101(5). And with exceptions
not relevant here, a plan of reorganization discharges a debtor from
all claims “that arose before” the “order confirming the plan” un-
less the plan itself excludes those claims. Id. § 1141(d)(1), (1)(A). Be-
cause the companies’ obligations to provide health-care benefits
were fixed before the bankruptcy court confirmed the plan of reor-
ganization, the Trustees’ claims for future retiree benefits were dis-
charged in 1995. So, we reverse and remand for further proceed-
ings.
I. BACKGROUND
Several decades ago, the coal industry signed a series of
wage agreements ensuring that retired employees and their imme-
diate families would receive health benefits for the rest of their
lives. United Mine Works of Am. Combined Benefit Fund v. Toffel
(In re Walter Energy, Inc.), 911 F.3d 1121, 1127–28 (11th Cir. 2018).
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4 Opinion of the Court 20-13832
Industry conditions then changed and threatened the coal indus-
try’s continued viability. Coal companies that failed or chose not to
renew their wage agreements stopped contributing to the funds
even though their workers continued to receive benefits as “or-
phaned retirees.” Id. at 1128. As a result, the retiree funds “were on
the brink of insolvency,” and worker strikes followed. Id. at 1129.
In response to the threatened vitality of the funds, Congress con-
verted the “contractual obligation to provide health care benefits
. . . into a statutory requirement” by enacting the Coal Industry Re-
tiree Health Benefit Act of 1992. Pub. L. No. 102-486, 106 Stat. 3036;
See In re Walter Energy, 911 F.3d at 1130.
The Coal Act sought to ensure the longevity of the retiree
funds through two primary means. First, it required companies to
continue to provide benefits. See 26 U.S.C. §§ 9704(a), 9711(a),
9712(d)(1), (3). Second, it made all “related person[s]”—which is
defined broadly to include a company under common control of a
specified coal company and a company that is “member of [a] con-
trolled group of corporations” that includes a specified coal com-
pany—jointly and severally liable for all required payments under
the Coal Act. See id. §§ 9701(c)(2)(A), 9704(a), 9711(c)(1),
9712(d)(4). These provisions addressed the problems caused by
coal companies that stopped paying for benefits when they chose
not to renew their wage agreements or went out of business.
Whether an entity is a related person under the Coal Act was
fixed on July 20, 1992. That is, entities that were related persons in
1992 but are no longer related persons are still related persons, and
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20-13832 Opinion of the Court 5
entities that are now related to a coal company, but were not in
1992, are not. Id. § 9701(c)(2)(B). On July 20, 1992, the companies
in this appeal were owned by a common parent company, now
known as Walter Energy, Inc., that also owned a coal company,
Jim Walter Resources, Inc., so the companies are “related persons”
under the Coal Act. See id. § 9701(c)(2)(A)(i)–(ii), (c)(2)(B).
The Coal Act imposes three kinds of obligations on covered
entities. First, covered entities must pay premiums to the Com-
bined Benefit Fund, id. § 9704(a), which was formed from the funds
established by earlier wage agreements, id. § 9702(a)(2); In re Wal-
ter Energy, 911 F.3d at 1127 & n.3. The Combined Fund provides
benefits to workers who were “eligible to receive, and [were] re-
ceiving, benefits from” industry funds on July 20, 1992. 26 U.S.C.
§ 9703(a), (f ). The covered entities pay an annual premium that is
calculated by the Commissioner of Social Security and is based on
the number of beneficiaries assigned to the coal company and the
Combined Fund’s estimated costs. Id. § 9704(a), (b)–(d). When a
covered coal company and all related persons are no longer in busi-
ness, the premium amount becomes zero. See id. § 9704(b)(2), (c)–
(d), (f )(1), (f )(2)(B). An entity remains in business so long as it “con-
ducts . . . any business activity” or “derives revenue from any busi-
ness activity, whether or not in the coal industry.” Id. § 9701(c)(7).
Second, the Coal Act requires signatories of the 1978 wage agree-
ment and later agreements to continue providing health-care ben-
efits to workers, as the signatories were doing through individual
employer plans under the wage agreements. Id. § 9711(a)–(b).
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6 Opinion of the Court 20-13832
Benefits are provided directly to the retired coal miners, and the
obligation lasts “for as long as the [specified coal company] (and
any related person) remains in business.” Id. § 9711(a). Finally,
some covered entities must pay premiums to the 1992 United Min-
eworkers of America Benefit Plan. Id. § 9712(d)(1).
The 1992 Plan is a benefit fund which was established by the
Coal Act. Id. § 9712(a)(1). As relevant here, the 1992 Plan provides
benefits to miners who are owed, but are not receiving, benefits
under section 9711. Id. § 9712(b)(2)(B). Covered entities that fail to
provide health-care benefits to their assigned retirees under section
9711 are required to pay monthly premiums to the 1992 Plan. Id.
§ 9712(d).
In 1989, the Jim Walter companies, their parent company,
and its other subsidiaries filed petitions for bankruptcy, which were
administratively consolidated. In 1995, the bankruptcy court con-
firmed a consensual plan of reorganization. The Trustees did not
file a proof of claim for future Coal Act obligations and did not ob-
ject to the plan. The Trustees did file a proof of claim in the indi-
vidual bankruptcy proceeding of Jim Walter Resources. That proof
of claim included past-due payments owed under the wage agree-
ments and argued that Coal Act premiums that came due during
the pendency of the bankruptcy proceedings were entitled to ad-
ministrative priority.
The plan of reorganization discharged all “[c]laims” against
the companies that “arose at any time before the [e]ffective [d]ate”
unless those claims were included in the plan. Walter Energy
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20-13832 Opinion of the Court 7
expressly assumed the obligations to fund retiree health benefits,
and the order approving the plan “authorized and directed” Walter
Energy “to fund retiree health benefits.” Several years after the
bankruptcy court confirmed the plan, the companies disassociated
themselves from Walter Energy and the coal industry.
In 2015, Walter Energy again filed a petition for bankruptcy.
See Voluntary Petition, In re Walter Energy, Inc., No. 15-02741-
TOM11 (Bankr. N.D. Ala. Jul. 15, 2015) (ECF No. 1). “The bank-
ruptcy court entered an order . . . terminating [Walter Energy’s]
obligations to provide retirees [benefits under section 9711] as well
as to pay premiums to the Funds.” In re Walter Energy, 911 F.3d
at 1134. Walter Energy stopped providing benefits and paying pre-
miums under the Coal Act in April 2016.
In July 2016, the Trustees gave notice to the related compa-
nies that the Trustees considered them to be liable for Coal Act
obligations. Specifically, the Trustees considered the companies to
be liable to pay premiums to the Common Fund and 1992 Plan for
the period when Walter Energy was not providing benefits directly
to its retirees and to provide benefits directly to retirees through an
individual employer plan. The companies refused to pay the pre-
miums or provide the benefits.
The Trustees then sued the companies in the district court
for the District of Columbia and sought a declaratory judgment
that the companies were liable under the Coal Act, a money judg-
ment for the full amount of past-due premiums, and equitable re-
lief in the form of an injunction ordering the companies to pay
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8 Opinion of the Court 20-13832
premiums and establish and maintain an individual employer plan.
See Amended Complaint, Holland v. U.S. Pipe & Foundry Co., No.
1:16-cv-1577 (D.D.C. Mar. 27, 2017) (ECF No. 22). The companies
responded by filing complaints in their original consolidated bank-
ruptcy proceeding. The companies asserted that the Trustees’ Coal
Act claims against the companies were discharged in 1995 and that
the Trustees were barred by the plan of reorganization from at-
tempting to enforce those claims. The Trustees moved to dismiss
the complaints, and one of the companies, United States Pipe and
Foundry Company, LLC, moved for partial summary judgment.
The bankruptcy court treated the Trustees’ motion as a mo-
tion for summary judgment and granted it, and the bankruptcy
court denied U.S. Pipe’s motion. It reasoned that the premiums
must be either a “contingent claim or a tax.” If the premiums were
a contingent claim in 1995, it would have been discharged in the
1995 bankruptcy because under the Bankruptcy Code a “claim” in-
cludes any “right to payment” even if the right is “contingent.” See
11 U.S.C. § 101(5)(A). Alternatively, the bankruptcy court reasoned
that if the premiums were a tax, then claims for those premiums
would have arisen only when the premiums were assessed, and so
they would not have been discharged.
To determine whether Coal Act premiums were taxes, the
bankruptcy court applied the test from County Sanitation District
No. 2 of Los Angeles County v. Lorber Industries of California, Inc.
(In re Lorber ), 675 F.2d 1062 (9th Cir. 1982). It explained that
“[u]nder the Lorber test, [payments] are a tax if they are (1)
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20-13832 Opinion of the Court 9
regardless of their name, an involuntary pecuniary burden laid on
individuals or property (2) imposed by or under authority of the
legislature (3) for a public purpose (including defraying govern-
mental expenses) (4) under the state’s police or taxing power.” The
bankruptcy court concluded that the premiums owed under the
Coal Act were “unquestionably a tax.” It did not address the Trus-
tees’ alleged right to compel the companies to provide health-care
benefits directly to retirees under section 9711.
The district court affirmed. It agreed with the Trustees and
the bankruptcy court that because Coal Act premiums are taxes,
claims for those premiums arose only when the premiums were
assessed. The district court also addressed the Trustees’ claim un-
der section 9711 and concluded that only debts can be discharged
in bankruptcy, and not “obligations giving rise to [] debts” like the
requirement to provide benefits. (Emphasis omitted.)
II. STANDARD OF REVIEW
“We review de novo conclusions of law whether by the
bankruptcy court or the district court.” In re Walter Energy, 911
F.3d at 1135.
III. DISCUSSION
The parties dispute whether the companies’ Coal Act obli-
gations were discharged by the 1995 order confirming the compa-
nies’ plan of reorganization. The parties agree that the Trustees’
asserted rights to the payment of Combined Fund and 1992 Plan
premiums are “claims” under the Bankruptcy Code. But the
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10 Opinion of the Court 20-13832
Trustees assert that those “claims” arose only when the premiums
were assessed to the companies. So, they argue, those claims did
not exist in 1995 and could not have been discharged by the con-
sensual plan. The Trustees also argue that their alleged right to
compel the companies to provide benefits to retirees under section
9711 of the Coal Act is not a claim because it is a right to an equita-
ble remedy that does not fall within the Bankruptcy Code’s defini-
tion of “claim.” The Trustees conclude that because the compa-
nies’ Coal Act obligations were not discharged, the Trustees can
enforce those obligations. We disagree.
Under the Bankruptcy Code, the term “claim” is defined
broadly to include two overlapping kinds of rights. Section
101(5)(A) defines a “claim” to include all “right[s] to payment,
whether or not such right[s] [are] . . . liquidated, unliquidated,
fixed, contingent, matured, unmatured, . . . legal, [or] equitable.”
11 U.S.C. § 101(5)(A). Section 101(5)(B) addresses equitable reme-
dies and includes all “right[s] to an equitable remedy for breach of
performance if such breach gives rise to a right to payment.” Id.§ 101(5)(B). Based on this statutory text, the Supreme Court has ex-
plained that “Congress intended” to enact “the broadest available
definition of ‘claim,’” see Johnson v. Home State Bank, 501 U.S. 78,
83 (1991), to give debtors a “fresh start,” Owaski v. Jet Fla. Sys., Inc.
(In re Jet Fla. Sys., Inc.), 883 F.2d 970, 972 (11th Cir. 1989) (internal
quotation marks omitted). See ANTONIN SCALIA & BRYAN A.
GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS § 2,
at 56 (2012) (“[P]urpose must be derived from the text . . . .”). “It is
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as if the bankruptcy process creates two separate firms—the pre-
bankruptcy firm that pays off old claims against pre-bankruptcy as-
sets, and the post-bankruptcy firm that acts as a brand new ven-
ture.” Bos. & Me. Corp. v. Chi. Pac. Corp., 785 F.2d 562, 565 (7th
Cir. 1986).
We divide our discussion in two parts. First, we explain why
the Trustees’ claims for premiums to the Combined Fund were dis-
charged in 1995. Second, we explain why the Trustees’ claims un-
der section 9711 and for premiums to the 1992 Plan were dis-
charged in 1995.
A. The Trustees’ Claims for Combined Fund Premiums Existed
and Were Discharged in 1995.
A claim exists and is dischargeable whenever a debtor’s lia-
bility on that claim arises from its past conduct and “there is a rela-
tionship established . . . between an identifiable claimant” and that
past conduct. See Epstein v. Off. Comm. of Unsecured Creditors of
Est. of Piper Aircraft Corp. (In re Piper Aircraft, Corp.), 58 F.3d
1573, 1577 (11th Cir. 1995); 11 U.S.C. § 101(12). Requiring a preex-
isting relationship ensures that creditors have adequate notice that
their rights are at stake to satisfy due process. See Mullane v. Cent.
Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950) (explaining that
adequate “notice” is “[a]n elementary and fundamental require-
ment of due process”); see also Jeld-Wen, Inc. v. Van Brunt (In re
Grossman’s Inc.), 607 F.3d 114, 123–26 (3d Cir. 2010); Saint Cathe-
rine Hosp. of Ind., LLC v. Ind. Fam. & Soc. Servs. Admin., 800 F.3d
312, 315–16 (7th Cir. 2015). So, any liability on a claim based on the
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12 Opinion of the Court 20-13832
debtor’s conduct that occurred before the effective date of its plan
of reorganization is dischargeable so long as there is a relationship
between the debtor and creditor before that date. See First Nat’l
Bank of Oneida, N.A. v. Brandt, 887 F.3d 1255, 1260 (11th Cir.
2018); 11 U.S.C. § 1141(d)(1), (1)(A); Douglas G. Baird & Thomas
H. Jackson, Kovacs and Toxic Wastes in Bankruptcy, 36 STAN. L.
REV. 1199, 1200 (1984) (explaining that when an “obligation . . .
arises out of [the debtor’s] past conduct,” the obligation is dis-
chargeable).
The Trustees held “claims” for future Combined Fund pre-
miums in 1995 because their right to payment was based on the
companies’ pre-confirmation conduct. In 1995, the companies’ lia-
bility to the retirees had already been fixed; only the amount owed
was uncertain. On July 20, 1992, the companies became “related
person[s]” because they were related to a signatory of the relevant
coal industry wage agreements. See 26 U.S.C. §§ 9701(c)(2),
9704(a), 9706(a). This status as related persons made the companies
jointly and severally liable for Combined Fund premiums. See id.§ 9704(a). And the companies could do nothing outside of bank-
ruptcy to avoid or diminish this liability. See United Mine Workers
of Am. 1992 Benefit Plan v. Leckie Smokeless Coal Co. (In re Leckie
Smokeless Coal Co.), 99 F.3d 573, 581 n.9 (4th Cir. 1996) (explain-
ing that Coal Act liability is “fixed” because a covered entity “re-
mains liable” for Coal Act obligations “even if it chooses to cease
coal mining operations and to take up an entirely different
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20-13832 Opinion of the Court 13
enterprise”). So, the Trustees held a “claim” in 1995 because they
had a “fixed” “right to payment.” See 11 U.S.C. § 101(5)(A).
To be sure, the amount of the Trustees’ right was uncertain,
and the Trustees could not maintain a suit against the companies,
but neither fact is relevant to our inquiry. Those facts render the
Trustees’ right merely “unliquidated,” see 11 U.S.C. § 101(5)(A),
because the amount owed was not “fixed, . . . agreed upon, or . . .
capable of ascertainment,” Liquidated Claim, BLACK’S LAW
DICTIONARY (5th ed. 1979); see also Liquidated Debt, id. (“A debt is
liquidated when it is certain what is due and how much is due.”),
and “unmatured,” see 11 U.S.C. § 101(5)(A), because it was not
“unconditionally due and owing,” see Matured Claim, BLACK’S
LAW DICTIONARY, supra. And a “claim”—as the term is defined by
the Bankruptcy Code—includes rights that are both “unliquidated”
and “unmatured.” See 11 U.S.C. § 101(5)(A). So, neither the uncer-
tain amount of the Trustees’ right to payment nor its enforceability
alter the conclusion that the Trustees’ claim existed in 1995.
The Trustees also had a sufficient pre-confirmation “rela-
tionship” with the companies to be “aware of ” their own rights.
See United States v. LTV Corp. (In re Chateaugay I ), 944 F.2d 997,
1005 (2d Cir. 1991). The Coal Act was enacted nearly three years
before the effective date of the plan of reorganization, see Coal In-
dustry Retiree Health Benefit Act of 1992 (enacted October 24,
1992), and the companies’ joint and several liability to pay premi-
ums began nearly two-and-a-half years before that date, see 26
U.S.C. § 9704(a), (b)(2) (providing that Combined Fund premiums
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14 Opinion of the Court 20-13832
begin to come due on February 1, 1993). Indeed, the Trustees knew
about the companies’ liability because the Trustees filed a proof of
claim in Jim Walter Resources’ original bankruptcy proceedings.
Some confusion might arise from comparing the Coal Act to
generally applicable laws. Some laws—such as environmental
laws—impose penalties on all entities that violate them. Other
laws—such as state unemployment tax laws or antidiscrimination
laws—impose obligations on any entity that engages in specified
conduct. These laws continue to impose obligations on a debtor
after bankruptcy proceedings because the basis of an entity’s liabil-
ity is not pre-confirmation conduct; the obligations arise regardless
of bankruptcy status. Cf. Ohio v. Kovacs, 469 U.S. 274, 285 (1985)
(explaining that reorganized entities must comply with general
laws); Mich. Emp. Sec. Comm’n v. Wolverine Radio Co. (In re
Wolverine Radio Co.), 930 F.2d 1132, 1149 (6th Cir. 1991) (conclud-
ing that post-discharge “unemployment tax liability” is not dis-
chargeable because it “arises only by virtue of . . . post-petition em-
ployment of workers”); O’Loghlin v. County of Orange, 229 F.3d
871, 874–75 (9th Cir. 2000) (holding that, where an employer was a
covered entity under the Americans with Disabilities Act after
bankruptcy, a “claim that the [employer] violated the [Disabilities
Act] after” confirmation was not discharged by the confirmation
order).
By contrast, an entity’s liability under the Coal Act to pay
premiums to the Combined Fund turns solely on the companies’
pre-confirmation conduct. See 26 U.S.C. §§ 9701(c)(2), 9704(a). The
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Coal Act imposed liability on the companies on July 20, 1992, be-
cause they were related persons to an entity that had signed certain
coal-industry wage agreements. And a plurality of the Supreme
Court concluded that the Coal Act is unconstitutional in its appli-
cation to an entity that did not execute the relevant wage agree-
ments. See E. Enters. v. Apfel, 524 U.S. 498, 537 (1998) (plurality
opinion). So, we cannot say that the companies’ liability is based
on their post-confirmation conduct.
The Trustees argue that they had no right to payment in
1995 because the companies’ “liability [was] triggered” only by
their post-confirmation conduct. They maintain that, because the
premium amount becomes zero if the companies and all other re-
lated persons stop conducting or deriving revenue from any busi-
ness activity, liability is contingent on the companies’ post-confir-
mation conduct. But the Trustees are mistaken.
The Trustees erroneously assume that in 1995 the compa-
nies’ liability was “conditioned upon the occurrence of some future
event which is itself uncertain, or questionable.” See Contingent,
BLACK’S LAW DICTIONARY, supra. As we have explained, the com-
panies’ liability to pay premiums to the Combined Fund became
fixed before 1995 even though the amount due each year was con-
tingent and even though that amount might be zero. See 11 U.S.C.
§ 101(5)(A) (defining a “claim” as any “right to payment, whether
or not such right is . . . fixed . . . [or] contingent” (emphasis added));
In re Leckie, 99 F.3d at 581 n.9. Covered entities remain liable un-
der the Coal Act even when the premium assessed in a given year
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16 Opinion of the Court 20-13832
is zero. So, the Trustees’ claims existed and were discharged in
1995.
The Trustees suggest that the companies’ joint and several
liability with Walter Energy should affect our analysis, but we dis-
agree. We have explained that “confirmation of a debtor’s . . . plan
[of reorganization] does not discharge the obligations of a third-
party guarantor” because the debtor is discharged from the debt.
See Shure v. Vermont (In re Sure-Snap Corp.), 983 F.2d 1015, 1019
(11th Cir. 1993) (citing 11 U.S.C. § 524(e)). So, the Trustees’ claims
against the companies can be discharged even if the Trustees’
claims against Walter Energy were not. And although the Trustees
did not seek payment from the companies until 2016, “the fact that”
the Trustees could not maintain a suit against the companies until
Walter Energy stopped paying premiums “does not alter the con-
clusion” that the Trustees held a claim in 1995 that was discharged
in bankruptcy. See Stewart Foods, Inc. v. Broecker (In re Stewart
Foods, Inc.), 64 F.3d 141, 146 (4th Cir. 1995); Midland Funding,
LLC v. Johnson, 137 S. Ct. 1407, 1412 (2017).
In support of their argument, the Trustees point to our sister
circuit’s decision in LTV Steel Co. v. Shalala (In re Chateaugay II ),
53 F.3d 478 (2d Cir. 1995), but that decision is unpersuasive. There,
the Second Circuit held that “Coal Act liability” for post-confirma-
tion premiums “was not dischargeable in bankruptcy.” Id. at 498.
But our sister circuit failed to provide any rationale for its holding.
The Trustees posit that the holding of the Second Circuit
turned on an unrelated conclusion that Coal Act premiums are
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20-13832 Opinion of the Court 17
“taxes” that “accru[e]” when they are assessed and become due, id.(internal quotation marks omitted); see also United Mine Workers
of Am. 1992 Benefit Plan v. Rushton (In re Sunnyside Coal Co.),
146 F.3d 1273, 1278 (10th Cir. 1998), but even so we are unper-
suaded by that rationale for two reasons. First, a “‘claim’”—a term
defined broadly in the bankruptcy context—“include[s] a cause of
action or right to payment that has not yet accrued or become cog-
nizable.” 2 COLLIER ON BANKRUPTCY ¶ 101.05[1] (16th ed. 2022); see
also 11 U.S.C. § 101(5)(A); Midland Funding, 137 S. Ct. at 1412 (ex-
plaining that because “[t]he word ‘enforceable’ does not appear in
the [Bankruptcy] Code’s definition of ‘claim,’” an “unenforceable
claim is nonetheless a ‘right to payment,’ hence a ‘claim,’ as the
[Bankruptcy] Code uses those terms”). Second, nothing in this ap-
peal turns on whether the premiums are taxes. To be sure, many
taxes arise periodically, and “claims,” in the bankruptcy sense, for
future taxes ordinarily do not exist before the debtor engages in the
taxable conduct. But even if Coal Act obligations could be consid-
ered taxes, the companies’ liability would turn solely on their pre-
confirmation conduct. See In re Chateaugay II, 53 F.3d at 494(“[T]he Coal Act . . . apportions future financial responsibility ac-
cording to past participation” in the pre-Coal Act health-care sys-
tem.). So, whether Coal Act premiums can be considered “taxes”—
as In re Chateaugay II held—has no bearing on when claims for
those premiums arise. See 11 U.S.C. § 503(b)(1)(B)(i).
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18 Opinion of the Court 20-13832
B. The Trustees’ Claim Under Section 9711 and Resulting Claims
for 1992 Plan Premiums Were Discharged in 1995.
The remainder of this appeal concerns the companies’ obli-
gation to provide health-care benefits directly to retirees, see 26
U.S.C. § 9711(a), and to pay premiums to the 1992 Plan if the retir-
ees do not receive benefits under section 9711, see id.§ 9712(b)(2)(B), (d). The companies argue that both obligations
were “claims” that existed and were discharged in 1995. We agree
and discuss each obligation in turn.
1. The Trustees’ Alleged Equitable Right to Compel the Compa-
nies to Provide Benefits Is a Claim Under Section 101(5)(B) That
Existed and Was Discharged in 1995.
The Trustees’ alleged right under section 9711 is a “claim.”
A creditor holds a “claim” when it has a “right to an equitable rem-
edy for breach of performance if such breach gives rise to a right to
payment,” 11 U.S.C. § 101(5)(B), and the Trustees held such a claim
in 1995. When a covered entity breaches its obligation to provide
health-care benefits to retirees under section 9711, the 1992 Plan
provides those benefits instead and assesses the entity premiums
commensurate with the costs of providing the benefits. See 26
U.S.C. § 9712(b)(2)(B), (d)(1)(A), (d)(2). The Trustees assert that
such a breach occurred and seek an equitable remedy—specific per-
formance of the companies’ obligations under section 9711. Be-
cause the Trustees hold a right to an equitable remedy for breach
of the companies’ obligations under section 9711, and that breach
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20-13832 Opinion of the Court 19
gives rise to a right to payment of premiums to the 1992 Plan, the
Trustees’ alleged right to specific performance is a “claim.”
The Trustees’ claim was discharged in 1995. Like with the
claim for Combined Fund premiums, the Trustees and the compa-
nies had the requisite relationship, and the companies’ liability un-
der section 9711 is based solely on the companies’ pre-confirmation
conduct and was fixed in 1992. See 26 U.S.C. § 9711(a), (c)(1); see
also id. § 9712(d)(1), (d)(4); E. Enters., 524 U.S. at 537 (plurality
opinion). As we have explained, it is immaterial that in 1995 the
claim was not yet enforceable or that the amount of the 1992 Plan
premiums was uncertain. Both those facts are irrelevant in deter-
mining whether the Trustees held a pre-confirmation “claim” un-
der the Bankruptcy Code. See Midland Funding, 137 S. Ct. at 1412;
11 U.S.C. § 101(5)(B). The dissent argues that liability is based only
“in part . . . on the companies’ pre-confirmation conduct” and that
the “crucial basis for . . . liability is the post-confirmation . . .
breach” of performance. Dissenting Op. 8–9, 13, but the dissent
confuses the existence of a liability with its enforceability. In 1995,
the Trustees held a right to an equitable remedy for breach of per-
formance—and so a claim within the meaning of the statute—and
could enforce that right when a breach occurred. Compare id. at
6–7, 9 (citing CPT Holdings, Inc. v. Indus. & Allied Emps. Union
Pension Plan, Local 73, 162 F.3d 405, 409 (6th Cir. 1998) (conclud-
ing that a creditor did not hold a right to payment under section
101(5)(A) because an “enforceable right to payment . . . may never”
arise (emphasis added))), with Midland Funding, 137 S. Ct. at 1412
USCA11 Case: 20-13832 Date Filed: 05/03/2022 Page: 20 of 41
20 Opinion of the Court 20-13832
(explaining, in a decision postdating CPT Holdings, that an “unen-
forceable claim is nonetheless . . . a ‘claim’ . . . as the Code uses
th[at] term[]”).
The Trustees resist this conclusion and urge us to apply a
test from the Seventh Circuit, first announced in In re Udell, for
determining whether a right to an equitable remedy is a claim. See
18 F.3d 403, 408 (7th Cir. 1994); 11 U.S.C. § 101(5)(B). Udell held
“that a right to an equitable remedy for breach of performance is a
claim if the same breach also gives rise to a right to a payment with
respect to the equitable remedy.” In re Udell, 18 F.3d at 408 (em-
phasis added) (internal quotation marks omitted). Under that test,
“the necessary relationship . . . exists” between the right to pay-
ment and the equitable remedy if, for example, “the right to pay-
ment is an alternative to the right to an equitable remedy.” Id. (em-
phasis added) (internal quotation marks omitted). By contrast, the
necessary relationship does not exist if the breach gives rise to a
right to an equitable remedy in addition to the right to payment.
Id. at 408–10. Applying the Udell test, the Trustees argue that their
alleged right to compel compliance with section 9711 is not a claim
because the obligation to pay premiums to the 1992 Plan is not an
“alternative” to the obligation under section 9711.
We decline to adopt the Udell test. As both the Udell major-
ity and concurrence acknowledged, the test that there be some
close relationship between the equitable remedy and the right to
payment conflicts with the text of section 101(5)(B). Compare id.
at 408 (“recogniz[ing] the appealing simplicity of [the debtor’s]
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20-13832 Opinion of the Court 21
‘plain language’ reading of [section] 101(5)(B)” but rejecting that
reading), and id. at 412 & n.5 (Flaum, J., concurring in the result)
(agreeing with the majority opinion “that adding the word ‘alter-
native’ immediately before ‘right’” in the statute “is necessary for
th[e] statute to work in the real world”), with CSX Corp. v. United
States, 18 F.4th 672, 680 (11th Cir. 2021) (“When the words of a
statute are unambiguous, . . . judicial inquiry is complete.” (inter-
nal quotation marks omitted)). See also Daniel J. Bussel, Doing Eq-
uity in Bankruptcy, 34 EMORY BANKR. DEV. J. 13, 42–43 (2017). Sec-
tion 101(5)(B) directs us to consider only whether the same breach
“gives rise” to both the right to an equitable remedy and a right to
payment. 11 U.S.C. § 101(5)(B). And, as we have already explained,
the Trustees’ right to equitable relief is triggered by the same
breach that gives rise to their right to payment of 1992 Plan premi-
ums.
The Trustees and the dissent further suggest that even if the
Trustees’ right is a claim, that claim did not exist until Walter En-
ergy ceased providing benefits in 2016. Dissenting Op. 6–7. But the
text of the statute is unambiguous that a “right to an equitable rem-
edy” can exist before a “breach of performance” occurs. See 11
U.S.C. § 101(5)(B) (explaining that “claim” includes “a right to an
equitable remedy . . . whether or not such right . . . is reduced to
judgment, fixed, contingent, matured, [or] unmatured” (emphasis
added)). The dissent argues that the use of the word “‘breach’” two
times in section 101(5)(B) “suggest[s]” that a prior breach is “neces-
sary for a claim.” Dissenting Op. 12 But neither use of the word
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22 Opinion of the Court 20-13832
“breach” in section 101(5)(B) references the timing of that breach;
instead, section 101(5)(B) uses the word “breach” to make clear that
the “right to an equitable remedy” and the “right to payment” must
be connected by a common “breach of performance.” See 11 U.S.C.
§ 101(5)(B) (defining “claim” as a “right to an equitable remedy for
breach of performance if such breach gives rise to a right to pay-
ment” (emphases added)). And in the light of the plain meaning of
the text of section 101(5)(B), it is irrelevant that section 101(5)(A)
does not “contain[] the word ‘breach.’” Contra Dissenting Op. 12–
13.
Requiring a pre-confirmation breach would mean that debt-
ors could only “deal[] with” “all [their] legal obligations . . . in the
bankruptcy case” by waiting until preexisting obligations become
due before filing for bankruptcy. See In re Piper Aircraft, 58 F.3d at
1576 (internal quotation marks omitted). But a “claim” can be dis-
charged before performance becomes due, so long as the debtor’s
liability was incurred by pre-confirmation conduct. See 11 U.S.C.
§ 101(5)(B) (including rights to an equitable remedy that are “un-
matured”); cf. In re Stewart Foods, 64 F.3d at 145–46 (explaining
the “pernicious consequences” of requiring an obligation to be
breached or to be enforceable before it can be discharged); Midland
Funding, 137 S. Ct. at 1412 (rejecting the argument that “claim” is
limited to “enforceable obligation[s]” (internal quotation marks
omitted)). So, because the Trustees held a claim in 1995, that claim
was discharged by the plan of reorganization.
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20-13832 Opinion of the Court 23
The dissent attempts to insert a prior-breach requirement
into section 101(5)(B) to “further[] the purposes of the . . . Code”
by ensuring that the “claim . . . [is] suitable for bankruptcy,” Dis-
senting Op. 10–11, but no addition is necessary or appropriate. See
Badgerow v. Walters, 142 S. Ct. 1310, 1318 (2022) (“We have no
warrant to redline [a statute].”). Requiring that the breach of per-
formance also give rise to a right to payment ensures that a claim
can be estimated in monetary terms even if that breach has not yet
occurred. The dissent’s added requirement would do nothing to
“fulfill[] the purposes of the . . . Code,” Dissenting Op. 11, but
would contravene what we have said was Congress’s intent that
“all legal obligations of the debtor, no matter how remote or con-
tingent[, are able to] be dealt with in . . . bankruptcy” if they fall
within the statutory definition, see Midwest Holding #7, LLC v.
Anderson (In re Tanner Family, LLC ), 556 F.3d 1194, 1197 (11th
Cir. 2009) (internal quotation marks omitted) (explaining that this
“intent” was “made clear” by the text). And, in any event, we are
not at liberty to supplement an unambiguous provision like section
101(5)(B) to accommodate “even the most formidable policy argu-
ments.” See BP P.L.C. v. Mayor of Baltimore, 141 S. Ct. 1532, 1542
(2021) (internal quotation marks omitted).
Because we hold that the Trustees’ alleged right to specific
performance is a “claim” within the meaning of section 101(5)(B),
we need not address the companies’ argument that the Trustees’
right is an “equitable” “right to payment” under section 101(5)(A),
too. Cf. County of San Mateo v. Peabody Energy Corp. (In re
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24 Opinion of the Court 20-13832
Peabody Energy Corp.), 958 F.3d 717, 724 (8th Cir. 2020) (recog-
nizing that equitable remedies are “often” no more than “orders”
to make “payments” (alterations adopted) (internal quotation
marks omitted)); Home State Bank, 501 U.S. at 83–84 (concluding
that the equitable right to foreclose on real property is a claim un-
der both section 101(5)(A) and 101(5)(B)).That is, we need not de-
cide—as some of our sister circuits have concluded—whether a
creditor that can enforce a debtor’s obligation to make payments
to a third party, such as an insurance company or health-care pro-
vider, holds a right to payment. See In re Peabody Energy, 958 F.3d
at 725 (“[A] claim includes virtually all obligations to pay money,
without regard to who receives the payment.” (citation and inter-
nal quotation marks omitted)); In re Altair Airlines, Inc., 727 F.2d
88, 90–91 (3d Cir. 1984) (holding that a collective bargaining agent
held a claim even though the rights to payment the agent was au-
thorized to enforce were held by workers and the payments would
go to those workers). Nor need we decide whether the Coal Act
allows covered entities to make payments directly to the retirees
for their health-care expenditures or whether covered entities must
pay an insurance company or health-care provider to provide those
benefits to the retirees. See, e.g., 26 U.S.C. § 9711(a) (imposing on
certain companies the obligation to “continue to provide health
benefits coverage” to covered retirees).
USCA11 Case: 20-13832 Date Filed: 05/03/2022 Page: 25 of 41
20-13832 Opinion of the Court 25
2. The Trustees’ Claims for 1992 Plan Premiums Existed and
Were Discharged in 1995.
In the light of our earlier conclusions, we have little trouble
concluding that all claims against the companies held by the Trus-
tees for 1992 Plan premiums existed and were discharged in 1995.
Liability to the 1992 Plan, including liability to provide a security
payment and pay prefunding premiums, was fixed before 1995. To
be sure, the total amount that would be owed to the 1992 Plan was
uncertain. But that uncertainty means only that the Trustees’
claims were “unliquidated” and required estimation, not that those
claims did not exist. See 11 U.S.C. § 101(5)(A). In so holding, we
join the many courts that have treated future Combined Fund and
1992 Plan premiums as similarly dischargeable in bankruptcy. See,
e.g., Holland v. Westmoreland Coal Co. (In re Westmoreland Coal
Co.), 968 F.3d 526, 531, 536, 544 (5th Cir. 2020) (explaining that “all
courts to consider the question have held that Coal Act obligations
are subject to modification” and collecting cases); In re Walter En-
ergy, 911 F.3d at 1157; In re Alpha Nat. Res., Inc., 552 B.R. 314, 326–
28 (Bankr. E.D. Va. 2016); In re Horizon Nat. Res. Co., 316 B.R.
268, 274–79 (Bankr. E.D. Ky. 2004); see also In re Bethlehem Steel
Corp., 2004 WL 601656, at *2 (Bankr. S.D.N.Y. Feb. 9, 2004) (cited
in In re Walter Energy, 911 F.3d at 1145) (confirming a plan of re-
organization in which the Trustees for the Fund and the Plan had
voluntarily agreed “not to bring or maintain any legal action
against” entities for premiums to the Combined Fund and 1992
Plan in exchange for an upfront payment).
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26 Opinion of the Court 20-13832
IV. CONCLUSION
We REVERSE the judgment in favor of the Trustees and
REMAND for further proceedings consistent with this opinion.
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20-13832 ANDERSON, J., Concurring in part & dissenting in part 1
ANDERSON, Circuit Judge, concurring in part & dissenting in part:
While I agree with the majority that the companies’ liability
for the Combined Fund premiums, 26 U.S.C. § 9704, was dis-
charged, I do not agree with the majority that the companies’ lia-
bility for maintaining an Individual Employer Plan, 26 U.S.C.
§ 9711, was discharged pursuant to 11 U.S.C. § 101(5)(B). 1 Nor do
I agree that the companies’ liability for premiums to the 1992 Plan,
26 U.S.C. § 9712, was discharged. Thus, I respectfully dissent to
that extent.
I.
As the majority notes, Congress enacted the Coal Act in
1993, converting “coal companies’ contractual obligations to pro-
vide health care benefits to workers . . . into a statutory require-
ment.” United Mine Works of Am. Combined Benefit Fund v. Tof-
fel (In re Walter Energy, Inc.), 911 F.3d 1121, 1130 (11th Cir. 2018).
The companies here were related persons to a signatory operator,
Jim Walter Resources, 2 as of July 20, 1992. See 26 U.S.C.
§ 9701(c)(2). The companies, then, are jointly and severally liable
for the Coal Act obligations of the signatory operator. See 26
U.S.C. §§ 9704(a), 9711(c), 9712(d)(4).
1Because the majority does not address 11 U.S.C. § 101(5)(A) with respect to
this issue, I also do not.
2Jim Walter Resources was a subsidiary of Walter Industries. After the 1995
bankruptcy, Walter Industries changed its name to Walter Energy.
USCA11 Case: 20-13832 Date Filed: 05/03/2022 Page: 28 of 41
2 ANDERSON, J., Concurring in part & dissenting in part 20-13832
The Coal Act created three obligations for signatory opera-
tors and their related persons. First, the Coal Act requires the pay-
ment of premiums to the Combined Fund to provide health bene-
fits to coal industry retirees and their families who, on July 20, 1992,
were receiving “benefits from the 1950 UMWA Benefit Plan or the
1974 UMWA Benefit Plan.” 26 U.S.C. § 9703(f). Second, the Coal
Act requires the maintenance of an Individual Employer Plan
(“IEP”) for those retirees who were receiving health benefits cov-
erage through an IEP as of February 1, 1993. 26 U.S.C. § 9711.
Third, as relevant here, if a covered entity fails to maintain an IEP
for those retirees, the Coal Act requires the payment of premiums
to the 1992 Plan to cover the cost of providing health benefits to
those retirees. 26 U.S.C. § 9712(b)(2)(B).
The companies, their parent company, and Jim Walter Re-
sources all filed bankruptcy petitions in 1989. The consolidated
bankruptcy was confirmed in 1995. As required by the confirma-
tion plan, Walter Energy maintained an IEP and paid Combined
Fund premiums as required by the Coal Act. It did so until 2016.
No premiums were owed to the 1992 Plan until Walter Energy
ceased maintaining its IEP in 2016. Thereafter, the Trustees sued
the companies, seeking compliance with the Coal Act in the form
of Combined Fund premiums, maintenance of an IEP, and 1992
Plan premiums for the time during which the companies failed to
maintain an IEP. In turn, the companies filed an action in their
original bankruptcy proceeding, arguing that all their Coal Act ob-
ligations were discharged in the 1995 bankruptcy confirmation.
USCA11 Case: 20-13832 Date Filed: 05/03/2022 Page: 29 of 41
20-13832 ANDERSON, J., Concurring in part & dissenting in part 3
A bankruptcy confirmation “discharges the debtor from any
debt that arose before the date of such confirmation.” 11 U.S.C.
§ 1141(d)(1)(A). The Bankruptcy Code defines “debt” as “liability
on a claim.” 11 U.S.C. § 101(12). In turn, the Bankruptcy Code
defines claim as:
(A) right to payment, whether or not such right is re-
duced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undis-
puted, legal, equitable, secured, or unsecured; or
(B) right to an equitable remedy for breach of perfor-
mance if such breach gives rise to a right to payment,
whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, un-
matured, disputed, undisputed, secured, or unse-
cured.
11 U.S.C. § 101(5).
Applying this definition, I agree with the majority that the
companies’ liability to pay Combined Fund premiums was a claim
when the Coal Act was enacted and thus was discharged by the
companies’ 1995 bankruptcy confirmation. However, the IEP ob-
ligation was not a claim under § 101(5)(B) until 2016 and could not
have been discharged in 1995. Similarly, the companies’ liability
for 1992 Plan premiums did not arise until 2016 and was not dis-
charged in 1995.
II.
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4 ANDERSON, J., Concurring in part & dissenting in part 20-13832
Before discussing my points of disagreement, I want to
briefly explain why I agree that the companies’ liability for Com-
bined Fund premiums was discharged in 1995, which, I think, may
be helpful in explaining my disagreement. After discussing that is-
sue, I will discuss the IEP obligation and 1992 Plan premiums.
A. The Combined Fund Premiums
In our Circuit, we use the following two-part test for deter-
mining whether a claim arose before confirmation: (1) whether
“events occurring before confirmation create a relationship . . . be-
tween the claimant and the debtor[]” and (2) whether the “basis for
liability is the debtor’s pre[-confirmation] conduct.” Epstein v. Off.
Comm. of Unsecured Creditors of Est. of Piper Aircraft Corp. (In
re Piper Aircraft, Corp.), 58 F.3d 1573, 1577 (11th Cir. 1995). 3 In
other words, we require a pre-confirmation relationship and pre-
confirmation conduct.
3 Our decision in In re Piper Aircraft required a pre-confirmation relationship
but pre-petition conduct. 58 F.3d at 1577. The district court had required a
pre-petition relationship and pre-petition conduct. Id. In explaining why we
modified the district court’s test and “chang[ed] the focal point of the relation-
ship from the petition date to the confirmation date,” we noted that we were
making the test “consistent with the policies underlying the Bankruptcy
Code.” Id. at 1577 n.5. That consistency should extend to the timing of the
relevant conduct—i.e., pre-confirmation conduct should be required. See
Wright v. Owens Corning, 679 F.3d 101, 107 (3d Cir. 2012) (citing our decision
in In re Piper Aircraft to alter its test to look for pre-confirmation instead of
pre-petition conduct). Thus, I, like the majority, look for both a pre-confirma-
tion relationship and pre-confirmation conduct here.
USCA11 Case: 20-13832 Date Filed: 05/03/2022 Page: 31 of 41
20-13832 ANDERSON, J., Concurring in part & dissenting in part 5
The companies’ status as related persons was determined
based on their relationship with a signatory operator on July 20,
1992. See 26 U.S.C. § 9703(f). And the companies’ liability for
Combined Fund premiums was fixed on the Coal Act’s effective
date, February 1, 1993. See 26 U.S.C. § 9702(a)(2). As of that date,
the Trustees and the companies had the requisite relationship. And
the companies needed to engage in no further conduct for their
liability for Combined Fund premiums to attach. While the Trus-
tees right to payment was contingent because it was based on the
lifespan of the retirees, the cost of health benefits, and the longevity
of other signatory operators and their related persons, the Trustees
had a right to payment for all future Combined Fund premiums as
of 1993. See 26 U.S.C. § 9704(b). Because the companies’ liability
to pay Combined Fund premiums arose in 1993, I agree with the
majority that it was discharged in the companies’ 1995 bankruptcy
confirmation pursuant to § 101(5)(A).
Two final points are worth mentioning. First, the Trustees’
claim for Combined Fund premiums is a claim under § 101(5)(A)—
i.e., it is a right to payment. Therefore, it is a claim without the
necessity of a breach. See Stewart Foods, Inc. v. Broecker (In re
Stewart Foods, Inc.), 64 F.3d 141, 146 (4th Cir. 1995) (finding that
101 future payments constituted a claim even though the payments
were due after the bankruptcy). Second, I also agree with the ma-
jority that this appeal does not turn on an analogy to taxes. Major-
ity Op. at 17. The Combined Fund premiums, even if considered
taxes, are based solely on pre-confirmation conduct. See Saint
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6 ANDERSON, J., Concurring in part & dissenting in part 20-13832
Catherine Hosp. of Ind., LLC v. Ind. Fam. & Soc. Servs. Admin.,
800 F.3d 312, 317 (7th Cir. 2015) (rejecting a similar analogy to taxes
because the liability was based entirely on pre-petition conduct).
B. The Individual Employer Plan and 1992 Plan Pre-
miums.
Any possible claim pursuant to § 101(5)(B) that the Trustees
had to enforce the companies’ IEP obligation did not arise until
2016. Nor did any claim for 1992 Plan premium payments arise
until 2016. Because a bankruptcy confirmation only “discharges
the debtor from any debt that arose before confirmation,” 11
U.S.C. § 1141(d)(1)(A), neither of those claims was discharged in
the 1995 bankruptcy. I will first address the IEP obligation and then
discuss the 1992 Plan premiums.
The Coal Act requires covered entities and their related per-
sons to “continue to provide health benefits coverage . . . which is
substantially the same as . . . the coverage provided by such plan as
of January 1, 1992” to any retiree and the retiree’s eligible benefi-
ciaries who were receiving such coverage as of February 1, 1993.
26 U.S.C. § 9711(a). The majority argues that the Trustees had a
claim with respect to the companies’ IEP obligation under
§ 101(5)(B) and that the claim existed in 1995. Majority Op. at 18–
19. I respectfully believe that this view misunderstands when a
claim arises under § 101(5)(B).
A creditor holds a claim under § 101(5)(B) when it has “a
right to an equitable remedy for breach of performance if such
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20-13832 ANDERSON, J., Concurring in part & dissenting in part 7
breach gives rise to a right to payment.” Before there is a “breach
of performance” by the debtor, the creditor can have no “right to
an equitable remedy.” This is the same reasoning the Sixth Circuit
employed when it determined that for ERISA withdrawal liability,
no right to payment existed “until an employer actually withdraws
from a plan.” CPT Holdings, Inc. v. Indus. & Allied Emps. Union
Pension Plan, Local 73, 162 F.3d 405, 409 (6th Cir. 1998). The rea-
soning of the Sixth Circuit is persuasive. Just as a right to payment
for statutory damages cannot exist until the statute is violated, a
right to an equitable remedy for breach of performance cannot ex-
ist until there is a breach of performance. Since the relevant breach
occurred in 2016 when Walter Energy and the companies failed to
maintain an IEP, the claim arising out of that breach cannot have
been discharged in 1995.
The majority argues that it does not matter whether the
Trustees’ right to an equitable remedy was enforceable in 1995.
Majority Op. at 19–20. That is true. But the relevant question is
whether there existed as of 1995 a “right to an equitable remedy for
breach of performance.” 11 U.S.C. § 101(5)(B). The majority’s fo-
cus on the Supreme Court’s decision in Midland Funding, LLC v.
Johnson, 137 S. Ct. 1407 (2017) is, thus, misplaced. There, the
Court determined that a creditor had a right to payment of a debt
even though the statute of limitations had expired, making the
right to payment unenforceable. Id. at 1411. In other words, Mid-
land Funding dealt with the judicial enforceability of a right to pay-
ment that already existed. Here, the question is when the right to
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8 ANDERSON, J., Concurring in part & dissenting in part 20-13832
an equitable remedy for breach of performance arises. The Su-
preme Court’s decision in Midland Funding sheds no light on that
question. And because there was no breach of performance until
2016, the Trustees’ right to an equitable remedy for breach of per-
formance simply did not exist in 1995.
The majority contends that a claim under § 101(5)(B) can ex-
ist before a breach occurs “so long as the debtor’s liability was in-
curred by pre-confirmation conduct.” Majority Op. at 22. I submit
that the majority misunderstands what conduct gives rise to the
claim here. The majority seems to believe that the passage of the
Coal Act or the date of determination of related persons or possibly
the signing of the national wage agreements is the relevant con-
duct. But the crucial conduct which gives rise to the basis for the
companies’ liability is the breach of the IEP obligation. Because the
Trustees’ hold a claim only because the breach (failure to maintain
the IEP) gives rise to a right to payment (1992 Plan premiums), the
relevant conduct giving rise to the claim is the companies’ breach
of their IEP obligation. This was post-confirmation conduct.
Thus, the Trustees’ claim arising from the companies’ post-confir-
mation conduct could not have been discharged in the 1995 bank-
ruptcy. And while the majority may argue that the right to pay-
ment is merely contingent, a debtor’s own future conduct cannot
make a claim contingent. See Siegel v. Fed. Home Loan Mortg.
Corp., 143 F.3d 525, 532–33 (9th Cir. 1998) (“A contingent claim is
‘one which the debtor will be called upon to pay only upon the
occurrence or happening of an extrinsic event which will trigger
USCA11 Case: 20-13832 Date Filed: 05/03/2022 Page: 35 of 41
20-13832 ANDERSON, J., Concurring in part & dissenting in part 9
the liability of the debtor to the alleged creditor.’” (quoting
Fostvedt v. Dow (In re Fostvedt), 823 F.2d 305, 306 (9th Cir.
1987))).
One could argue against this reading of the statute because
IEP liability here will be based, in part, on the companies’ pre-con-
firmation conduct. But while Coal Act liability attaches to compa-
nies based on their pre-confirmation conduct, E. Enters. v. Apfel,
524 U.S. 498, 537, 118 S. Ct. 2131, 2153 (1998) (plurality opinion),
holding the debtor liable (notwithstanding bankruptcy) for claims
that are based in part on pre-confirmation conduct does not offend
the Bankruptcy Code if, as here, the claim arises because of post-
confirmation conduct, CPT Holdings, 162 F.3d at 406–09 (holding
that a company’s ERISA withdrawal liability could be based, in
part, on its pre-confirmation participation in and contributions to a
multiemployer plan because the Plan’s claim did not arise until the
company’s post-confirmation conduct of actually withdrawing
from the plan). In binding precedent, we too have held that con-
firmation does not discharge a debtor from liability based on post-
confirmation conduct, even though pre-confirmation conduct—
i.e., agreeing to the contract—was also essential for liability to at-
tach. See Shure v. Vermont (In re Sure-Snap Corp.), 983 F.2d 1015,
1018 (11th Cir. 1993). Similarly, the Sixth Circuit found that it was
permissible to base a reorganized debtor’s contribution rate to
Michigan’s employment security fund on that debtor’s pre-confir-
mation contribution history. Mich. Emp. Sec. Comm’n v. Wolver-
ine Radio Co. (In re Wolverine Radio Co.), 930 F.2d 1132, 1136 (6th
USCA11 Case: 20-13832 Date Filed: 05/03/2022 Page: 36 of 41
10 ANDERSON, J., Concurring in part & dissenting in part 20-13832
Cir. 1991). Therefore, even though the companies’ pre-confirma-
tion conduct may contribute to their liability, a claim that depends
in part on that conduct is not discharged if it arises because of post-
confirmation conduct. Bankruptcy confirmation does not absolve
a company of all pre-confirmation conduct. See In re Piper Air-
craft, 58 F.3d at 1577 (finding that a claim had not arisen because,
despite pre-confirmation conduct, there was no pre-confirmation
relationship, thus necessarily allowing for a future claim based on
that pre-confirmation conduct). Instead, bankruptcy confirmation
discharges claims that arose before confirmation, but not claims
that arose after confirmation. And because the companies’ post-
confirmation 2016 breach of performance—i.e., failure to maintain
an IEP—gives rise to the Trustees’ claim, the Trustees did not have
a claim in 1995 with respect to the companies’ IEP obligation.
Requiring a breach for a claim to arise under § 101(5)(B) is
critical to furthering the purposes of the Bankruptcy Code. Bank-
ruptcy allows a debtor a “financial ‘fresh start’” by resolving all
claims against the debtor in the same bankruptcy. See Owaski v.
Jet Fla. Sys., Inc. (In re Jet Fla. Sys., Inc.), 883 F.2d 970, 972 (11th
Cir. 1989) (quoting Thomas H. Jackson, The Fresh-Start Policy in
Bankruptcy Law, 98 Harv. L. Rev. 1393, 1396–97 (1985)). By forc-
ing all present claimants into the bankruptcy, the Bankruptcy Code
“facilitate[s] the prime bankruptcy policy of equality of distribution
among creditors.” Union Bank v. Wolas, 502 U.S. 151, 161, 112 S.
Ct. 527, 533 (1991) (quoting H.R. Rep. No. 95-595, at 177–78
(1977)). In essence, bankruptcy collects all claims against a debtor
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20-13832 ANDERSON, J., Concurring in part & dissenting in part 11
and divides the debtor’s available resources among those claims.
Therefore, it is essential that for any claim to be dischargeable in
bankruptcy, it must be able to be represented by money damages.
Under § 101(5)(B), if the relevant breach does not give rise to a right
to payment, the equitable remedy is not a claim because it is irrel-
evant to providing a financial fresh start to the debtor and equitable
distribution to the creditors. And where a breach does give rise to
a right to payment, the breach is necessary for a claim to arise un-
der § 101(5)(B) because the breach and related right to payment are
what allow the claim to be suitable for bankruptcy. Thus, requir-
ing a breach before a claim arises under § 101(5)(B) fulfills the pur-
poses of the Bankruptcy Code.
Moreover, requiring such a breach ensures that the essential
element of a bankruptcy claim—a right to payment—exists before
discharge. Under § 101(5)(B), a breach must give rise to a right to
payment for a right to an equitable remedy to be a claim. It is the
right to payment that allows the supposed claim to be suitable for
bankruptcy—i.e., provides a financial fresh start to the debtor and
equitable distribution to creditors. Therefore, a right to payment
is the key feature of any bankruptcy claim. See 11 U.S.C.
§ 101(5)(A) (defining claim as a “right to payment); Id. § 101(5)(B)
(defining claim to include a “right to an equitable remedy for
breach of performance if such breach of performance gives rise to
a right to payment” (emphasis added)). Allowing a discharge when
no right to payment exists contravenes the purpose and text of the
Bankruptcy Code.
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12 ANDERSON, J., Concurring in part & dissenting in part 20-13832
Most significantly, requiring a pre-confirmation breach is
faithful to the statutory text. The text of § 101(5)(B) contains the
word “breach” twice, suggesting it is necessary for a claim. One
could argue that § 101(5)(B) does not explicitly require a breach to
occur before confirmation. But § 101(5)(B) defines claim for the
entire Bankruptcy Code. Other provisions of the code discuss the
relevance of timing. As noted above, § 1141(d)(1)(A) provides that
confirmation “discharges the debtor from any debt that arose be-
fore the date of such confirmation.” Recall that “[t]he term ‘debt’
means liability on a claim,” 11 U.S.C. § 101(12), so that the defini-
tions of debt and claim are coextensive. Similarly, the Bankruptcy
Code’s section on administrative expenses provides that taxes “in-
curred by the estate” are an allowed administrative expense. 11
U.S.C. § 503(b)(1)(B). The Bankruptcy Code also provides that
“property acquired by the estate or by the debtor after the com-
mencement of the case is not subject to any lien resulting from any
security agreement entered into by the debtor before the com-
mencement of the case.” 11 U.S.C. § 552. The Bankruptcy Code’s
substantive provisions are riddled with delineations based on tim-
ing that impact how different claims are handled. The natural and
plausible meaning of § 101(5)(B)—“right to an equitable remedy
for breach of performance if such breach gives rise to a right to pay-
ment”—is that the existence of a claim depends upon there being a
breach of performance. And § 1141(d)(1)(A)—providing that a
claim must arise before the date of confirmation—means that the
breach of performance must arise—i.e., occur—before confirma-
tion. And this plain meaning is bolstered by the contrast to
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20-13832 ANDERSON, J., Concurring in part & dissenting in part 13
§ 101(5)(A), which neither contains the word “breach” nor requires
a breach. See In re Stewart Foods, 64 F.3d at 146.
It also seems to me that the majority’s position is in tension
with the established law that a bankruptcy confirmation plan does
not discharge claims that arise on account of post-confirmation
conduct of the debtor. See 8 Collier on Bankruptcy ¶ 1141.05 (“The
discharge operates on all claims that arose before the date of con-
firmation.”); In re Piper Aircraft, 58 F.3d at 1577 (holding that one
prerequisite for discharge is that the “basis for liability” of the
debtor be the debtor’s pre-confirmation conduct); In re Sure-Snap,
983 F.2d at 1018 (holding that there was no discharge where the
basis for the liability of the debtor was the debtor’s post-confirma-
tion conduct). As noted above, although there was pre-confirma-
tion conduct on the part of Walter Energy and the companies, it
seems clear to me that the crucial basis for the liability is the post-
confirmation 2016 breach of the obligation to maintain an IEP.
That post-confirmation breach gave rise to any claim the Trustees’
have with respect to the companies’ IEP obligation. Because that
breach occurred in 2016, the companies’ 1995 bankruptcy confir-
mation could not discharge the Trustees’ claim arising from it. As
a result, the Trustees’ claim with respect to the companies’ IEP ob-
ligation was not discharged in 1995 pursuant to § 101(5)(B). 4
4 I note that neither the companies nor the majority point to a case holding
that a claim was discharged under § 101(5)(B) in the absence of a pre-confir-
mation breach of performance.
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14 ANDERSON, J., Concurring in part & dissenting in part 20-13832
After determining that the companies’ IEP obligation was
not discharged in 1995, it is straightforward to conclude that their
liability for 1992 Plan premiums was also not discharged. In 2016,
when Walter Energy ceased maintaining its IEP and the companies
declined to do so themselves, both Walter Energy and the compa-
nies here breached their IEP obligation under 26 U.S.C. § 9711.
Thus, the companies’ 2016 breach—i.e., post-confirmation con-
duct—gave rise to the companies’ liability to pay 1992 Plan premi-
ums under § 9712. Therefore, the Trustees’ claim against the com-
panies for 1992 Plan premiums also arose in 2016. Because that
claim did not arise until 2016, it was not discharged in 1995. The
existence of security or prefunding requirements, Majority Op. at
25, do not alter this conclusion. While those requirements arose
pre-confirmation, the 1992 Plan premiums at issue here arose be-
cause of the companies’ breach of their IEP obligation. Because
the companies’ obligation to pay 1992 Plan premiums arose based
on post-confirmation conduct, it was not discharged in the bank-
ruptcy confirmation.
While the majority notes that courts “have treated Com-
bined Fund and 1992 Plan premiums as similarly dischargeable in
bankruptcy,” Majority Op. at 25, my conclusion is not at odds with
those decisions. The Trustees’ claim for Combined Fund premi-
ums arose in 1993 and was discharged in 1995, but the Trustees’
claim for 1992 Plan premiums did not arise until 2016. Therefore,
instead of being at odds with those decisions, my view merely re-
quires that for those premiums to be discharged, they must “ar[i]se
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20-13832 ANDERSON, J., Concurring in part & dissenting in part 15
before the date of [bankruptcy] confirmation.” 11 U.S.C.
§ 1141(d)(1)(A). Because the Trustees’ claim for 1992 Plan premi-
ums did not do so, it was not discharged.
III.
While I agree with the majority that the Trustees’ claim for
Combined Fund premiums was discharged in 1995, I disagree with
the majority’s holding that the 1995 confirmation also discharged
the companies’ IEP obligation under § 101(5)(B) and the compa-
nies’ liability for 1992 Plan premiums. Respectfully, I dissent to that
extent.