Missouri Department of Revenue v. L.J. O'Neill Shoe Co. (In re L.J. O'Neill Shoe Co.)

HANSEN, Circuit Judge.

The Missouri Department of Revenue (MDOR) appeals the district court’s1 decision affirming the bankruptcy court’s2 decision which sustained the debtors’ objections to MDOR’s claim for corporate income taxes for the year in which each of the debtors filed chapter 11 bankruptcy. The bankruptcy court and the district court both found that the portions of MDOR’s tax claims that related to the debtors’ prepetition corporate income were not entitled to a first distribution priority as administrative expenses under 11 U.S.C. §§ 507(a)(1) & 503(b). MDOR argues that its entire…