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In the present appeal, as in Travelers: The underlying contract is valid as a matter of state substantive law; none of the section 502(b)(2)-(9) exceptions apply; and the Code is silent as to the particular question presented in Travelers, whether the Code allows "unsecured claims for contractual attorney's fees incurred while litigating issues of bankruptcy law," 549 U. at 453, ; and here, whether the Code allows unsecured claims for "fees incurred while litigating issues of" contract law more generally. In United Merchants, we observed: "Neither [section 506(b)] nor its legislative history sheds any light on the status of an unsecured creditor's contractual claims for attorney's fees." 674 F.2d at 138.
Ogle adduces three additional reasons for construing the Code to disallow unsecured claims for post-petition attorneys' fees. In this way, section 506(b) creates a limited exception for oversecured creditors from the general rule in section 502(b)(2) that disallows a claim for unmatured interest. In United Merchants, however, we rejected the idea "that the policy of equitable distribution" defeats "an unsecured creditor's otherwise valid contractual claim for collection costs....": When equally sophisticated parties negotiate a loan agreement that provides for recovery of collection costs upon default, courts should presume, absent a clear showing to the contrary, that the creditor gave value, in the form of a contract term favorable to the debtor or otherwise, in exchange for the collection costs provision.
Ogle relies on wording in United Savings Association of Texas v. Such a creditor should recover more in the division of the debtor's estate because it gave more to the debtor at the time it made the loan.
Timbers of Inwood Forest Associates, Ltd., (1988), which explained that section 506(b) allows an oversecured creditor to receive post-petition interest only out of the "security cushion," but that an undersecured creditor who lacks any such cushion "falls within the general rule disallowing postpetition interest." Id. From the italicized phrase Ogle would deduce a general rule favoring his position. Rather than providing an undeserved bonus for one creditor at the expense of others, allowing a claim under a collection costs provision merely effectuates the bargained-for terms of the loan contract. Although United Merchants was construing the predecessor to the current Bankruptcy Code, see id. 1, its analysis is equally applicable to the Code today.
On October 1, 2002, Agway filed a voluntary Chapter 11 bankruptcy petition. Manville therefore makes clear that Fidelity possessed a contingent right to post-petition attorneys' fees, and that its right arose pre-petition.
Up until then, Agway had not defaulted on any payment obligation to its insurers; Fidelity's claim in bankruptcy therefore asserted no more than a contingent right to payment under the Agreements. Courts are closely divided on the question presented. This Court allowed such claims in a case that was decided under the former Bankruptcy Act, but that commented on section 506(b) of the Code. However, the dollar amount of Fidelity's contingent right was not a sum certain on the day the bankruptcy petition was filed.