
USCA1 Opinion

	




                           UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT          No. 97-1014                        IN RE LUDLOW HOSPITAL SOCIETY, INC.,                                       Debtor                                                                            DAVID J. NOONAN, TRUSTEE,                                Plaintiff, Appellant,                                         v.                       SECRETARY OF HEALTH AND HUMAN SERVICES,                                Defendant, Appellee.                                                                        APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                [Hon. Frank H. Freedman, Senior U.S. District Judge]                                                                                           Before                               Torruella, Chief Judge,                             Cyr, Senior Circuit Judge,                             and Boudin, Circuit Judge.                                                                   Claudia                         J.                             Reed, with whom   David                                                      J.                                                          Noonan and   Cohen,          Rosenthal P.C. were on brief for appellant.               Jeffrey                         Clair, Attorney, Appellate Staff Civil Division,          Department of Justice, with whom    Frank                                                       W.                                                           Hunger, Assistant          Attorney General, Donald                                     K.                                        Stern, United States Attorney, and          William                     Kanter, Attorney, Appellate Staff Civil Division,          Department of Justice, were on brief for appellee.                                                                                       August 13, 1997                                                                        CYR, Senior                                 Circuit                                         Judge.  David J. Noonan, chapter 7          trustee ("the Trustee") for Ludlow Hospital Society, Inc. ("the          Hospital"), appeals a district court judgment vacating two          bankruptcy court orders entered pursuant to Bankruptcy Code S 105,          11 U.S.C. S 105(a). The challenged orders purportedly extended the          one-year regulatory deadline imposed by the Secretary, United          States Department of Health and Human Services ("HHS"), for          hospitals formerly participating in the Medicare program to sell          their capital assets and claim supplemental reimbursement from HHS          for certain capital-asset depreciation credits. As we conclude          that the bankruptcy court exceeded its equitable powers under          Bankruptcy Code S 105, we affirm the district court judgment.                                          I                                     BACKGROUND                    Until it closed on February 17, 1995, the Hospital had          participated in the Medicare program, receiving annual HHS reim-          bursements for inpatient operating costs, as well as capital-asset          depreciation credits, relating to its provision of services to          Medicare recipients. Participating hospitals which retain          ownership of the capital assets used to provide services to their          Medicare recipients are entitled to periodic reimbursement for          estimated actual depreciation on those assets, as determined under          accepted accounting practices. See 42 U.S.C. S 1395x(v)(1)(O)(ii)          (Medicare statute authorizing HHS Secretary to implement regula-                                          2          tions detailing asset-depreciation methodologies).                    Upon its closure, the Hospital's participation in the          Medicare program terminated as well. HHS administrative regula-          tions allow a one-year post-termination period within which          hospitals that previously participated in the Medicare program must          sell their Medicare-related capital assets as a precondition to          recapturing any pretermitted capital-asset depreciation credits          from HHS.  See 42 C.F.R. S 413.134(f)(3). Thus, a hospital which          has closed would be eligible for further depreciation reimburse-          ments from HHS on a Medicare-related capital asset which was sold          within one year after its closure for less than its depreciated          basis.                     At the time, HHS regulations allowed hospitals forty-five          days after their withdrawal from the Medicare program to submit a                                             The HHS depreciation methodology is similar to that utilized          for federal tax purposes. For example, a CAT scanner worth          $1,000,000, with an estimated useful life of 25 years, might          receive an HHS depreciation reimbursement of $40,000 per year over          a 25-year period.  See generally 42 C.F.R. S 413.134(a)-(d).               On the same day, the Hospital filed a voluntary chapter 7          petition.                Under our hypothetical,                                        see supra note 1, if a hospital held          the Medicare-related capital asset for ten years, its depreciated          basis would be $600,000, since HHS already would have reimbursed          the hospital $40,000 per annum for estimated depreciation during          the ten-year period, for a total of $400,000. The "depreciated          basis" would be $600,000     its $1 million original cost, less          $400,000 in estimated depreciation. Were the asset to sell for          only $500,000, therefore, S 413.134(f)(3) would permit the hospital          to apply for the $100,000 shortfall between the depreciated basis          ($600,000) and the actual sale price ($500,000).                                          3          final report outlining all reimbursable Medicare costs incurred          prior to their withdrawal.    See  id. S 413.24(f) (1994). An          administrative extension could be obtained from HHS on a showing          that hospital operations had been "significantly affected due to          extraordinary circumstances over which the [hospital] ha[d] no          control, such as flood or fire."  Id. S 413.24(f)(2)(ii) (1994).          The HHS regulations likewise allow hospitals a three-year period          within which to reopen and amend a final cost report which was          timely filed.  See id. S 405.1885. Without opposition from the          government, the Trustee obtained two extensions of the forty-five-          day filing deadline from the bankruptcy court and the Hospital's          final cost report was submitted to HHS within the extended          deadline.                     The Trustee proceeded to attempt to sell the Hospital's          capital assets, anticipating that the sale price might not equal          their depreciated basis,  see supra notes 1 & 3, and that the          chapter 7 estate might therefore claim supplemental Medicare reim-          bursements under the aforementioned HHS capital-asset-depreciation-          adjustment provision.  See id. S 413.134(f)(3). It soon became          apparent, however, that the capital assets could not be sold by          February 17, 1996, the first anniversary of the Hospital's closure          and the deadline for realizing a depreciation-adjustment reimburse-                                             Although the first motion for extension was not served on the          government, an Assistant United States Attorney verbally assured          the Trustee that the government would not oppose the extension.          Two months later, the Trustee served the second motion on the          government, but the bankruptcy court granted it without awaiting a          response from the government.                                           4          ment under 42 C.F.R. S 413.134(f)(3).                     Therefore, on February 8, 1996, the Trustee sought          equitable relief from the bankruptcy court under Bankruptcy Code S          105(a), extending the one-year period for selling the Hospital's          capital assets beyond the original February 17 deadline, in order          not to forfeit the potential depreciation-adjustment claim. The          Secretary objected, on the grounds that 42 C.F.R. S 413.134(f)(3)          itself permits neither exceptions nor extensions and that the          bankruptcy court accordingly lacked the equitable power to engraft          an exception, pursuant to Bankruptcy Code S 105(a), which would          bestow "substantive rights" upon the chapter 7 estate not autho-          rized under the HHS regulations.                     The bankruptcy court granted the extension over the          Secretary's objection. It relied upon the equitable powers con-          ferred by Bankruptcy Code S 105(a), reasoning that: (1) in the          special context of bankruptcy proceedings, the rigid one-year HHS          deadline for selling capital assets was unreasonable, since a          newly-appointed trustee may require more time to marshal estate          assets; (2) strict compliance with the one-year HHS deadline would          result in a "windfall" to HHS and deprive the Hospital of valuable          assets (                 viz., depreciation-adjustment reimbursements), to which it          would otherwise be "entitled;" (3) an extension would not harm HHS,          as the Trustee would not be allowed to file a depreciation-                                             Since the Trustee was unable to consummate a sale within the          initial extension period, the court later granted the Trustee          another extension.                                           5          adjustment reimbursement claim based on the appraised value of the          capital assets after February 17, 1996; and (4) HHS was estopped          from contesting the bankruptcy court order, as it had acquiesced in          two previous extensions of the                                        forty-five-day period for filing the          final cost report, see 42 C.F.R. S 413.24(f); supra note 4.                    The district court vacated the bankruptcy court order on          intermediate appeal and the Trustee appealed. Meanwhile, the          Trustee consummated a sale of the capital assets and submitted a          reimbursement claim to HHS, estimated at between $300,000 and          $1,000,000.                                         II                                     DISCUSSION          A.   Equitable Estoppel                    The Trustee first insists that HHS is estopped from          claiming that the bankruptcy court lacked authority, under          Bankruptcy Code S 105(a), to extend the one-year filing deadline          prescribed in S 413.134(f)(3), since the government had acquiesced          in two earlier bankruptcy court extensions of the  forty-five-day          deadline for filing the Hospital's final cost report.                                                               The Trustee                                             We review the equitable estoppel ruling under a mixed stan-          dard, assessing the legal conclusion   de  novo and all factual          findings for clear error.   See Granite                                                   State                                                          Ins.                                                               Co. v.  Smart          Modular                   Techs.,                           Inc., 76 F.3d 1023, 1028 (9th Cir. 1996);  Marine          Transp.                   Servs.                          Sea-Barge                                    Group,                                            Inc. v. Python                                                           High                                                                 Performance          Marine Corp., 16 F.3d 1133, 1138 (11th Cir. 1994); A.C. Auckerman          Co. v. R.L.                       Chaides                               Constr.                                       Co., 960 F.2d 1020, 1028 (Fed. Cir.          1991).               As a threshold matter, HHS contends that the bankruptcy court          lacked subject matter jurisdiction to declare the one-year HHS          deadline inoperative, because Congress has established an exclusive                                          6          essentially suggests that the verbal assurances from government          counsel,                   see                       supra note 4, that there would be no opposition to the          two extensions of the forty-five-day period for filing the final          cost report, coupled with HHS acquiescence thereto, make this an          "unusual" case in which equitable estoppel may be invoked against          the government. The Trustee argues that the district court erred          in ruling that he needed to show that the government had engaged in          "affirmative misconduct," since the United States Supreme Court has          never embraced lower court decisions which require such proof where          a party seeks monetary recoveries (                                           i.e., invading the public fisc).          See              Schweiker v.                           Hansen, 450 U.S. 785, 788 (1981);                                                             Akbarin v.                                                                        INS,          669 F.2d 839, 842 (1st Cir. 1982). According to the Trustee, HHS          should be estopped even assuming its earlier acquiescence was                                        administrative/judicial appeals process governing HHS reimburse-          ments, see 42 U.S.C. S 1395ii (incorporating   mutatis mutandi S          405(h) of the Social Security Act, which provides that no HHS          decision "shall be reviewed by any person, tribunal, or governmen-          tal agency except as herein provided," and that "[n]o action          against [HHS] shall be brought under section 1331 or 1346 of Title          28 to recover on any claim arising under this subchapter"), a          process which the Trustee has yet to exhaust.     See Heckler v.          Ringer, 466 U.S. 602, 614-17 (1984) (barring all pre-exhaustion          actions by courts where both "the standing and substantive basis"          for the claim arise under the Medicare statute). On the other          hand, the Trustee argues that S 405(h) plainly bars pre-exhaustion          judicial review only in those courts whose jurisdiction arises          under 28 U.S.C. SS 1331 and 1346, whereas bankruptcy court          jurisdiction in the instant case arises under 28 U.S.C. S 1334. As          the jurisdictional issue is problematic,                                                   compare,                                                            e.g.,                                                                  In re Town          & Country Home Nursing Servs., Inc.                                            , 963 F.2d 1146, 1155 (9th Cir.          1991),                 with                      In re Upsher Labs., Inc.                                             , 135 B.R. 117, 119-20 (Bankr.          W.D. Mo. 1991), and the merits of the Trustee's appeal are not,                                                                         see          infra, we elect to bypass the jurisdictional issue at this time.          See              Institut Pasteur                              v.                                  Cambridge Biotech Corp.                                                        , 104 F.3d 489, 492          (1st Cir.) ("appellate court may bypass jurisdictional questions          where appeal would falter on merits even assuming jurisdiction"),          cert.                denied, 65 U.S.L.W. 3741 (U.S. June 27, 1997) (No. 96-1698).                                          7          erroneous or inadvertent, as long as the Trustee reasonably relied          to his detriment on the government's assurances. We conclude that          the bankruptcy court erred.                    All the authorities relied upon by the Trustee predated          Office of Personnel Mgt.                                  v.                                      Richmond, 496 U.S. 414, 420-22 (1990),          in which the Supreme Court unequivocally observed that, at a bare          minimum, its earlier precedents abjured any application of the          doctrine of estoppel absent a showing of "affirmative misconduct"          by the government. See,                                   e.g.,                                         LaFlower v.                                                     United States                                                                 , 849 F.2d          8, 11-12 (1st Cir. 1988);                                    United States                                                v.                                                    Ven-Fuel, Inc.                                                                 , 758 F.2d          741, 761 (1st Cir. 1985). The evidence adduced by the Trustee came          up well short of the Richmond benchmark.                    First and foremost, the Trustee and the bankruptcy court          never afforded HHS itself a meaningful opportunity to respond to          the S 413.24(f) extension motions; the first motion was never          served on either the government or HHS, and the second motion was          allowed by the bankruptcy court before HHS could file a formal          response.  See supra note 4. Second, the Trustee reads far too          much into the oral assurances given by the Assistant United States          Attorney (AUSA) in March 1995, who simply stated that the govern-          ment did not intend to oppose extension of the forty-five-day          deadline. As there was no mention or suggestion that any deadline          extensions were to be predicated on Bankruptcy Code S 105(a),          however, there can have been no implicit concession that the          extensions the Trustee was seeking were within the equitable power          of the bankruptcy court under Bankruptcy Code S 105(a).                                          8                    Moreover, the government's ready acquiescence to the two          earlier                  forty-five-day extensions is hardly remarkable, given that          the HHS regulations themselves permit HHS to grant such extensions          in various extenuating circumstances.        See 42 C.F.R. S          413.24(f)(2)(ii) (hospital may obtain extension of 45-day deadline          if its operations are "significantly affected due to extraordinary          circumstances over which the [hospital] has no control, such as          flood or fire");                           id. S 405.1885 (hospital may be allowed to reopen          and amend final cost report for up to three years). Whereas the          one-year deadline prescribed in 42 C.F.R. S 413.134(f)(3) is          subject to no such exceptions.                    We therefore conclude that the Trustee reasonably could          not have relied upon the oral assurances received from the AUSA          regarding a regulatory deadline ( viz., S 413.24(f)), materially          distinct from the one-year deadline prescribed in 42 C.F.R. S          413.134(f)(3), as a basis for inferring a blanket government          concession relating to the bankruptcy court's equitable power to          override HHS regulatory deadlines. The estoppel claim accordingly          fails.           B.   Administrative Deadline Extensions               Under Bankruptcy Code Section 105(a)                                             These same principles likewise encumber any application of the          law-of-the-case doctrine in these circumstances. See                                                                Knapp Shoes,          Inc. v. Sylvania                            Shoe                                 Mfg.                                      Corp., 72 F.3d 190, 197-98 (1st Cir.          1995) (noting that law-of-the-case doctrine applies only to sequen-          tial rulings on same issue).               Following an intermediate appeal, we review    de  novo the          conclusions of law made by the district court.    See LaRoche v.          Amoskeag Bank                       (                        In re LaRoche                                     ), 969 F.2d 1299, 1301 (1st Cir. 1992).                                          9                    The Trustee next contends that section 105(a) empowers          the bankruptcy court to "harmonize" the Medicare statute, and its          implementing regulations, with the Bankruptcy Code.                                                             He points out          that whereas Code provisions are designed generally to facilitate          chapter 7 estate-property recoveries for the benefit of unsecured          creditors,                     see,                          e.g., Bankruptcy Code S 363(f) (allowing chapter 7          trustee to sell property "free and clear" of liens), the one-year          HHS deadline for hospitals to conduct capital-asset sales through          a chapter 7 trustee, see 42 C.F.R. S 413.134(f)(3), arbitrarily          undermines efforts to preserve and maximize creditor recoveries by          working a hypertechnical forfeiture of the depreciation-adjustment          credit to which the debtor Hospital was otherwise entitled.                    The Trustee thus characterizes the thrust of the chal-          lenged filing deadline as an unfair administrative effort to reduce          HHS's monetary exposure to a minimum. As the Trustee sees it, even          assuming that any such administrative aim comported with congres-          sional intent, see, e.g., Northwest Hosp., Inc. v. Hospital Serv.          Corp., 687 F.2d 985, 995 (7th Cir. 1982) (invalidating HHS          regulation imposing "blanket disallowance" rule which did not serve          purposes of Medicare statute), whatever legitimate purpose is          served by the HHS deadline is as well served by the equitable                                        Its interpretation of Bankruptcy Code S 105(a) presents a pure          question of law as well.  See In re Jarvis, 53 F.3d 416, 418 (1st          Cir. 1995).                 Section 105(a) provides, in pertinent part: "The court may          issue any order, process, or judgment that is necessary or          appropriate to carry out the provisions of this title." 11 U.S.C.          S 105(a).                                         10          remedy fashioned by the bankruptcy court under section 105(a):          allowing the Trustee to file the S 413.134(f)(3) claim but          employing the appraised value of the Hospital's capital assets at          the one-year anniversary of its closure, rather than the sale price          obtained after the one-year period expired. Thus, according to the          Trustee, the bankruptcy court's harmonization of legitimate Code          objectives and Medicare program concerns avoided any inequitable          result while precluding a "windfall" to HHS.                    Section 105(a) empowers the bankruptcy court to exercise          its equitable powers    where "necessary" or "appropriate"    to          facilitate the implementation of other Bankruptcy Code provisions.          See supra note 10. Although expansively phrased, section 105(a)          affords bankruptcy courts considerably less discretion than first          meets the eye, and in no sense constitutes "'a roving commission to          do equity.'" Chiasson v.                                    J. Louis Matherne & Assocs.                                                              (                                                               In re Oxford          Mgt., Inc.                   ), 4 F.3d 1329, 1334 (5th Cir. 1993) (citation omitted).          See In                  re                     Lapiana, 909 F.2d 221, 224 (7th Cir. 1990); Donovan v.          Bundy (In                     re                        Donovan), 183 B.R. 700, 708 (Bankr. W.D. Pa. 1995)          (same). Instead, the equitable discretion conferred upon the          bankruptcy court by section 105(a) "is limited and cannot be used          in a manner inconsistent with the commands of the Bankruptcy          Code." In re Plaza de Diego Shopping Ctr., Inc.                                                        , 911 F.2d 820, 824          (1st Cir. 1990). These limitations have been variously described.                    First, Bankruptcy Code S 105(a) may not be invoked to          alter substantive debtor rights defined under the applicable          nonbankruptcy law.  See, e.g., Bird v. Carl's                                                         Grocery                                                                 Co. (In                                                                          re                                         11          NWFX,                 Inc.), 864 F.2d 593, 596 (8th Cir. 1988) ("An 'equitable          setoff' such as that fashioned by the bankruptcy court in the          present case is not a proper use of the bankruptcy court's          equitable powers because it creates new substantive rights for the          parties . . . ."); see also In re Continental Airlines Corp., 907          F.2d 1500, 1509 (5th Cir. 1990) (holding that S 105(a) does not          permit substantive modifications of labor agreement).                    Following along these lines, the Secretary asserts that          the Hospital's substantive right to claim a capital-asset deprecia-          tion-adjustment credit was automatically extinguished because no          capital-asset sale occurred within the one-year period prescribed          in S 413.134(f)(3), and that an extinguished right cannot be          resurrected under section 105(a).  See In                                                     re                                                        Chicago,                                                                  Milwaukee,          St. Paul & Pac. R.R.                             , 791 F.2d 524, 528 (7th Cir. 1986) ("The fact          that a [bankruptcy] proceeding is equitable does not give the judge          a free-floating discretion to redistribute rights in accordance          with his [or her] personal views of justice and fairness, however          enlightened those views may be."). The maxim relied upon by the          Secretary reveals less than the complete picture, however, unless          its application is attuned to the particular context.                    Congress quite obviously intended to invest debtor          estates and their representatives with certain rights, some of          which                may                    augment prepetition rights possessed by the debtor under          nonbankruptcy law. See                                  Johnson v.                                             First Nat'l Bank of Montevideo                                                                          ,          719 F.2d 270, 273 (8th Cir. 1983) (noting: "[W]here Congress has          enacted bankruptcy legislation which conflicts with state law,                                         12          state law must yield."). But since section 105   itself is not a          source of new substantive rights, the bankruptcy court may invoke          section 105(a) only if the equitable remedy utilized is demon-          strably necessary to preserve a right elsewhere provided in the          Code.  See Norwest                              Bank                                   Worthington v. Ahlers, 485 U.S. 197, 206          (1988) ("[W]hatever equitable powers remain in the bankruptcy          courts must and can be exercised within the confines of the          Bankruptcy Code"; "[u]nder this section, a court may exercise its          equitable power only as a means to fulfill some specific Code          provision."); Official Unsecured Creditors' Comm. v. Stern (In re          SPM               Mfg.                    Corp.), 984 F.2d 1305, 1311 (1st Cir. 1993) ("[S]ection          105(a) [does not] authorize courts to create substantive rights          that are otherwise unavailable under the Code, or to expand the          contractual obligations of parties.");                                                 In re Dillon                                                            , 194 B.R. 533,          536 (Bankr. S.D. Fla. 1996).                    In this vein, the Trustee argues, the Hospital was          entitled to the deadline extensions granted by the bankruptcy court          since this is the sort of "technical" accommodation that tends to          maximize the overall value of the chapter 7 estate, hence fits          within the penumbra    if not the express terms    of Bankruptcy          Code S 363.  We need not address the two maxims mentioned above,                                              Bankruptcy Code S 363 provides, in relevant part:                    The trustee, after notice and hearing, may                    use, sell, or lease, other than in the ordi-                    nary course of business, property of the                    estate.           11 U.S.C. S 363(b)(1). The Trustee interprets the quoted provision                                         13          however, as there is a sounder foundation for the district court's          conclusion.  See Baybank-Middlesex v.  Ralar                                                        Distribs.,                                                                   Inc., 69          F.3d 1200, 1202 (1st Cir. 1995) (court of appeals may affirm          district court on any ground disclosed in the record);                                                                Max Sugarman          Funeral                   Home,                         Inc. v. A.D.B.                                        Investors, 926 F.2d 1248, 1253 n. 9          (1st Cir. 1991) (same).                     The bankruptcy court may not utilize section 105(a) if          another, more particularized Code provision                                                        here, section 108(b)             impedes the requested exercise of equitable power.  See In                                                                          re          Fesco Plastics Corp., 996 F.2d 152, 154 (7th Cir. 1993) ("By the          same token, when a specific Code section addresses an issue, a          court may not employ its equitable powers to achieve a result not          contemplated by the Code."); Landsing Diversified Props. v. First          Nat'l Bank & Trust Co.                                (                                 In re Western Real Estate Fund, Inc.                                                                     ), 922          F.2d 592, 601 (10th Cir. 1990) ("[A] bankruptcy court's supplemen-          tary equitable powers [under S 105(a)] may not be exercised in a          manner that is inconsistent with the other, more specific provi-          sions of the Code."),                                modified                                         on                                            other                                                  grounds, 932 F.2d 898 (7th          Cir. 1991);  Continental                                     Airlines, 907 F.2d at 1509;    Levit v.          Ingersoll                     Rand                          Fin.                               Corp., 874 F.2d 1186, 1198 n. 10 (7th Cir.          1989) (same);                        Carter v.                                  Peoples Bank & Trust Co.                                                         (                                                          In re BNW, Inc.                                                                         ),          201 B.R. 838, 847 (Bankr. S.D. Ala. 1996) ("When the Bankruptcy          Code establishes a right explicitly, a bankruptcy court cannot                                        as necessarily implying that a trustee has the right "to liquidate          property of the Debtor's estate at any time and under any circum-          stances that would prove beneficial to the Debtor's estate," unless          other provisions of S 363 expressly prohibit the Trustee's choice          of timing or circumstances.                                         14          expand or contract that right implicitly through use of equitable          powers."); 2 Lawrence P. King, Collier on Bankruptcy, q 105-5 (15          ed. 1996) (S 105 does not "override explicit mandates of other          sections of the Bankruptcy Code or mandates of other state and          federal statutes.") (citations omitted);                                                   see                                                       also,                                                             e.g.,                                                                   Chiasson,          4 F.3d at 1334 ("This [payment] order effectuated an impermissible          substantive alteration of the Code's provisions."). Unfortunately,          however, by focusing exclusively on the two principles first          discussed above, the parties managed to parry the legitimate          concerns harbored by the bankruptcy court regarding the dissonant          theme reflected in section 108(b), to which we now turn.                    Bankruptcy Code S 108(b) states:                     Except as provided in subsection (a) of this                    section, if applicable nonbankruptcy law, an                    order entered in a nonbankruptcy proceeding,                    or an agreement fixes  a period within  which                    the debtor or an individual protected under                    section 1201 or 1301 of this title  may  file                    any pleading, demand, notice, or proof of                    claim or loss, cure a default, or perform any                    other similar act,  and such  period has  not                    expired before the date of the filing of the                    petition, the trustee may only file, cure, or                    perform, as the case may be, before the later                    of                                        (1)  the end of  such period, including                              any suspension of such period oc-                              curring on or after the commencement                              of the case; or                                      (2)  60 days after the order for relief.          11 U.S.C. S 108(b) (emphasis added). The bankruptcy court          considered, sua  sponte, whether section 108(b) precluded its          reliance on section 105(a) as authority for extending the one-year                                         15          regulatory deadline imposed by the HHS regulation.                                                            It received no          aid from the parties, however, as the Trustee and the Secretary          agreed below that (i) section 108(b) was inapposite because the          Trustee was not seeking an extension to                                                  file                                                       a                                                         proof                                                               of                                                                  claim, and          (ii) section 108(b) applies to "filing deadlines" only. The          parties likewise noted that 42 C.F.R. S 413.134(f)(3) merely          requires the Trustee to consummate a capital-asset sale by the          first anniversary of the Hospital's closure, not that the Trustee          need have filed the S 413.134(f)(3) depreciation-adjustment claim          within the one-year period. The cramped construction accorded          section 108(b) by the parties cannot stand.                    Under its plain terms, as abundantly indicated,   inter          alia, by its inclusion of the generic phrase "cure a default,"          section 108(b) is not restricted to trustee initiatives that may be          characterized as "filings." For one thing, a "cure" for a default          need involve no "filing" at all, depending on the particular          circumstances. Yet more importantly, section 108(b) also contains          the catchall phrase: or "perform any other similar act."      See          Autoskill,                      Inc. v. National                                       Educ.                                             Support                                                     Systs., 994 F.2d 1476,          1484 (10th Cir. 1993) ("Although S 108(b) does not specifically                                              There is no dispute that the Medicare statute and the HHS          regulation qualify as "applicable nonbankruptcy law" under S          108(b). See                       Gladwell v.                                   Harline (                                           In re Harline                                                       ), 950 F.2d 669, 674          (10th Cir. 1991) ("Sections 108(a), (b) & (c) all use the phrase          'applicable nonbankruptcy law,' and courts have held that phrase          in these subsections refers to federal law.") (collecting cases);          Eagle-Picher Indus., Inc. v. United States, 937 F.2d 625, 639-40          (D.C. Cir. 1991) (Federal Tort Claims Act is "applicable          nonbankruptcy law" under S 108(b)).                                         16          refer to notices of appeal, the statute includes a broad catchall          extending the time in which a debtor or trustee may 'perform any          other similar act' in addition to the steps listed.");  In re G-N          Partners, 48 B.R. 462, 467 (Bankr. D. Minn. 1985) ("[T]hat S 108(b)          is 'broader' than the listed items 'is obvious from its reading.'")          (citation omitted).                    Thus, the pertinent inquiry in construing section 108(b)          in the present context is whether all the undertakings expressly          enumerated in it share some common characteristic. We think the          answer is evident, since each undertaking enumerated in section          108(b) contemplates the exercise of a right, or the performance of          a duty, prescribed by nonbankruptcy law in the prepetition          environment encountered by the debtor, failing which any related          prepetition legal right would be forfeit.                    Moreover, even assuming the term "similar," as used in          section 108(b), see supra p. 15, were less than unambiguous, its          legislative history is clear beyond cavil. Section 108(b) was          designed to "permit the trustee, when he steps into the shoes of          the debtor, an extension of time for filing an action                                                               or                                                                  doing                                                                        some          other                act                    that                         is                            required                                     to                                        preserve                                                 the                                                     debtor's                                                              rights." H.R.          Rep. No. 95-595, at 318 (1977),   reprinted in 1978 U.S.C.C.A.N.          5963, 6275;                      see                          also S. Rep. No. 95-989, at 30 (1978),                                                                reprinted                                                                          in          1978 U.S.C.C.A.N. 5787, 5816 (same).    See 1 Lawrence P. King,          Collier                   on                      Bankruptcy q 108.03, at 108-6 (15th ed. 1991) (noting          that Congress included S 108(b) "so that the trustee could take the          necessary steps to preserve for the estate rights which might                                         17          otherwise be barred");                                 accord                                        First Nat'l Fidelity Corp.                                                                  v.                                                                      Perry,          945 F.2d 61, 65 (3d Cir. 1991) (holding that extension of time for          exercising state-law right to redeem foreclosed property from 3 to          5 years would contravene S 108(b)(2), which limits extensions to 60          days);                 Counties Contracting & Constr. Co.                                                  v.                                                      Constitution Life Ins.          Co., 855 F.2d 1054, 1058 n.4 (3d Cir. 1988) (holding that S 108(b)          pertains to payment of insurance policy premium during grace          period, "an act necessary to continue the policy in effect");          Whispering                      Bay                          Campground,                                       Inc. v. Fagan ( In                                                          re                                                             Whispering                                                                         Bay          Campground,                       Inc.), 850 F.2d 443, 445-46 (8th Cir. 1988) (same;          redemption rights under Minnesota law).                    The outer reaches of section 108(b), in relation to          contractual time limitations other than "filing" deadlines, remain          in sharp dispute.  Compare,  e.g., Good                                                   Hope                                                        Refineries,                                                                    Inc. v.          Benavides, 602 F.2d 998, 1002-03 (1st Cir. 1979) (holding that          neither Bankruptcy Act S 11(e) nor its successor, Bankruptcy Code          S 108(b), afforded trustee 60-day extension to exercise option          contract),                     with                          In re Santa Fe Dev. & Mortgage Corp.                                                             , 16 B.R. 165,          167-68 (B.A.P. 9th Cir. 1981) (holding that S 108(b) extends          "option contract" for 60 days). These disputes are no less likely          where, as here, the deadline is fixed not by contract but by          "applicable . . . law" (viz., the Medicare statute), but involves          something more than a paper filing.                    In all likelihood the applicability of section 108(b)          will be decided on a case-by-case basis until the provision is          clarified by Congress or the Supreme Court. Regulatory deadlines                                         18          are clearly embraced by section 108(b)'s reference to "applicable          nonbankruptcy law," and section 108(b) cannot be wholly limited to          paper filings, since it refers to default cures. For the present          we are satisfied that the one-year sale requirement is sufficiently          linked to an ongoing HHS proceeding to invoke section 108(b) and          that no pertinent consideration makes its application inappropri-          ate.                     In the present context, an indispensable undertaking to          preserve the Hospital's prepetition right to claim a capital-asset-          depreciation adjustment from HHS was the sale of its capital          assets, and the applicable HHS regulations unconditionally fixed          the deadline for doing so at one year from the date the Hospital          ceased its participation in the Medicare program. Accordingly,          under the plain terms of section 108(b), the fact that the Trustee          would have had to take a further step after the sale, in order to          preserve the right of the chapter 7 estate to any such adjustment          (i.e., file a formal S 413.134(f)(3) claim with HHS), was altogeth-          er immaterial in the present circumstances because both undertak-          ings were necessary to protect the Hospital from an irremediable          forfeiture of its rights under the applicable nonbankruptcy law.                    Thus, although section 108(b) obviously allows the          trustee in bankruptcy a sixty-day grace period unavailable to the          prepetition debtor, it just as plainly bespeaks a legislative          intent to cut off the extension period, either at 60 days from the          filing of the chapter 7 petition or upon the expiration of any          remaining prepetition period, whichever occurs later.  See, e.g.,                                         19                    In the present context, an indispensable undertaking to          preserve the Hospital's prepetition right to claim a capital-asset          depreciation adjustment from HHS was the sale of its capital          assets, and the applicable HHS regulations unconditionally fixed          the deadline for doing so at one year from the date the Hospital          ceased its participation in the Medicare program. Accordingly,          under the plain terms of section 108(b) the fact that the Trustee          would have had to take a further step after the sale, in order to          preserve the right of the chapter 7 estate to any such adjustment          (i.e., file a formal S 413.134(f)(3) claim with HHS), was altogeth-          er immaterial in the present circumstances because both undertak-          ings were necessary to protect the Hospital from an irremediable          forfeiture of its rights under the applicable nonbankruptcy law.                    Thus, although section 108(b) obviously allows the          trustee in bankruptcy a sixty-day grace period unavailable to the          prepetition debtor, it just as plainly bespeaks a legislative          intent to cut off the extension period, either at 60 days from the          filing of the chapter 7 petition or upon the expiration of any          remaining prepetition period, whichever occurs later.  See, e.g.,          Johnson, 719 F.2d at 277-78 (holding that bankruptcy court cannot          use S 105(a) to extend period for redeeming property under state          law, a matter within S 108(b)'s ambit).                                                We allow, however, that S 108(b) may not invariably bar          relief; for example, where a more specific Code provision unambigu-          ously provides an extension incompatible with the 60-day provision          in S 108(b)(2). See,                                e.g.,                                      Moody v.                                               Amoco Oil Co.                                                           , 734 F.2d 1200,          1215 (7th Cir. 1984) ("We hold, however, that section 108(b) does          not apply to curing defaults in executory contracts. Section 365                                         20                    The Trustee complains, nevertheless, that it is unrealis-          tic to expect a newly appointed trustee to marshal estate assets          within sixty days of the petition, let alone sell all the capital          assets. Even though this may well be a compelling policy consider-          ation, however, Congress nonetheless surely envisioned that it          might be difficult to meet the sixty-day deadline imposed by          section 108(b)(2) in some circumstances. Yet it chose to legislate          no exception.                       Furthermore, the Trustee has not alleged that HHS was          responsible for any delay in selling the Hospital's capital assets.          Compare Johnson, 719 F.2d 270, 274-75 ("There is no claim that          [appellant] or any other party was guilty of any wrongdoing which          adversely affected the debtors' ability to redeem the property          within the statutory period. '[E]quity is available to protect          property rights of the innocent debtor from the wrongful acts of          other persons; however, equity does not extend to situations in          which the debtor is simply unable to make the required payment                                        specifically governs the time for curing defaults in executory          contracts, and thus, it controls here."). The Trustee argues that          S 363(b) is such a Code provision, because its aim is to maximize          the recoveries realized from sales of estate assets.   See  supra          note 11. Nevertheless, it is undisputed that S 363(b) provides no          express extension which could be thought to trump S 108(b)(2).          Furthermore, the extension sought by the Trustee had nothing to do          with facilitating a sale of estate assets, as distinguished from          preserving to the debtor a right in other property (   viz., HHS          depreciation allowances) which happened to hinge on the timely          occurrence of a sale of capital assets. On this collateral matter,          Congress left S 363 conspicuously silent.                Competing policy considerations were at work here as well.          Thus, for example, S 108(b)(2) affords contingent obligors of a          chapter 7 estate    like HHS    a modicum of finality.                                          21          within the prescribed time.'") (citation omitted),                                                            with                                                                 Otoe County          Nat'l Bank                    v.                        Easton (                               In re Easton                                           ), 882 F.2d 312, 315-16 (8th Cir.          1989) (departing from Johnson holding where "bad faith" has been          demonstrated).                    Although chapter 7 creditors may be deprived of potential          recoveries unless the trustee is able to sell a capital asset in          time to preserve the debtor estate's right to a postpetition          capital-asset depreciation adjustment from HHS, we are not at          liberty "to redistribute rights in accordance with [our] personal          views of justice and fairness."   Chicago,                                                      Milwaukee,                                                                 St.                                                                     Paul                                                                           &          Pac. R.R.                  , 791 F.2d at 528.                                      See                                          Heyman v.                                                    M.L. Marketing Co.                                                                     , 1997          WL 324382, at *5 (4th Cir. June 16, 1997) (No. 95-2929) ("Bankrupt-          cy filings often result in procedural confusion. Congress antici-          pated this confusion and made allowances for it. Among other          provisions, 11 U.S.C. S 108(b) provides trustees with at least          sixty days to take control of a case and to make appropriate          filings."). Rather, once Congress has weighed the competing policy          concerns affecting the scope of relief available under section          108(b), see supra note 14, we must abide its legislative decision          unless it infringes a constitutional mandate.  See Pressimone v.          Commissioner (In re Pressimone), 39 B.R. 240, 246 (N.D.N.Y. 1984)          ("Courts [invoking S 105(a)] . . . have expressed a laudable          concern for the rehabilitation of debtors . . . [but] in so doing          . . . have independently weighed the competing policy objectives at          stake, thereby substituting their own judgment for that of          Congress."). In the present circumstances, therefore, the                                         22          appropriate recourse for trustees in bankruptcy institutionally          overburdened by a S 413.134(f)(3) deadline, or for the creditor          interests adversely affected thereby, is not through 11 U.S.C. S          105(a), but congressional amendment of section 108(b), or a rule-          making modification to 42 C.F.R. S 413.134(f)(3),     see  id. S          1395x(v)(1)(O)(ii).                                         23                                         III                                     CONCLUSION                    Since Bankruptcy Code S 105(a) affords the bankruptcy          court no equitable power to extend the one-year HHS deadline          imposed by 42 C.F.R. S 413.134(f)(3), and its extension is          impermissible under Bankruptcy Code S 108(b) as well, the district          court judgment is  affirmed. The parties shall bear their own          costs.                     SO ORDERED.                                          24
