Creditors Cannot Use § 363(b) to Obtain Payment of Their Professional Fees: Commentary on In re Boy Scouts of America (3d Cir. 2025)

I. Introduction

The Third Circuit’s unpublished decision in In re Boy Scouts of America, et al., No. 25‑1136 (3d Cir. Nov. 21, 2025), arises out of one of the most complex mass‑tort bankruptcies in recent history. Although designated “not precedential,” the opinion provides a clear and rigorous application of textualist principles to two recurring questions in Chapter 11 practice:

• Who has authority to invoke 11 U.S.C. § 363(b) to cause the estate to pay money, including professional fees?
• When will creditors’ professional fees be reimbursed as a “substantial contribution” under 11 U.S.C. § 503(b)(3)(D) and (b)(4)?

The Coalition of Abused Scouts for Justice (the “Coalition”), an ad hoc group of sexual‑abuse tort claimants and their state‑court counsel, sought $21 million in professional fees for work performed during the Boy Scouts Chapter 11 proceedings. It argued the fees were payable either:

• under § 363(b) as a proper “use” of estate property approved under the debtor’s “business judgment,” or
• as an administrative expense under § 503(b) based on the Coalition’s alleged “substantial contribution” to the case.

The Bankruptcy Court denied the request; the District Court affirmed; and the Third Circuit has now affirmed again. The appellate court’s holdings, though technically non‑precedential, are doctrinally important:

1. § 363(b) is not available as a vehicle for a creditor to demand payment of its own professional fees. The statute’s text authorizes only the trustee or debtor in possession to act.
2. The “substantial contribution” exception is narrowly construed. Work that is self‑interested, duplicative of official committees’ efforts, or not carefully filtered to exclude purely private benefits will not qualify.

The decision sends a strong signal to ad hoc creditor groups, especially in mass‑tort reorganizations, that they bear real risk their professional fees will remain their own burden unless they can meet the exacting standard of § 503(b).

II. Background of the Case

A. The Boy Scouts Bankruptcy and the Proliferation of Stakeholder Groups

The Boy Scouts of America and Delaware BSA, LLC (the “Debtors”) filed Chapter 11 cases after facing a flood of sexual‑abuse claims and suffering declining membership. Because of the massive tort exposure, the U.S. Trustee appointed a robust governance structure:

• A Future Claimants’ Representative (“FCR”) for future abuse claimants;
• An official committee of unsecured trade creditors; and
• An official committee representing all sexual‑abuse tort claimants (the “TCC”).

These official committees retained professionals pursuant to 11 U.S.C. § 1103(a), with their fees payable as administrative expenses under the Code’s usual framework.

B. Emergence of the Coalition and Its Parallel Professional Infrastructure

Many plaintiffs’ firms representing approximately 60,000 abuse survivors (a majority of the tort claimants) disagreed with the TCC’s litigation and negotiation strategy—particularly over the treatment of local councils and global insurance settlements. They formed the Coalition of Abused Scouts for Justice, an ad hoc, unofficial group, and:

• Retained their own professional firms (lawyers, financial advisors, etc.);
• Had the state‑court counsel direct those professionals’ work in the bankruptcy; and
• Arranged for those state‑court firms to pay the professionals, rather than charging individual survivors directly.

Critically, the Coalition represented to the Bankruptcy Court, and its state‑court counsel represented to their clients, that these Coalition professionals’ fees would not be “charged back” to survivors or reduce their distributions. At the same time, the Coalition expressly reserved the right to seek reimbursement from the estate.

C. The RSA, the Plan, and the Effort to Lock in Fee Reimbursement

About eighteen months into the case, the Debtors proposed a Restructuring Support Agreement (RSA) that included a provision for paying Coalition professional fees under § 363(b). Testimony at the RSA hearing suggested the Coalition’s participation helped streamline negotiations; but there was no clear record that the Coalition’s work was done for the benefit of all claimants, as opposed to advancing its own (and its counsel’s) interests.

The Bankruptcy Court refused to approve fee payment at that stage, emphasizing that it could not decide whether paying the Coalition’s fees was permissible until it knew the outcome of the Coalition’s efforts. The parties never submitted a revised RSA order, and the RSA was never approved as to fees.

The Debtors then pursued plan confirmation. In a modified fifth amended plan:

• The Coalition’s professional fees were capped at $21 million (if payable at all);
• The plan contemplated that fees might be reimbursed “on or as soon as practicable after the Effective Date” provided the Bankruptcy Court later granted an appropriate fee motion under § 363(b), § 503(b), § 1129(a)(4), Bankruptcy Rule 9019, or other applicable law; and
• A process was set out for the Coalition to submit “reasonable, documented, and contractual professional advisory fees” to the Debtors for review.

The Bankruptcy Court:

• Confirmed the modified fifth amended plan; but
• Made clear, both orally and in footnotes, that it was not approving any payment of Coalition fees as part of confirmation; any actual payment would depend on a later, separate motion and a full merits determination.

The Effective Date of the plan was April 19, 2023. Importantly, after confirmation, the Debtors themselves never filed a motion to pay the Coalition’s fees.

D. The Coalition’s Post‑Confirmation Motion for Fees

Several months after the Effective Date, the Coalition, not the Debtors, filed a motion to approve the Debtors’ proposed payment of “Coalition Restructuring Expenses,” seeking $21 million in professional fees and expenses. The motion relied on two distinct statutory theories:

1. § 363(b): Payment was allegedly a permissible use of estate property outside the ordinary course, justified as a sound exercise of the Debtors’ business judgment.
2. § 503(b)(3)(D) and (4): The Coalition argued it had made a “substantial contribution” to the case (e.g., by playing a leading role in settlements with local councils and insurers like Hartford and Century), entitling it to reimbursement of its professionals’ fees and expenses as administrative expenses.

The Debtors did not affirmatively support the motion. The Bankruptcy Court denied relief; the District Court affirmed; and the Coalition appealed to the Third Circuit.

III. Summary of the Third Circuit’s Opinion

Judge Shwartz, writing for a panel that also included Judges Matey and Montgomery‑Reeves, resolved the appeal in three main steps.

A. Jurisdictional Limits: Interlocutory Fee Rulings Merged into the Confirmation Order

The court first clarified its own jurisdiction:

• The Coalition tried to attack earlier, interlocutory orders where the Bankruptcy Court had refused to approve fee payment in the RSA context and pre‑confirmation proceedings.
• Under the “merger” doctrine, those interlocutory orders merged into the final confirmation order.
• Appeals from plan confirmation (and all orders that merge into it) must be filed within 14 days.
• Because the Coalition’s present appeal came more than a year after confirmation, the Third Circuit held it had no jurisdiction to review those earlier orders.

However, the post‑confirmation order denying the Coalition’s own fee motion was a distinct final order, timely appealed. The court exercised jurisdiction over that order.

B. § 363(b): Only the Trustee or Debtor in Possession May Invoke It

On the merits, the court first addressed § 363(b) and held:

• By its plain text, § 363(b) authorizes only “the trustee” (and, by extension, a debtor in possession) to “use, sell, or lease” estate property outside the ordinary course after notice and a hearing.
• The Coalition is neither the trustee nor the debtor in possession.
• Therefore, the Coalition lacked statutory authority to seek relief under § 363(b), and the “business judgment” standard that governs a debtor’s § 363(b) motions was inapplicable to the Coalition’s request.

This holding effectively shuts down the strategy of a creditor (or ad hoc group) directly invoking § 363(b) as an independent ground to compel estate payment of its professional fees.

C. § 503(b): No “Substantial Contribution” Shown

Turning to § 503(b)(3)(D) and (4), the court reaffirmed the Third Circuit’s historically narrow approach to “substantial contribution” claims:

• Creditors generally must pay their own attorneys’ fees (the American Rule), and § 503(b) creates only a limited exception.
• To qualify, a creditor’s efforts must provide an “actual and demonstrable benefit” to the estate and creditors generally, transcending mere self‑interest.
• Bankruptcy courts examine, among other factors:
  • Whether services benefitted the estate as a whole or only the applicant;
  • Whether there was a real, non‑incidental benefit to the estate;
  • Whether services duplicated efforts of existing fiduciaries (e.g., official committees); and
  • Whether the work would have been done anyway absent an expectation of reimbursement.

Applying that test, the Third Circuit held the Bankruptcy Court did not clearly err in finding that:

1. The Coalition’s activities were primarily self‑interested, aiming to maximize survivors’ (and counsel’s) recoveries rather than to benefit the estate as a whole.
2. The Coalition’s Verified Fee Statements contained many time entries for work obviously benefitting only the state‑court firms or their clients (e.g., advertising programs, opposing insurer discovery of survivors and their counsel).
3. The Coalition’s extensive work duplicated the efforts of official bodies like the TCC and other participants; participating in negotiations and reviewing documents are “routine” activities that generally do not meet the substantial contribution threshold.
4. The financial incentives (a $2.4 billion Settlement Trust and contingency fee arrangements) suggested the Coalition and its counsel would have engaged professionals even without any expectation of estate reimbursement.

Because those factual findings were supported by the record and consistent with the governing legal standard from Lebron v. Mechem Financial, Inc., 27 F.3d 937 (3d Cir. 1994), the Third Circuit affirmed the denial of fees under § 503(b).

IV. Detailed Analysis

A. Appellate Jurisdiction and the Merger Doctrine

Although not the headline doctrinal point, the Third Circuit’s jurisdictional analysis is important for practitioners:

• In re Westinghouse Sec. Litig., 90 F.3d 696 (3d Cir. 1996), and the Supreme Court’s Bullard v. Blue Hill Bank, 575 U.S. 496 (2015), anchor the rule that interlocutory orders merge into final orders in bankruptcy—most notably, plan confirmation orders.
• Plan confirmation is a final order covering “any issue actually litigated by the parties and any issue necessarily determined by the confirmation order.”
• The Bankruptcy Rules impose a 14‑day deadline to appeal a confirmation order. Missing that deadline also forfeits the ability to challenge earlier interlocutory rulings that merge into confirmation.

Here:

• The Debtors’ earlier attempts to pay the Coalition’s professionals under § 363(b) via the RSA and pre‑confirmation motions were denied without final resolution; those denials merged into the final confirmation order.
• Because no timely appeal was taken from the confirmation order itself, the Third Circuit correctly held it lacked jurisdiction to revisit those earlier rulings.

This has a practical message: parties who want to preserve appellate review of key interim rulings that are subsumed in the plan must either:

• Appeal the confirmation order in a timely fashion, or
• Obtain some form of separate, final order or certification that can be appealed independently.

B. Who May Invoke § 363(b)? Exclusive Standing of the Trustee/Debtor in Possession

1. Statutory Text and the Hartford Underwriters Analogy

The core § 363(b) holding is grounded in a straightforward textualist reading of the Bankruptcy Code:

• Section 363(b) states: “The trustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate…”
• Under 11 U.S.C. §§ 1107 and 1108, a debtor in possession in Chapter 11 has the rights and powers of a trustee, including the authority to use § 363.

The Third Circuit invokes the Supreme Court’s decision in Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1 (2000), which interpreted similar “the trustee may” language in § 506(c). There, the Court held that a creditor could not independently invoke § 506(c) to surcharge collateral for its own benefit. Only the trustee, or debtor in possession, was authorized to do so.

The Boy Scouts panel extends that reasoning to § 363(b), reinforced by the canon of consistent usage highlighted in Monsalvo v. Bondi, 145 S. Ct. 1232 (2025): when Congress repeats the same phrase in related provisions of a statutory scheme (“the trustee may”), courts presume it has the same meaning throughout. Thus:

2. Application to the Coalition’s Fee Motion

The Coalition argued that:

• The confirmed plan contemplated that its fees could be paid post‑confirmation; and
• The Debtors had agreed in principle that paying those fees was a sound exercise of their business judgment.

But the key structural fact was that, after confirmation:

• No § 363(b) motion was ever filed by the Debtors to authorize fee payment; and
• The only operative motion seeking § 363(b) relief was the Coalition’s own motion.

Under the statutory text as interpreted through Hartford Underwriters, the Coalition, as a creditor/ad hoc group, simply lacked statutory standing to invoke § 363(b) on its own. As a result:

• The “business judgment” standard that typically governs a debtor’s § 363(b) motion never came into play for the Coalition’s motion.
• The court did not need to decide whether paying the Coalition’s fees would have been a sound business decision for the Debtors; the threshold hurdle was that only the trustee/debtor may ask the court to approve such a use of estate property.

3. Relation to Derivative Standing Doctrine

Some courts allow creditors or committees to pursue certain causes of action “derivatively” on behalf of the estate when the debtor unjustifiably refuses to act. The opinion does not explicitly address derivative standing, but its reasoning strongly suggests:

• Whatever space derivative standing occupies (e.g., in avoidance actions), it does not extend to allowing a creditor to directly invoke § 363(b) to compel payment of its own professionals.
• Using § 363(b) in that way would effectively circumvent the targeted and stricter framework of § 503(b) for reimbursing creditor expenses.

In effect, the court ensures that the carefully drawn fee‑reimbursement regime of § 503(b) cannot be end‑run by re‑labeling a creditor’s reimbursement request as a “business judgment” use of estate property under § 363(b).

C. The “Substantial Contribution” Standard Under § 503(b)

1. Baseline: Parties Bear Their Own Fees

The Supreme Court in Baker Botts L.L.P. v. ASARCO LLC, 576 U.S. 121 (2015), re‑affirmed the American Rule: each party pays its own attorneys’ fees absent a specific statutory or contractual transfer of that burden. In bankruptcy:

• Estate‑employed professionals (e.g., debtor’s counsel, official committee counsel) have a statutory entitlement to compensation from the estate under §§ 327, 328, 330, and 1103.
• Creditors and ad hoc groups, by default, do not. Their professionals are typically paid by the creditor clients themselves, whether on hourly, fixed, or contingency arrangements.

Section 503(b)(3)(D), with its companion § 503(b)(4), carves out a narrow exception. It authorizes reimbursement of:

• “the actual, necessary expenses” incurred by a creditor (or committee) “in making a substantial contribution in a case under chapter 9 or 11;” and
• “reasonable compensation for professional services” related to that substantial contribution.

As the Third Circuit stated in Lebron v. Mechem Financial Inc., this is a deliberate “accommodation between the twin objectives of encouraging meaningful creditor participation in the reorganization process and keeping fees and administrative expenses at a minimum so as to preserve as much of the estate as possible for the creditors.”

2. The Third Circuit’s Substantial Contribution Framework

In Lebron and subsequent cases (e.g., In re Grasso, 519 B.R. 137 (Bankr. E.D. Pa. 2014)), courts in the Third Circuit have articulated a demanding test. The core elements are:

1. Actual, demonstrable benefit to the estate: The creditor’s actions must tangibly improve the outcome for the estate and its creditors—not merely its own constituency.
2. Benefit must be more than incidental to self‑interest: All creditor activity carries some self‑interest, but the estate benefit must “transcend self‑protection.”
3. No unwarranted duplication: If the work largely duplicates efforts of the debtor, an official committee, or other fiduciaries, it is unlikely to count as a substantial contribution.
4. Work would not have been undertaken absent possible reimbursement: If market incentives (e.g., contingency fees, litigation posture) would have led the creditor to incur those costs regardless, reimbursement is disfavored.

Bankruptcy courts are given substantial deference in applying these standards; the “substantial contribution” inquiry is “one of fact,” and the bankruptcy judge is “in the best position” to assess it. On appeal, those factual findings are reviewed only for clear error.

3. Application to the Coalition’s Activities

The Coalition advanced a sweeping narrative:

• It claimed to have taken a “lead role” in negotiating with local councils and major insurers like Hartford and Century;
• It argued that its strategy—aiming for a global settlement—helped preserve the Debtors as going concerns and avoid a value‑destructive liquidation; and
• It asserted that without its efforts, survivors would have been worse off, and the global settlement trust (ultimately $2.4 billion) might have been smaller.

But the Bankruptcy Court found, and the Third Circuit agreed, that the detailed fee records and the broader record undercut this narrative in several ways.

(a) Primarily Self‑Interested Work

The court accepted that the Coalition was engaged and influential. But it emphasized that § 503(b) is not a reward for “being important” in the case; it is a reimbursement regime for estate‑benefiting contributions that go beyond what a self‑interested party would ordinarily do. Several points were decisive:

• The Coalition’s strategy was plainly aligned with maximizing survivors’ recoveries—and thus contingency fees for their counsel. That is legitimate, but it is also self‑interested.
• The panel found no persuasive evidence that the Coalition had, for example, sacrificed survivors’ interests to preserve overall estate value, or taken steps obviously contrary to its own economic self‑interest for the estate’s sake.
• The Coalition’s assertion that it could have earned more in state‑court litigation, yet chose the bankruptcy path to help the Debtors, was deemed speculative and unsupported by the record.

In short, the Coalition failed to overcome the presumption that creditors act in their own interest and failed to show that its efforts truly “transcended” self‑protection.

(b) Inclusion of Purely Private Benefits in the Fee Request

The Coalition’s Verified Fee Statements contained numerous entries for tasks with obviously no estate‑wide benefit, including:

• Advertising programs intended to generate new clients for state‑court firms;
• Work opposing insurers’ discovery on survivors and their counsel, which primarily protected those clients and lawyers from intrusion.

The Coalition did not meaningfully scrub its request to exclude such items, nor did it rigorously distinguish between:

• Work arguably benefitting the estate as a whole (e.g., multi‑party settlement negotiations); and
• Work benefitting the Coalition’s own institutional and economic goals.

This lack of precision was fatal. Under § 503(b), a creditor must show that the “actual, necessary expenses” it seeks to recover were incurred in making a substantial contribution. Fees for private benefits are not reimbursable.

(c) Duplicative Efforts and “Soup‑to‑Nuts” Participation

The Third Circuit accepted the Bankruptcy Court’s characterization of the Coalition’s approach as “soup to nuts”: it attempted to participate in virtually every aspect of the case much like an official committee.

However, the Code already provides for:

• A TCC representing sexual‑abuse creditors; and
• Other estate‑compensated fiduciaries (FCR, trade committee, etc.).

Courts in Delaware and the Third Circuit have repeatedly held that simply:

• Participating in negotiations,
• Encouraging compromise,
• Reviewing documents, or
• Taking discovery positions

are routine functions for parties in interest in Chapter 11 and, without more, do not justify “substantial contribution” status. The panel cites:

• In re RS Legacy Corp., 2016 WL 1084400 (Bankr. D. Del. Mar. 17, 2016);
• In re KiOR, Inc., 567 B.R. 451 (D. Del. 2017);
• In re Worldwide Direct, Inc., 334 B.R. 112 (Bankr. D. Del. 2005).

Those cases uniformly reject substantial contribution claims grounded merely in “extensive participation” or in being an active negotiator.

The presence of other key players (TCC, FCR, local councils, insurers) further undercut the notion that the Coalition’s participation uniquely generated the settlements. The court noted that declarations from the FCR and his counsel confirmed that multiple parties contributed to negotiation progress.

(d) Expectation of Reimbursement and Prior Representations

The court found an additional, practical indicator that the Coalition expected to bear its own costs:

• State‑court counsel had contingency fee arrangements that gave them enormous upside if the Settlement Trust grew.
• The $2.4 billion trust itself created strong incentives to invest in professional support, even if those expenses were never reimbursed by the estate.
• The Coalition and its counsel explicitly told their clients and the Bankruptcy Court that the Coalition’s professional fees would not be charged back to survivors.

Viewed together, these factors supported the Bankruptcy Court’s finding that the Coalition likely would have engaged professionals even “absent an expectation of reimbursement,” making its activities ineligible for § 503(b)(3)(D) relief under the Lebron approach.

D. Precedents Cited and Their Influence

The opinion’s legal reasoning is anchored in a cross‑section of Supreme Court and Third Circuit authority:

• Hartford Underwriters Ins. Co. v. Union Planters Bank: Establishes that “the trustee may” language is exclusive, not permissive, for creditors.
• Monsalvo v. Bondi: Reinforces the presumption of consistent usage of identical phrases within a statutory scheme.
• In re FTX Trading Ltd., 91 F.4th 148 (3d Cir. 2024): Invoked for the principle that statutory interpretation starts with the ordinary meaning of the text; if clear and not absurd, courts must apply it as written.
• Lebron v. Mechem Financial Inc.: Supplies the Third Circuit’s controlling framework for substantial contribution claims, emphasizing the narrowness of the exception and the need to transcend self‑interest.
• Baker Botts L.L.P. v. ASARCO LLC: Reaffirms the American Rule and the need for express statutory authorization before shifting fees.
• Bullard v. Blue Hill Bank and In re Westinghouse Sec. Litig.: Applied to define when bankruptcy orders are final and how interlocutory orders merge into confirmation.
• In re Nortel Networks, Inc. and In re Trans World Airlines, Inc.: Provide the appellate standard‑of‑review framework (de novo for law, clear error for fact, abuse of discretion where relevant).
• Delaware bankruptcy decisions (RS Legacy, KiOR, Worldwide Direct, Grasso): Supply consistent lower‑court authority that routine participation, negotiations, and duplicative efforts do not satisfy the substantial contribution test.

Collectively, these authorities support a rigorously textual and parsimonious approach to expanding fee‑shifting in bankruptcy.

E. Impact and Practical Implications

1. For Ad Hoc Creditor Groups in Mass‑Tort Chapter 11 Cases

The Boy Scouts case is emblematic of modern mass‑tort bankruptcies (e.g., diocesan abuse cases, asbestos, opioids, talc), which often feature:

• Official victim committees; and
• Multiple ad hoc coalitions formed by leading plaintiffs’ firms with divergent strategies.

This decision sends a clear message to such coalitions:

• You cannot directly invoke § 363(b) to have the estate pay your professionals. Only the debtor/trustee may do so.
• Your primary route to reimbursement is via § 503(b), which is highly restrictive and fact‑intensive.
• Building a record of unique, non‑duplicative contributions that significantly benefit the estate as a whole—not just your clients—is essential.
• You must carefully curate fee applications to segregate estate‑benefiting work from purely private advocacy or client‑development activities.

Absent such showing, ad hoc groups must expect to internalize their professional costs as part of their litigation and negotiation strategy.

2. For Plan Drafting and RSAs

The Boy Scouts decision also has consequences for:

• Restructuring Support Agreements that promise fee reimbursement to supporting creditor groups; and
• Plan provisions that contemplate post‑effective‑date payment of such fees “subject to court approval.”

Key takeaways:

• RSAs and plans cannot themselves override the Bankruptcy Code’s allocation of who may invoke § 363(b) or the strict criteria of § 503(b).
• Drafting a plan that contemplates possible payment does not guarantee approval; it merely preserves the question for later adjudication under the correct statutory standards.
• Debtors who genuinely believe that paying an ad hoc group’s professionals is necessary may need to:
  • Ensure they themselves bring a § 363(b) motion (if appropriate and defensible); and
  • Develop a robust business‑judgment record explaining why the payment benefits all creditors and the estate.

3. For Professional Fee Risk Allocation and Client Communications

The case also highlights the importance of fee risk disclosures in mass‑tort representations:

• The Coalition and state‑court counsel assured survivors that Coalition professional fees would not reduce their recoveries, signaling that counsel expected to absorb those costs (perhaps out of contingency fees).
• Later, the Coalition sought to shift those fees to the estate, effectively contradicting those earlier assurances.

While the Third Circuit does not frame this as an ethical violation, it does treat those representations as strong evidence on the “expectation of reimbursement” factor, cutting against a finding of substantial contribution. Future coalitions will need to:

• Align their client communications with a realistic assessment of whether fee reimbursement is likely; and
• Recognize that optimistic assumptions about future § 503(b) awards are legally risky.

4. For Litigation Strategy and Appellate Preservation

Finally, the jurisdictional discussion functions as a cautionary tale about timing:

• Key interim rulings affecting fees, RSAs, or settlements may become unreviewable if they are not timely appealed as part of plan confirmation.
• Parties must track how interlocutory orders merge into final orders and preserve issues accordingly.

Practitioners should consider:

• Seeking explicit separation of certain matters from confirmation when appropriate (e.g., via separate final orders or Rule 54(b) certifications in adversary proceedings); and
• Filing protective appeals of confirmation where fee‑reimbursement rights are at stake, even if post‑confirmation motions are contemplated.

V. Simplifying Key Legal Concepts

A. Debtor in Possession and the Trustee’s Powers

In Chapter 11, no trustee is usually appointed at the outset. Instead, the debtor remains in control of its assets and operations and becomes a debtor in possession (“DIP”). Under §§ 1107 and 1108, the DIP has the same rights and duties as a trustee, including:

• Operating the business;
• Using, selling, or leasing estate property under § 363; and
• Proposing a reorganization plan.

But these powers belong to the estate’s fiduciary (trustee or DIP), not to individual creditors.

B. Section 363(b): Use of Estate Property Outside the Ordinary Course

Section 363 distinguishes:

• Ordinary course transactions (§ 363(c)), which the trustee/DIP can do without court approval; and
• Non‑ordinary course transactions (§ 363(b)), which require notice, a hearing, and often court approval based on the “business judgment” standard.

Paying large sums to a specific creditor group’s professionals is not an ordinary operating expense. It is only the trustee/DIP that can seek court approval to use estate assets in this way, and only if that use is shown to benefit the estate overall.

C. Section 503(b) and “Administrative Expenses”

Administrative expenses are costs that must be paid ahead of general unsecured creditors, because they are incurred to administer the estate and preserve its value (e.g., trustee, debtor’s counsel, U.S. Trustee fees, some post‑petition trade claims).

Section 503(b)(3)(D) allows certain creditors, committees, or equity holders to have:

• Their “actual, necessary expenses” reimbursed, and
• Their professionals’ fees paid,

if they made a “substantial contribution” in Chapter 9 or 11. This is meant to encourage helpful participation without opening the floodgates to fee claims by every active party.

D. “Substantial Contribution” in Plain Terms

A “substantial contribution” is not:

• Just showing up to hearings;
• Filing objections;
• Negotiating harder for your own clients; or
• Being vocal and influential.

Instead, it means:

• You did something that materially improved the overall case for all creditors (or at least a broad class),
• In a way that would not have happened otherwise, and
• You bore expenses that were truly necessary to produce that estate‑wide benefit.

E. Merger of Interlocutory Orders and Appeal Deadlines

In bankruptcy, many decisions are interim or interlocutory. When the court later enters a final order—like plan confirmation—earlier non‑final orders on related issues:

• “Merge” into the final order; and
• Can only be challenged via a timely appeal of that final order.

Missing the 14‑day appeal deadline for confirmation generally forecloses appellate review of all those merged interlocutory rulings, as happened here with the earlier § 363(b) fee decisions.

VI. Conclusion

Although technically non‑precedential, the Third Circuit’s decision in the Boy Scouts fee dispute performs three important functions in the evolving law of complex Chapter 11 practice:

1. It reaffirms, in a straightforward textualist way, that only the trustee or debtor in possession may invoke § 363(b). Creditors and ad hoc coalitions cannot use § 363(b) as a back‑door route to obtain payment of their professionals’ fees.
2. It underscores the narrowness of the “substantial contribution” exception under § 503(b)(3)(D) and (4), insisting that:
   • Self‑interested, duplicative, or insufficiently filtered professional work is not reimbursable;
   • Routine participation, even if extensive, does not qualify; and
   • Creditors bear a heavy factual burden to prove that their efforts materially benefitted the estate as a whole and would not have occurred absent potential reimbursement.
3. It highlights procedural guardrails: the merger doctrine and appeal deadlines, as well as the need for clear, consistent client communications about who ultimately bears the risk of professional fees in mass‑tort coalitions.

For practitioners, the message is clear. In large Chapter 11 cases—especially those featuring competing ad hoc groups—professional fees for creditor coalitions are not automatically socialized across the estate. Unless a debtor itself seeks § 363(b) relief supported by a robust business‑judgment record, or unless a coalition can satisfy the exacting requirements of § 503(b)’s substantial contribution standard, those fees will remain a cost of doing business for the coalition and its counsel, not a shared burden of the bankruptcy estate.