ASM Capital, LP v. Ames Department Stores, Inc. (In Re Ames Department Stores, Inc.)

This appeal raises the question of whether section 502(d) of the Bankruptcy Code, which bars allowance of certain claims filed against the debtor’s estate by alleged recipients of preferential transfers, also bars allowance to such a claimant of postpetition administrative expenses pursuant to section 503(b) of the Bankruptcy Code. We conclude that it does not, and consequently we vacate the order of the district court.

I. BACKGROUND

A. Facts

The debtor-appellee Ames Department Stores, Inc. was a large chain of department stores (collectively, “Ames”), that commenced a voluntary case under…