                   FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

In re: IMPERIAL CREDIT INDUSTRIES,       
INC., a California corporation,
                             Debtor.


EDWARD M. WOLKOWITZ, as
Trustee for Imperial Credit                   No. 05-56073
Industries, Inc.,                              D.C. No.
                  Plaintiff-Appellant,       CV-03-08627-JVS
                  v.
FEDERAL DEPOSIT INSURANCE
CORPORATION, in its corporate
capacity,
                 Defendant-Appellee.
                                         




                              6293
6294            IN RE IMPERIAL CREDIT INDUSTRIES



In the Matter of: IMPERIAL CREDIT        
INDUSTRIES, INC., a California
corporation,
                             Debtor.


IMPERIAL CREDIT INDUSTRIES, INC.,
                            Plaintiff,
                  and
EDWARD M. WOLKOWITZ, as                       No. 06-56763
Trustee for Imperial Credit
Industries, Inc.,
        Plaintiff-counter-defendant-
                                               D.C. No.
                                             CV-03-08627-JVS
                          Appellant,            OPINION
                   v.
FDIC, in its capacity as receiver
for Southern Pacific Bank,
                 Defendant-Appellee.
FEDERAL DEPOSIT INSURANCE
CORPORATION, in its corporate
capacity,
       Defendant-counter-claimant-
                           Appellee.
                                         
        Appeal from the United States District Court
           for the Central District of California
         James V. Selna, District Judge, Presiding
                   Argued and Submitted
           February 6, 2008—Pasadena, California
                      Filed June 4, 2008
    Before: Cynthia Holcomb Hall, Susan P. Graber, and
             Marsha S. Berzon, Circuit Judges.
IN RE IMPERIAL CREDIT INDUSTRIES   6295
   Opinion by Judge Hall
6298            IN RE IMPERIAL CREDIT INDUSTRIES


                          COUNSEL

Michael H. Strub, Jr., Irell & Manella, Los Angeles, Califor-
nia, for the plaintiff-appellant.

Jaclyn C. Taner, Jennifer M. Barozie, and J. Scott Watson,
Federal Deposit Insurance Corporation, Legal Division,
Arlington, Virginia, for the defendant-appellee.


                          OPINION

HALL, Circuit Judge:

   These companion cases concern the undercapitalization and
eventual insolvency of a federally insured bank, Southern
Pacific Bank (SPB), and its holding company, Imperial Credit
Industries (Imperial). In February 2002, the Federal Deposit
Insurance Corporation (FDIC) notified SPB that it was under-
capitalized and required it to submit a capital restoration plan.
SPB submitted a capital plan as well as a guaranty from Impe-
rial that SPB would perform under the plan. SPB failed to
implement its capital plan, and the FDIC demanded that
                IN RE IMPERIAL CREDIT INDUSTRIES           6299
Imperial pay its $18,375,800 obligation under the guaranty.
Imperial, by that point in Chapter 11, asserted a number of
defenses to its obligation under the performance guaranty.
The district court rejected all of these defenses and granted
partial summary judgment in favor of the FDIC, ruling that
section 365(o) of the Bankruptcy Code required Imperial to
cure its deficit to the FDIC as a condition of remaining in
Chapter 11. On appeal from that order, Imperial’s Trustee,
Edward M. Wolkowitz (Wolkowitz or the Trustee), chal-
lenges not only whether the performance guaranty binds
Imperial with respect to SPB’s capital plan, but also whether
Imperial’s liability under the guaranty was properly calculated
and whether the performance guaranty may be avoided as a
fraudulent conveyance. We affirm the district court’s conclu-
sion that Imperial is bound by the performance guaranty and
its calculation of Imperial’s liability, but reverse and remand
the fraudulent conveyance claim for further proceedings.

   While the above appeal was pending, Imperial converted to
Chapter 7 to avoid the district court’s order that it immedi-
ately cure its deficit pursuant to 11 U.S.C. § 365(o). The
FDIC filed a counterclaim for declaratory relief in the district
court, seeking a determination of the priority of Imperial’s
obligation under the performance guaranty. The district court
granted summary judgment in favor of the FDIC, holding that
the FDIC’s claim was entitled to administrative priority status
under 11 U.S.C. § 507(a)(2). The Trustee appeals that deci-
sion as well, arguing that the FDIC’s claim is entitled only to
ninth priority under 11 U.S.C. § 507(a)(9). We agree and,
therefore, reverse the district court’s grant of summary judg-
ment in favor of the FDIC on this issue.

       I.   FACTS AND PROCEDURAL HISTORY

  In February 2002, the FDIC issued a Prompt Corrective
Action notice informing SPB that it was undercapitalized and
requiring SPB to submit a capital restoration plan by March
6300               IN RE IMPERIAL CREDIT INDUSTRIES
1, 2002, to avoid further restrictions on its activities.1 On
March 1, 2002, SPB filed a capital restoration plan (the March
1 capital plan or March 1 plan), which called for it to raise
approximately $55 million in new capital through the sale of
common equity by June 30, 2002. Pursuant to federal law, on
February 27, 2002, SPB’s holding company, Imperial, exe-
cuted a corresponding guaranty that SPB would perform
under the plan.2 The performance guaranty was attached as an
exhibit to SPB’s March 1 capital restoration plan.

   The text of the performance guaranty begins with several
recitals, including the following:

      On February 1, 2002, [SPB]’s Board of Directors
      received a Prompt Corrective Action notification let-
      ter from the [FDIC] which, among other things,
      requires [SPB] to file a written capital restoration
      plan (the ‘Capital Plan’) with the regional office of
      the [FDIC] by March 1, 2002 . . . .

      The Guaranty set forth below has been duly adopted
      at the regular meeting of the Board of Directors of
      [Imperial] held on February 27, 2002 and is intended
      to comply fully with Section 38 of the Federal
      Deposit Insurance Act and the implementing regula-
      tions thereto.

   After these recitals, the document sets forth the substantive
terms of the performance guaranty, by which Imperial com-
mits itself to:
  1
     A federally insured bank must submit an acceptable capital restoration
plan in response to a Prompt Corrective Action notice. Otherwise, the
bank becomes subject to significant restrictions on its activities. 12 U.S.C.
§ 1831o(e)(2) & (f)(1)(B)-(2).
   2
     Any company controlling an undercapitalized bank must guarantee the
performance of the bank’s capital plan. 12 U.S.C. § 1831o(e)(2)(C)(ii).
               IN RE IMPERIAL CREDIT INDUSTRIES              6301
    absolutely, unconditionally and irrevocably guaran-
    tee[ ] the performance of [SPB] under the terms of
    the Capital Plan and . . . pay the sum demanded to
    [SPB] or as directed by the [FDIC] in immediately
    available funds promptly after receipt by [Imperial]
    of such demand; provided, that the aggregate liabil-
    ity of [Imperial] under this Guaranty shall be the
    lesser of an amount equal to five percent (5%) of
    [SPB]’s total assets as of December 31, 2001 or the
    amount which is necessary or would have been nec-
    essary to restore the relevant capital measures of
    [SPB] to the levels required to be ‘adequately’ capi-
    talized, as those measures and levels are defined at
    the time that [SPB] initially fails to comply with its
    approved Capital Plan . . . .

   The FDIC did not approve the March 1 plan. SPB submit-
ted revised capital restoration plans on April 12, 2002, and
May 9, 2002, which the FDIC rejected as well. On May 24,
SPB submitted an amendment to the May 9 plan (the May 24
capital plan or May 24 plan), which proposed a capital infu-
sion of approximately $55 million by July 22, 2002, this time
through private placement and/or the sale of assets. Unlike the
March 1 plan, the plans submitted on April 12, May 9, and
May 24 did not include as an attachment any performance
guaranty by Imperial. Nonetheless, the FDIC approved the
May 24 plan.

   SPB failed to implement its capital restoration plan by the
July 22, 2002, deadline. On July 25, 2002, the FDIC issued
a second Prompt Corrective Action notice, informing SPB
that it would be subject to the restrictions imposed on a “sig-
nificantly undercapitalized institution” under 12 U.S.C.
§ 1831o(f). Both Imperial and SPB attempted to achieve a
recapitalization of SPB — with Imperial transferring $5 mil-
lion in cash to SPB on March 31, 2002, and July 31, 2002 —
but on February 7, 2003, the California Department of Finan-
cial Institutions declared SPB insolvent and appointed the
6302              IN RE IMPERIAL CREDIT INDUSTRIES
FDIC as receiver. On July 17, 2003, Imperial filed a voluntary
petition under Chapter 11 of the Bankruptcy Code, seeking to
liquidate its assets.

   On September 4, 2003, the FDIC notified Imperial that it
had failed to comply with its performance guaranty and
demanded $18,375,800 under the contract. On November 6,
2003, Imperial filed an adversary action against the FDIC in
the Bankruptcy Court for the Central District of California,
seeking to avoid the alleged obligation. The case was trans-
ferred to the District Court for the Central District of Califor-
nia, and on March 25, 2004, Imperial filed its Second
Amended Complaint, asserting eight causes of action against
the FDIC. The FDIC moved to dismiss all the claims except
the claims for declaratory relief and judgment. The district
court denied the FDIC’s motion with respect to Imperial’s
equitable subordination claim and allowed Imperial to replead
its fraudulent inducement and conveyance claims, but other-
wise granted the FDIC’s motion.3 Imperial amended its com-
plaint and repled its fraudulent conveyance claim on
November 12, 2004, but the district court once again granted
the FDIC’s motion to dismiss that claim, ruling that Imperial
had failed to plead actual fraud.

   On December 13, 2004, the FDIC moved for an order
requiring Imperial to pay its obligation under the performance
guaranty pursuant to 11 U.S.C. § 365(o), which provides that
Chapter 11 debtors must “immediately cure” any deficit owed
to a Federal depository institutions regulatory agency under a
capital maintenance commitment. The court ruled on the
FDIC’s motion on February 15, 2005. It held that if Imperial
had guaranteed SPB’s capital restoration plan, it was required
to cure any capital deficit of SPB as a condition of remaining
  3
    The court held that Imperial’s fraudulent conveyance claim was barred
by 12 U.S.C. § 1828(u) unless Imperial could plead actual fraud pursuant
to § 1828(u)(2). It allowed Imperial leave to replead those claims and
establish actual fraud.
                IN RE IMPERIAL CREDIT INDUSTRIES           6303
in Chapter 11. However, the court delayed a final ruling on
the FDIC’s motion because Imperial was entitled to present
“obligor” defenses to the contractual obligation, which had
not been fully briefed. The court found that five of Imperial’s
claims from its Second Amended Complaint were “obligor”
defenses, and granted it leave to present those. Two of Imperi-
al’s claims — its equitable subordination and fraudulent con-
veyance claims — were “trustee” defenses; the court held that
Imperial could not bring those claims until it obtained Chapter
11 trustee status by curing its deficit. Imperial’s fraudulent
conveyance claim was moot regardless of its status as a
“trustee defense,” though, because that claim had been dis-
missed on separate grounds.

   On April 4, 2004, the FDIC moved for partial summary
judgment to enforce Imperial’s deficit. On June 15, 2005, the
district court granted the motion, rejecting all five of Imperi-
al’s “obligor” defenses. The court then entered an appealable
final partial judgment for the FDIC pursuant to Federal Rule
of Civil Procedure 54(b) on July 6, 2005, ordering Imperial to
pay the sum of $18,375,800 to the FDIC within 30 days. The
court stated that if Imperial converted to Chapter 7, Imperial
would be relieved of its obligation to immediately pay
$18,375,800 to the FDIC, and that its “unsatisfied immediate
cure obligation shall have the status and priority in the Chap-
ter 7 case which it is accorded under applicable bankruptcy
law.”

   Imperial filed a notice of appeal from the district court’s
summary judgment on July 15, 2005, and unsuccessfully
sought a stay from the district court and this court. Less than
a month later, Imperial converted its case to Chapter 7,
thereby avoiding its obligation to pay the $18,375,800 imme-
diately.

   In the Chapter 7 case, the FDIC moved for a declaration
that Imperial’s cure obligation was entitled to priority admin-
istrative expense status under 11 U.S.C. § 507(a)(2). The dis-
6304            IN RE IMPERIAL CREDIT INDUSTRIES
trict court granted partial summary judgment in favor of the
FDIC on this issue on October 6, 2006. The parties stipulated
to the dismissal of all remaining claims in the action, and
judgment was entered in favor of the FDIC on November 28,
2006. Imperial’s timely appeal followed.

                      II.   DISCUSSION

   The district court’s grants of summary judgment in favor of
the FDIC are reviewed de novo, under the same standards
applied by the district court. “We must determine whether,
viewing the evidence in the light most favorable to the non-
moving party, any genuine issues of material fact exist, and
whether the district court correctly applied the relevant sub-
stantive law.” Fazio v. City and County of San Francisco, 125
F.3d 1328, 1331 (9th Cir. 1997).

   We also review de novo the district court’s dismissal of the
fraudulent conveyance claim. Adams v. Johnson, 355 F.3d
1179, 1183 (9th Cir. 2004). Dismissal is proper only “if it
appears beyond doubt that the non-movant can prove no set
of facts to support its claims.” Id.

A.     Imperial guaranteed SPB’s May 24 Capital Plan

   In its partial summary judgment ruling in favor of the
FDIC, the district court held that the performance guaranty
signed by Imperial on February 27, 2002, applied to the May
24 capital plan approved by the FDIC. On appeal, the Trustee
reiterates its argument that Imperial guaranteed only the
March 1 capital plan.

   [1] The parties agree that the ordinary rules of contract
interpretation apply to the performance guaranty under Cali-
fornia law. See Cent. Bldg., LLC v. Cooper, 26 Cal. Rptr. 3d
212, 216 (Ct. App. 2005); Cal. Civ. Code § 2837. As with any
contract, our goal is to give effect to the mutual intent of the
parties. County of San Diego v. Ace Prop. & Cas. Ins. Co.,
                IN RE IMPERIAL CREDIT INDUSTRIES           6305
118 P.3d 607, 612 (Cal. 2005) (citing Bank of the W. v. Supe-
rior Court, 833 P.2d 545, 552 (Cal. 1992). Mutual intent is
determined by “the words used in the agreement, as well as
extrinsic evidence of such objective matters as the surround-
ing circumstances under which the parties negotiated or
entered into the contract; the object, nature and subject matter
of the contract; and the subsequent conduct of the parties.”
Wolf v. Superior Court, 8 Cal. Rptr. 3d 649, 660 (Ct. App.
2004) (internal quotation mark omitted) (citing Cal. Civ. Code
§§ 1635-1656; Cal. Civ. Proc. Code §§ 1859-1861, 1864); see
also Bank of Am. Nat’l Trust & Sav. Ass’n v. Waters, 26 Cal.
Rptr. 9, 11 (Ct. App. 1962).

   Based on our examination of the language of the contract,
the circumstances surrounding its negotiation and execution,
and the subsequent conduct of the parties, we hold that the
performance guaranty is valid and enforceable with respect to
SPB’s May 24 capital plan. The guaranty must be read in con-
junction with the statute and regulations that required its exe-
cution in the first place, and such a reading necessarily leads
to the conclusion that the parties intended it to apply to the
capital plan ultimately approved by the FDIC.

   [2] The statutes governing the undercapitalization of feder-
ally insured depository institutions directed the course of
events in this case. SPB received a Prompt Corrective Action
notice from the FDIC, and was required under 12 U.S.C.
§ 1831o(e)(2) to submit a capital restoration plan to the FDIC
in order to avoid restrictions on its activities. 12 U.S.C.
§ 1831o(e)(2) & (f). Section 1831o(e)(2)(C)(ii) required
Imperial, as SPB’s holding company, to guaranty SPB’s per-
formance under the capital plan. Imperial submitted a perfor-
mance guaranty with SPB’s March 1 capital plan to comply
with the statute. The guaranty explicitly recognized its role in
SPB’s recapitalization process, stating that section 38 of the
Federal Deposit Insurance Act and the Act’s implementing
regulations require a “company that controls an undercapital-
ized bank [to] issue a performance guaranty with respect to
6306              IN RE IMPERIAL CREDIT INDUSTRIES
the company’s capital restoration plan.” See 12 U.S.C.
1831o(e)(2)(C)(ii); 12 C.F.R. § 325.104. The performance
guaranty also stated that it “intended to comply fully with
Section 38 of the Federal Deposit Insurance Act and the
implementing regulations thereto.”

   After the FDIC failed to accept SPB’s March 1 capital plan,
SPB submitted three other versions of capital restoration plans
to the FDIC over the course of a few months in an effort to
regain adequately capitalized status and avoid restrictions on
its activities. According to Imperial, during this time it
“worked diligently with SPB to comply with all FDIC direc-
tives in an effort to achieve recapitalization.”4 The FDIC
finally approved the fourth version of SPB’s capital plan,
which was submitted on May 24, with no objection from SPB
or Imperial.

   The Trustee now contends that Imperial never intended its
previously offered guaranty to apply to the May 24 version of
the capital plan. This argument not only belies the guaranty’s
promise to comply with the statutes and regulations directing
the treatment of undercapitalized banks, but also is inconsis-
tent with Imperial’s subsequent efforts to achieve SPB’s
recapitalization. The language of the performance guaranty
clearly demonstrates that Imperial intended to comply with
the statutory framework governing undercapitalized institu-
tions. Imperial was fully aware that an enforceable perfor-
mance guarantee was required in order for the FDIC to
approve SPB’s capital plan, and it worked with the FDIC and
SPB in an effort to achieve SPB’s recapitalization.

  [3] Moreover, Imperial implicitly recognized that its guar-
anty would extend to a later version of SPB’s capital plan.
The performance guaranty defined Imperial’s liability with
  4
   This quote is from Imperial’s Second Amended Complaint against the
FDIC. Imperial now seems to deny any efforts to obtain the FDIC’s
approval of the May 24 capital plan, but the complaint suggests otherwise.
                   IN RE IMPERIAL CREDIT INDUSTRIES                   6307
reference to the “approved” capital plan, rather than the
March 1 capital plan, and it fixed a maximum amount of lia-
bility at 5% of SPB’s assets on December 31, 2001, regardless
of the form the approved plan ultimately took. Thus, the
Trustee cannot successfully argue that Imperial never
intended to guaranty the May 24 plan.

   The Trustee’s arguments to the contrary fail to persuade us.
For example, Wolkowitz argues that a “plain reading” of the
performance guaranty demands the result that the guaranty
only applied to the March 1 plan because the words “March
1, 2002” appear after the term “Capital Plan” in the guaranty.
However, the words “March 1, 2002” are part of an earlier
descriptive sentence, and not part of the substantive terms of
the guaranty itself. The substantive terms of the guaranty
apply to the “approved capital plan” without limitation.

   Wolkowitz also contends that the guaranty never became
an operative contract because it was submitted to the FDIC
only as part of the March 1 capital plan, which the FDIC did
not accept. This argument also fails. The rejection of the
March 1 capital plan by the FDIC did not apply to the perfor-
mance guaranty, which explicitly extended to the “approved
Capital Plan” and not the March 1 plan specifically. More-
over, absolute guaranties are binding without notice of accep-
tance in California.5 See Cal. Civ. Code § 2795; Kierulff &
Ravenscroft v. Koping, 94 Cal. App. 473, 475 (Dist. Ct. App.
1928) (“Section 2795 of the Civil Code, changes the rule
announced in many cases, and provides that an absolute guar-
anty is binding upon the guarantor without notice of accep-
tance.”).6 The Trustee’s remaining arguments, which focus on
  5
     Imperial promised to “absolutely, unconditionally, and irrevocably
guarantee[ ] the performance of [SPB].”
   6
     Although California Civil Code section 2795 refers to sureties rather
than guarantors, California law equates the two. See Cal. Civ. Code § 2787
(“The distinction between sureties and guarantors is hereby abolished. . . .
A surety or guarantor is one who promises to answer for the debt, default,
or miscarriage of another . . . .”).
6308               IN RE IMPERIAL CREDIT INDUSTRIES
two pieces of extrinsic evidence in the record, also fail to con-
vince us that the parties did not intend the guaranty to apply
to the May 24 capital plan.7

   [4] In sum, we hold that the performance guaranty applies
to the May 24 capital plan and affirm the district court’s grant
of summary judgment on this issue.

B. The district court properly calculated the amount of the
performance guaranty

   The district court adopted the FDIC’s calculation of Imperi-
al’s deficit under the performance guaranty at $18,375,800.
The Trustee argues 1) that the district court erred in relying
on SPB’s June 30, 2002 Call report data, because the guaranty
required any liability be calculated as of July 22, 2002; and
2) that a $5 million payment it made to SPB on July 30, 2002,
should reduce any liability under the guaranty.
  7
    For example, the Trustee cites a Material Loss Review describing
SPB’s bankruptcy, which was prepared by the FDIC Office of Inspector
General. The document includes a chronology of events, and the entry for
May 24, 2002, states that “[the] FDIC accepts SPB’s revised [May 24]
capital plan . . . [Imperial] is to sign a performance guaranty for ensuring
the capital plan is pursued and realized.” This one line in a report on
SPB’s financial failure does not, as the Trustee argues, prove that the
FDIC believed that the performance guaranty did not apply to the May 24
plan, especially when viewed in light of the FDIC’s continuous negotia-
tions with SPB in an effort to come to an agreement on an appropriate cap-
ital restoration plan.
   The Trustee also cites a letter from the FDIC to SPB in February of
2003, in which the FDIC notified SPB that it had rejected a November
2002 capital plan that SPB had submitted. In the letter, the FDIC informed
SPB that it should submit a revised capital plan, and include a perfor-
mance guaranty from Imperial. This evidence does not bear on Imperial’s
guaranty of the May 24 plan, because the November 2002 plan was in
response to a new Prompt Corrective Action notice issued after SPB failed
to comply with the May 24 capital plan, not the same February 2002
Prompt Corrective Action notice that led to the development of the March
1 and May 24 capital plans.
                 IN RE IMPERIAL CREDIT INDUSTRIES              6309
  1.   Use of June 30, 2002 Call Report Data

  The Trustee contests the district court’s calculation as
improperly relying on SPB’s June 30 Call report data. He
argues that the plain language of the guaranty required the
FDIC to calculate the amount of the obligation as of July 22,
2002. The FDIC counters that neither the performance guar-
anty nor the regulation it recites dictates the source from
which the FDIC must draw its data, and therefore the district
court properly held that the FDIC’s use of the June 30, 2002
data was entitled to administrative deference.

   The performance guaranty, in language nearly identical to
the FDIC regulation, 12 C.F.R. § 325.104(h)(1)(i)(B), limited
Imperial’s liability to the lesser of 5% of SPB’s assets as of
December 31, 2001, or the amount necessary to restore SPB’s
relevant capital measures to the levels required for SPB to be
adequately capitalized, “as those capital measures and levels
are defined at the time that [SPB] initially fails to comply
with its approved Capital Plan.” It is undisputed that SPB ini-
tially failed to comply with the May 24 plan on July 22, 2002,
the deadline by which it was to have raised $55 million.
Accordingly, Wolkowitz argues that any liability on Imperi-
al’s part should have been calculated as of July 22, 2002.8

   [5] As the FDIC argues, the Trustee conflates the words
“defined” and “calculated.” The performance guaranty and
the regulation in question simply state that the definitions of
the capital measures and levels based upon which the FDIC
measures a bank’s liability must be those in place at the time
of the bank’s failure. Neither the performance guaranty nor
the regulation says anything about how Imperial’s liability
should be calculated, nor states that the calculation must occur
as of the date SPB fails to comply with the plan.
  8
  The parties agree that 5% of SPB’s assets as of December 31, 2001,
would be more than the amount necessary to adequately capitalize SPB
when it failed to comply with its capital plan.
6310               IN RE IMPERIAL CREDIT INDUSTRIES
   [6] As a result, the district court correctly held that the per-
formance guaranty and the corresponding regulation failed to
clearly define how Imperial’s obligation should be calculated.
Finding the contract and the identical regulation ambiguous,
the district court granted deference to the FDIC’s reasonable
interpretation of its own regulation as authorizing it to calcu-
late Imperial’s obligation based on SPB’s June 30, 2002 call
report — the latest data in its possession. See Chevron U.S.A.,
Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43
(1984).

   [7] The Trustee attacks the district court’s deference to the
FDIC’s interpretation on a number of fronts, but we find his
arguments unpersuasive. For example, the Trustee argues that
because the performance guaranty was a contract, and not a
regulation, agency deference was inappropriate. Though we
have held that deference is not appropriate solely because “the
contract signed by the parties contains the same language as
[a statute],” Clay Tower Apts v. Kemp, 978 F.2d 478, 480 (9th
Cir. 1992), we agree with the district court that deference is
proper here, because the agreement in question “stemmed
from and was designed to resolve an ongoing proceeding” and
included “intrinsically regulatory” terms of a type that the
agency “frequently employs its expertise in reviewing,” MCI
Telecomms. Corp. v. F.C.C., 822 F.2d 80, 84-85 (D.C. Cir.
1987).9

   Wolkowitz next contends that deference is inappropriate
because the FDIC stands to benefit from its own interpreta-
tion. See Chikaloon-Moose Creek Native Ass’n v. Norton, 360
F.3d 972, 980 (9th Cir. 2004). However, the FDIC does not
necessarily stand to gain if deficits are calculated by reference
to banks’ call reports, even if it did so here. In fact, it is
  9
    This case law also forecloses the Trustee’s argument that deference to
any agency interpretation is appropriate only when the subject matter of
the statute or regulation is technical, complex, or outside the realm of judi-
cial expertise.
                  IN RE IMPERIAL CREDIT INDUSTRIES                   6311
unclear whether Imperial’s obligation would increase or
decrease if the calculation date were changed to July 22.

    [8] The Trustee’s last argument is that even if the FDIC had
nothing to gain from its interpretation of the regulation, its
position in litigation is still not entitled to deference because
it is unsupported by a regulation, ruling, or established admin-
istrative practice. However, Smiley v. Citibank, N.A., 517 U.S.
735 (1996), only forbids deference to “agency litigating posi-
tions that are wholly unsupported by regulations, rulings, or
administrative practice.” Id. at 741 (internal quotation marks
omitted). The FDIC is certainly not litigating a wholly unsup-
ported position here. The FDIC’s reliance on quarterly bank
Call reports is established in its regulations and its administra-
tive practice. Several federal regulations require federally
insured banks to file quarterly Call reports to the federal bank-
ing agencies, see, e.g., 12 U.S.C. §§ 161, 248(a), 1817(a), and
those agencies, including the FDIC, consistently rely on that
data for a variety of regulatory purposes, see, e.g., 12 C.F.R.
§§ 1.4, 3.2, 8.2, 362.3(a)(2)(iii)(C), 303.14(c). For example,
the FDIC relies on Call reports in determining the capital
level of a bank, 12 C.F.R. § 6.2(j) (bank’s total assets defined
by information in Call report), in determining the date of a
bank’s effective capital category, 12 C.F.R. §§ 325.102, 6.3,
and in approving or disapproving capital restoration plans, 12
C.F.R. § 208.44(b) (capital restoration plans must be prepared
in accordance with instructions on the Call report). Thus, the
FDIC’s calculation of Imperial’s liability as of SPB’s latest
Call report data is supported by its general practice of relying
on Call reports for regulatory purposes.10
  10
     The Trustee also argues that the FDIC’s practice of using Call reports
is contradicted by an internal memo which states that a deficit calculation
“cannot and is not made until the bank initially fails to comply with the
capital restoration plan.” But the memo, like 12 C.F.R.
§ 325.104(h)(1)(B), merely addresses when the limit of liability is to be
measured, not what data are to be used in the calculation.
6312              IN RE IMPERIAL CREDIT INDUSTRIES
  [9] In light of the above, we affirm the district court’s cal-
culation of Imperial’s liability under performance guaranty
using SPB’s June 30, 2002 Call report data.

  2.   Credit for $5 million post-guaranty payment

   The district court held that a $5 million transfer Imperial
made to SPB on July 31, 2002, could not reduce Imperial’s
liability under the performance guaranty because the contract
stated that Imperial’s liability could not be “released, dis-
charged, or in any way affected by any circumstance, condi-
tion, or matter . . . including (v) any counterclaim, set-off,
deduction or defense [Imperial] may have against [SPB].”
The Trustee contends that the $5 million payment was not a
“set-off or deduction” but a partial payment towards its liabil-
ity. He also argues that if the $5 million payment to SPB is
a barred “deduction,” then no payment could ever reduce its
liability under the guaranty.

   [10] We disagree. The $5 million payment to SPB clearly
meets the definition of a deduction, which the Trustee himself
defines as “an act of taking away” or “something that can be
subtracted.” WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY
589 (2002). Moreover, just because this $5 million transfer to
SPB does not reduce Imperial’s liability does not mean that
no payment could reduce its liability. Had Imperial made a
payment to SPB upon “demand” by the FDIC or “as directed”
by the agency, as required by the language of the guaranty,
the payment should have been properly credited toward its lia-
bility.11 However, it is entirely implausible that Imperial
intended a $5 million payment made to SPB in July of 2002
to reduce its obligation to the FDIC when the FDIC did not
demand payment until September 2003, and Imperial was
allegedly unaware of any obligation until the FDIC’s demand.
  11
   The guaranty stated that “[Imperial] will pay the sum demanded to the
Company or as directed by the [FDIC] in immediately available funds
promptly after receipt . . . of such demand.”
                  IN RE IMPERIAL CREDIT INDUSTRIES                   6313
Therefore, we affirm the district court’s calculation of Imperi-
al’s deficit at $18,375,800.

C. The district court erred in dismissing the fraudulent
conveyance claim

   In the district court, Imperial sought to avoid any obligation
created by the performance guaranty as a constructive fraudu-
lent conveyance under 11 U.S.C. § 548. The district court dis-
missed this claim as barred by 12 U.S.C. § 1828(u)(1) unless
Imperial could plead actual fraud, which it was unable to do.
Imperial argues that this decision was based on an erroneous
interpretation of § 1828(u) and asks the panel to reinstate its
fraudulent conveyance claim. The FDIC requests the panel
affirm the district court because the fraudulent conveyance
claim was a “trustee defense,” and so was barred by 11 U.S.C.
§ 365(o). In the alternative, the FDIC argues that the district
court properly interpreted 12 U.S.C. § 1828(u).12

  1. The fraudulent conveyance claim’s status as a trustee
  defense

   In its February 15, 2005, order, the district court held that
Imperial could not exercise its powers as a trustee without
first curing its deficit to the FDIC under § 365(o). The district
court held that Imperial’s fraudulent conveyance claim was a
“trustee defense” made on behalf of its creditors, and that
Imperial, therefore, could not litigate that defense until it
cured its obligation to the FDIC. However, the court did not
dismiss the fraudulent conveyance claim for that reason, as it
  12
    We have jurisdiction to hear this claim even though the Trustee’s
fraudulent conveyance claim is an appeal from the district court’s August
4, 2004 and February 14, 2005 orders, which were not appealable in their
own right when the briefs were filed. “[O]rders adjudicating only some of
the claims may be treated as final orders if the remaining claims have sub-
sequently been finalized,” Anderson v. Allstate Ins.Co., 630 F.2d 677, 680
(9th Cir. 1980). In this case, a final judgment was ordered on November
28, 2006, disposing of all the claims between the parties.
6314           IN RE IMPERIAL CREDIT INDUSTRIES
had already dismissed the claim as barred by § 1828(u). The
FDIC urges the panel to affirm the district court’s dismissal
of the fraudulent conveyance claim because Imperial was
barred from bringing it in the first place as a “trustee
defense.”

   [11] We decline to affirm on that basis. Section 365(o)
requires immediate cure of a deficit to a federal depository
institution under a performance guaranty only when the
debtor is in Chapter 11. A Chapter 7 debtor is under no obli-
gation to immediately cure such a deficit. Accordingly, the
district court’s holding that Imperial could not bring “trustee
defenses” until it cured its deficit under § 365(o) necessarily
applies only to debtors in Chapter 11, not debtors in Chapter
7 like Imperial. Although the district court need not have
reached the question whether the fraudulent conveyance claim
survived dismissal in the Chapter 11 proceeding, it did in fact
dismiss the claim as barred by § 1828(u). Now that Imperial
is in Chapter 7, we cannot affirm its dismissal of the fraudu-
lent conveyance claim on the separate ground that it was a
barred “trustee defense” in Chapter 11. That question is moot,
and Imperial’s fraudulent conveyance defense is viable now,
unless precluded by § 1828(u).

  2.   Section 1828(u) and the Fraudulent Conveyance Claim

   Because we cannot affirm the dismissal of the fraudulent
conveyance claim as a barred “trustee defense,” we address
the Trustee’s argument that the district court erroneously dis-
missed its fraudulent conveyance claim as barred by 12
U.S.C. § 1828(u). Wolkowitz argues that the statute prohibits
persons from bringing only fraudulent conveyance claims
regarding a transfer of assets and thus does not bar Imperial’s
claim requesting the voiding of an obligation under a perfor-
mance guaranty. The district court rejected this argument
below, holding that Imperial’s argument was based on an “un-
supported distinction between assets and obligations.”
                      IN RE IMPERIAL CREDIT INDUSTRIES                     6315
    [12] To the contrary, we find that the distinction between
assets and obligations is supported by the plain language of
the statute and the legislative history. On its face, § 1828(u)13
prohibits persons from bringing fraudulent conveyance claims
against federal banking agencies only for “the return of assets
. . . transferred to” a federally insured bank or “for monetary
damages or other legal or equitable relief in connection with
such transfer,” if the transfer was made when the insured bank
was undercapitalized. The statute makes no mention of obli-
gations, which is what Imperial is attempting to avoid as a
fraudulent conveyance.14

   Moreover, the House Conference Report reveals that the
purpose of § 1828(u) is to protect the federal deposit insur-
ance funds from claims brought by the bankruptcy trustee of
a depository institution holding company “for the return of
capital infusions,” not for the avoidance of obligations. H.R.
Rep. No. 106-434, at 183 (1999) (Conf. Rep.), reprinted in
1999 U.S.C.C.A.N. 245, 276. And related statutes addressing
fraudulent conveyances recognize the distinction between
avoiding an obligation and recovering a transfer, suggesting
that Congress intentionally omitted obligations from
  13
    The statute provides that:
       No person may bring a claim against any Federal banking agency
       . . . for the return of assets of . . . [a] controlling shareholder of
       the insured depository institution transferred to, or for the benefit
       of, an insured depository institution by such . . . controlling
       shareholder of the insured depository institution, or a claim
       against such Federal banking agency for monetary damages or
       other legal or equitable relief in connection with such transfer, if
       at the time of the transfer [the insured institution was undercapi-
       talized].
12 U.S.C. § 1828(u)(1); see also id. § 1828(u)(2)(A) (for purposes of
§ 1828(u)(1), the term “claim” includes a cause of action providing for
avoidance of fraudulent conveyances).
   14
      Note that any payments under the guaranty would clearly constitute a
“transfer of assets” and therefore § 1828(u) would bar the Trustee from
arguing that they were fraudulent conveyances.
6316            IN RE IMPERIAL CREDIT INDUSTRIES
§ 1828(u). Compare 12 U.S.C. § 1821(d)(17)(A) (“The Cor-
poration . . . may avoid a transfer of any interest of an
institution-affiliated party . . . or any obligation incurred by
such party or person . . . .”) with 12 U.S.C. § 1828(u) (only
barring claims based on transfers of assets); see Barnhart v.
Sigmon Coal Co., 534 U.S. 438, 452 (2002) (“[W]hen ‘Con-
gress includes particular language in one section of a statute
but omits it in another section of the same Act, it is generally
presumed that Congress acts intentionally and purposely in
the disparate inclusion or exclusion.’ ” (quotation source
omitted)). Academic articles also have clarified that a guar-
anty is not equivalent to a transfer. See Phillip I. Blumberg,
Intragroup Guaranties Under the Uniform Fraudulent Trans-
fer Act, 9 CARDOZO L. REV. 685, 703 (1987) (“With the issu-
ance of a guaranty, the guarantor incurs an obligation, but no
transfer takes place. A transfer takes place only when the
guarantor or some other party makes a payment in reduction
of the indebtedness that has been guaranteed. Thus, it is clear
that the issuance of a guaranty is not included in [a statute
barring transfers] although payments pursuant to the guaranty
are, of course, included.” (footnote omitted)).

   [13] The FDIC is unable to effectively rebut our reading of
§ 1828(u) as barring only claims based on transfers of assets.
It attempts to argue that the term “asset” in § 1828(u) should
be defined broadly as “something of value,” but fails to sup-
port its interpretation with any statutory text, legislative his-
tory or case law. The FDIC also puts forth a policy argument,
contending that if § 1828(u) is limited to transfers of assets,
then it will render performance guaranties effectively unen-
forceable against insolvent parent companies of federally
insured banks. This argument is flawed, though, because it
assumes that if the Trustee’s fraudulent conveyance claim sur-
vived dismissal, it would necessarily prevail on the merits,
when the next step would be for a court to determine whether
the performance guaranty represented a fraudulent convey-
ance that could be avoided under 11 U.S.C. § 548.
                IN RE IMPERIAL CREDIT INDUSTRIES            6317
   [14] In light of the above, we reverse the district court’s
dismissal of the fraudulent conveyance claim as barred by
§ 1828(u), and remand for further proceedings.

D. The FDIC’s claim is entitled to only ninth priority in the
Chapter 7 proceeding

   [15] The district court held that Imperial owed the FDIC
$18,375,800 based on its obligation under the performance
guaranty. Per 11 U.S.C. § 365(o), which mandates immediate
payment of deficits to federal depository institutions, the court
ordered Imperial to cure its deficit as a condition of remaining
in Chapter 11. Alternatively, the court noted that Imperial
could convert to Chapter 7, in which case its “unsatisfied cure
obligation [would] have the status and priority in the Chapter
7 case which it is accorded under applicable bankruptcy law.”
Imperial converted to Chapter 7, and litigation over the status
of the FDIC’s claim ensued. The district court determined that
the FDIC’s claim was entitled to administrative priority in the
Chapter 7 case under 11 U.S.C. § 507(a)(2). The Trustee
argues that §§ 365(o) and 507 of the Bankruptcy Code rele-
gate the FDIC’s claim to ninth priority. The FDIC argues that
the district court correctly accorded its claim administrative
priority. The priority of a claim arising from an uncured defi-
cit under § 365(o) is an issue of first impression.

   [16] Section 365(o) was enacted as part of the Comprehen-
sive Thrift and Bank Fraud Prosecution and Taxpayer Recov-
ery Act of 1990, which constitutes Title XXV of the Crime
Control Act of 1990, Pub. L. No. 101-647, § 2522, 104 Stat.
4859, 4866. As part of its response to the savings and loan cri-
sis, Congress sought to prevent parties affiliated with federal
depository institutions from “using bankruptcy to evade com-
mitments to maintain capital reserve requirements of a Feder-
ally insured depository institution.” H.R. Rep. No. 681(I), at
179 (1990), reprinted in 1990 U.S.C.C.A.N. 6472, 6585; Res-
olution Trust Corp. v. Firstcorp., Inc. (In re Firstcorp, Inc.),
973 F.2d 243, 246 (4th Cir. 1992). Section 365(o) accom-
6318              IN RE IMPERIAL CREDIT INDUSTRIES
plished this goal by taking away a trustee’s ordinary power to
avoid a debtor’s executory contracts under § 365(a).15 Id. at
180, reprinted in 1990 U.S.C.C.A.N. 6472, 6586. The statute
provides that “[i]n a case under chapter 11 of this title, the
trustee shall be deemed to have assumed (consistent with the
debtor’s other obligations under section 507), and shall imme-
diately cure any deficit under, any commitment by the debtor
to a Federal depository institutions regulatory agency.” 11
U.S.C. § 365(o). This “assumption and cure” mechanism has
been interpreted to require a trustee to immediately pay any
deficit to a federal depository institution as a condition of
remaining in Chapter 11. Firstcorp, 973 F.2d at 247. “If a
debtor cannot ‘immediately’ cure a deficit under a capital
maintenance commitment that exists at the time of a bank-
ruptcy filing, then § 365(o) requires that debtor to proceed not
under Chapter 11 but under Chapter 7, to which § 365(o) does
not apply.” Id.

   [17] In addition to its assumption and immediate cure
requirement, § 365(o) addresses the priority of a claim arising
from an obligation under a capital maintenance commitment.
The second portion of the statute provides that any claim for
a “subsequent breach of . . . obligations [under a commitment
to maintain the capital of a federally insured depository insti-
tution] shall be entitled to priority under section 507.” The
reference to § 507 in § 365(o) directs the reader to
§ 507(a)(9). That provision, also enacted as part of the Com-
prehensive Thrift and Bank Fraud Prosecution and Taxpayer
Recovery Act of 1990, places “unsecured claims based on any
commitment by the debtor to a Federal depository institutions
regulatory agency . . . to maintain the capital of an insured
depository institution” in ninth priority in a bankruptcy case.16
  15
      Section 365(a) provides that, with certain exceptions, “the trustee,
subject to the court’s approval, may assume or reject any executory con-
tract . . . of the debtor.” 11 U.S.C. § 365(a).
   16
      The current § 507(a)(9) was enacted as § 507(a)(8). It was rede-
signated § 507(a)(9) in the Bankruptcy Reform Act of 1994, Pub. L. No.
103-394, § 304, 108 Stat. 4186, 4132.
                  IN RE IMPERIAL CREDIT INDUSTRIES                 6319
The plain language of § 365(o) and § 507(a)(9) suggests that
the FDIC’s claim under the performance guaranty — the
result of a subsequent breach of an obligation under a capital
maintenance commitment — is entitled to ninth priority.

   The district court instead held that the FDIC’s claim was
entitled to administrative priority under § 507(a)(2), which
allows second priority to “administrative expenses” including
the “actual, necessary costs and expenses of preserving the
estate.” 11 U.S.C. §§ 507(a)(2), 503(b)(1).17 It found that
Imperial’s failure to cure its deficit to the FDIC was equiva-
lent to an obligation arising from an executory contract,
defined in the bankruptcy context as a contract in which “the
obligations of both the bankrupt and the other party to the
contract are so far unperformed that the failure of either to
complete performance would constitute a material breach.”
Felix Cattle Co. v. Silver (In re Select-A-Seat Corp.), 625
F.2d 290, 292 (9th Cir. 1980) (per curiam) (internal quotation
mark omitted). Reasoning that obligations arising from execu-
tory contracts are generally accorded administrative priority
in the bankruptcy context, Collingwood Grain, Inc. v. Coast
Trading Co. (In re Coast Trading Co.), 744 F.2d 686, 692
(9th Cir. 1984), and retain that status in Chapter 7 cases, 11
U.S.C. § 726, the district court held that the FDIC’s claim was
entitled to administrative status in its Chapter 7 case.

   While initially plausible, this reasoning is ultimately unper-
suasive. First, we note that to the extent there is any ambigu-
ity in the meaning of §§ 507(a)(9) and 507(a)(2),
§ 507(a)(9)’s specific reference to debtors’ commitments to
federal depository institutions “to maintain the capital of an
insured depository institution” should govern over
§ 507(a)(2)’s more general provision which arguably could
cover the same subject matter. See Fourco Glass Co. v.
  17
    Only domestic support obligations and certain administrative expenses
of the trustee are paid before § 507(a)(2) expenses. See 11 U.S.C.
507(a)(1).
6320               IN RE IMPERIAL CREDIT INDUSTRIES
Transmirra Prods. Corp., 353 U.S. 222, 228-29 (1957)
(“Specific terms prevail over the general in the same or
another statute which otherwise might be controlling.” (inter-
nal quotation marks omitted)).

   [18] More importantly, we simply fail to see how Imperi-
al’s obligation to the FDIC constitutes an administrative
expense. Administrative expenses are defined in the Bank-
ruptcy Code as “the actual, necessary costs and expenses of
preserving the estate.” 11 U.S.C. § 503(b)(1).18 We recognize
that, generally, an executory contract that the trustee assumes
post-petition under § 365(a) is accorded administrative prior-
ity for the purpose of “encourag[ing] third parties to contract
with the bankruptcy estate for the benefit of the estate as a
whole.” Boeing N. Am., Inc. v. Ybarra (In re Ybarra), 424
F.3d 1018, 1026 (9th Cir. 2005). However, the Trustee’s
assumption of Imperial’s executory contract with the FDIC
when it filed for Chapter 11 cannot be equated with a trustee’s
assumption of an ordinary executory contract. Under § 365(a),
a trustee can choose to assume or a reject an executory con-
tract. Section 365(o) creates an exception to the trustee’s
assume or reject power, Firstcorp, 973 F.3d at 247, because
when the contract at issue is a capital maintenance agreement
with a federal depository institution, the trustee automatically
assumes the contract when it files for Chapter 11 under
§ 365(o). Because of the required assumption, the stated ratio-
nale for according claims arising from assumed executory
contracts administrative status — encouraging debtors to
transact with the estate — is not implicated. Accordingly, the
FDIC’s claim is not an administrative expense as it is not an
“actual, necessary” cost of preserving Imperial’s Chapter 7
estate. It must instead be granted ninth priority per the spe-
cific language in § 507(a)(9).
  18
     Administrative expenses also include various other expenses such as
certain taxes, fines, compensation and reimbursement, see 11 U.S.C.
§ 503(b)(1)(C)-(D), (b)(2)-(4), but the general definition in § 503(b)(1)(A)
is the only applicable provision here.
                IN RE IMPERIAL CREDIT INDUSTRIES            6321
   A holding to the contrary would lead to nonsensical results.
The parties agree that had Imperial initially filed under Chap-
ter 7, the FDIC’s claim would be in ninth priority. Section
365(o) never comes into play in Chapter 7 cases, so the
FDIC’s claim would necessarily be categorized as an “al-
lowed unsecured claim[ ] based upon any commitment by the
debtor to a Federal depository institutions regulatory agency
(or predecessor to such agency) to maintain the capital of an
insured depository institution” under § 507(a)(9). In contrast,
based on the district court’s analysis, the FDIC’s claim is enti-
tled to administrative priority in this case simply because
Imperial initially filed for Chapter 11. We see no principled
reason why a Chapter 7 debtor should be treated differently
based on whether it initially filed in Chapter 11 or Chapter 7,
when in either case the debtor ends up in Chapter 7 without
benefitting from Chapter 11 reorganization possibilities. See
United State v. Middleton, 231 F.3d 1207, 1210 (9th Cir.
2000) (“We are instructed to avoid, if possible, an interpreta-
tion that would produce ‘an absurd and unjust result . . . .’ ”)
(quoting Clinton v. City of New York, 524 U.S. 417, 429
(1998)).

   Granting the FDIC’s claim administrative status would also
erroneously read language into § 365(o) that does not appear
in the statute. A debtor with an uncured capital maintenance
obligation to a federal depository institution cannot reorganize
under Chapter 11 unless it first cures its deficit, and it can
avoid the immediate cure obligation only by liquidating under
Chapter 7. Indeed, while the district court held that the
FDIC’s claim was entitled to administrative priority in Chap-
ter 11 and retained that status in Chapter 7, in actuality Impe-
rial was unable to even enter Chapter 11 due to its failure to
cure its deficit under 11 U.S.C. § 365(o). We believe that pre-
clusion of reorganization under Chapter 11 is the only conse-
quence Congress prescribed for a debtor who fails to cure its
obligation under § 365(o), and that we would be adding to the
statute if we instead held that debtors faced the additional
consequence of administrative priority post-conversion. See
6322            IN RE IMPERIAL CREDIT INDUSTRIES
Franklin Sav. Corp. v. Office of Thrift Supervision, 303 B.R.
488, 502 (D. Kan. 2004) (“The remedy for a debtor’s inability
to cure the capital deficiency is that the debtor may be prohib-
ited from proceeding under Chapter 11,” not that the FDIC be
entitled to a superpriority claim.); see also Firstcorp, 973 F.2d
at 248 (Section 365(o) was intended to prevent bank holding
companies from “us[ing] a Chapter 11 reorganization to jetti-
son the subsidiary in an effort to enhance [their] own financial
position and that of its creditors . . . . If the holding company
is not financially able to satisfy its capital maintenance obli-
gations, then § 365(o) denies it the opportunity to reorganize
under Chapter 11, leaving liquidation under Chapter 7 as its
only option.”).

   Last, our result is not undermined by the Fourth Circuit’s
decision in Firstcorp, as the FDIC suggests. Firstcorp held
that a debtor was required to immediately cure any deficits in
capital maintenance obligations owed to federal depository
institutions upon filing for Chapter 11 under § 365(o). 973
F.3d at 247-48. In reaching that holding, the Fourth Circuit
addressed the reference to § 507 in § 365(o), which the debtor
argued relegated the FDIC’s claim to ninth priority, rather
than immediate cure status. Id. In an effort to explain the ref-
erence to § 507, the court drew a distinction between obliga-
tions arising from a pre-petition breach of a capital
maintenance commitment and obligations arising from a post-
petition or “subsequent breach” of a capital maintenance com-
mitment. It held that pre-petition breaches had to be cured
immediately upon filing for Chapter 11, while post-petition
breaches in Chapter 11 cases were entitled only to ninth prior-
ity. See id. at 248 (the reference to § 507 “merely indicates
that breaches in capital maintenance obligations that arise
after the bankruptcy filing are subject to the priority scheme
of § 507”).

  The Firstcorp court interpreted the scope of the immediate
cure obligation under § 365(o) in a Chapter 11 case only, and
never purported to address the priority of any claims. Id. at
                IN RE IMPERIAL CREDIT INDUSTRIES           6323
247-48. The court explicitly declined to address the priority
of claims arising from post-petition breaches in Chapter 11
cases, id. at 248 n.4, and the issue confronting us here — the
priority of a claim arising from a pre-petition breach post-
conversion to Chapter 7 — was never even raised before the
Firstcorp court, id. at 247-48. Thus, although Firstcorp held
that the reference to § 507 in § 365(o) suggested that post-
petition or “subsequent” breaches of capital maintenance obli-
gations would be entitled to ninth priority in Chapter 11 cases,
it does not foreclose our conclusion that a debtor’s failure to
cure a pre-petition capital maintenance obligation is also sub-
ject to the § 507 priority scheme post-conversion to Chapter
7.

   [19] Accordingly, we hold that a failure to cure a § 365(o)
deficit in a Chapter 11 case does not give rise to an adminis-
trative priority in a Chapter 7 case. Rather, the FDIC’s claim
attributable to Imperial’s failure to cure its debt is entitled
only to ninth priority under §§ 365(o) and 507(a)(9). We thus
remand to the district court for further proceedings consistent
with this opinion.

                    III.   CONCLUSION

  We affirm in part, and reverse and remand in part. Each
party shall bear its own costs on appeal.
