                          PUBLISHED

UNITED STATES COURT OF APPEALS
               FOR THE FOURTH CIRCUIT


In Re: MIDWAY AIRLINES               
CORPORATION; In Re: MIDWAY
AIRLINES PARTS, LLC,
                         Debtors.


CIT COMMUNICATIONS FINANCE
                                     
CORPORATION,
                       Appellant,               No. 04-1502
                v.
MIDWAY AIRLINES CORPORATION;
MIDWAY AIRLINES PARTS, LLC,
                        Appellees,
JOSEPH N. CALLAWAY,
                 Trustee-Appellee.
                                     
           Appeal from the United States District Court
      for the Eastern District of North Carolina, at Raleigh.
             Terrence W. Boyle, Chief District Judge.
              (CA-03-642-5-BO3; BK-01-2319-ATS)

                     Argued: December 1, 2004

                       Decided: May 2, 2005

       Before NIEMEYER and MICHAEL, Circuit Judges,
       and Norman K. MOON, United States District Judge
              for the Western District of Virginia,
                     sitting by designation.
2                   IN RE MIDWAY AIRLINES CORP.
Reversed in part, affirmed in part, and remanded by published opin-
ion. Judge Michael wrote the opinion, in which Judge Niemeyer and
Judge Moon joined.


                             COUNSEL

ARGUED: Gregory Parker Chocklett, Raleigh, North Carolina, for
Appellant. Alan Dale McInnes, KILPATRICK STOCKTON, L.L.P.,
Raleigh, North Carolina, for Appellees. ON BRIEF: Gerald A. Jeut-
ter, Jr., KILPATRICK STOCKTON, L.L.P., Raleigh, North Carolina,
for Appellees.


                             OPINION

MICHAEL, Circuit Judge:

   In this bankruptcy case, filed under chapter 11 and later converted
to chapter 7, a lessor of personal property asserted an administrative
expense claim under § 365(d)(10) of the Bankruptcy Code for all pay-
ments due under the lease for the thirteen-month period beginning
sixty-one days after the order for relief and ending when the debtor
rejected the lease. The lessor also sought immediate payment of the
administrative expense. The bankruptcy and district courts determined
that the lessor was entitled to only a fraction of the amount due under
the lease and denied the request for immediate payment. We conclude
that § 365(d)(10) entitles the lessor to an administrative expense for
all lease payments due in the thirteen-month period. Immediate pay-
ment is not required, however.

                                  I.

   Under a lease agreement entered into in February 1999, Midway
Airlines Corporation (Midway) leased telephone equipment (or a tele-
phone system) from CIT Communications Finance Corporation
(CIT). The lease was to run for sixty months beginning on June 17,
1999. The monthly payment was $11,891.50, representing $11,218.39
in rent and $673.11 in reimbursement for state and county taxes. The
                     IN RE MIDWAY AIRLINES CORP.                        3
lease provided for payment of late fees, interest on late payments, and
reasonable attorney’s fees and costs for collection efforts. On August
13, 2001, in the Eastern District of North Carolina, Midway filed a
voluntary chapter 11 petition, which "constitute[d] an order for relief
under [that] chapter." 11 U.S.C. § 301. Midway’s bankruptcy petition
had been filed for more than a year when, on October 10, 2002, CIT
filed a motion to compel Midway to assume or reject the unexpired
telephone equipment lease. On November 25, 2002, a consent order
was entered allowing rejection of the lease. On December 20, 2002,
CIT filed a motion for the allowance of administrative expenses for
past due post-petition lease payments. CIT asserted that it was entitled
to (1) an administrative expense of $11,891.50 under § 503(b)(1)(A)
of the Code for Midway’s actual and necessary use of the telephone
equipment during the first sixty days after the order for relief was
entered and (2) an administrative expense of $199,426.35 under
§ 365(d)(10) for all rent, taxes, late fees, interest, and attorney’s fees
due under the lease for the thirteen months beginning sixty-one days
after the order for relief was entered (October 13, 2001) and ending
on the date the lease was rejected (November 25, 2002).

   The bankruptcy court declined to rule immediately on CIT’s
§ 503(b)(1)(A) claim, stating that an evidentiary hearing would be
needed to consider "both use and actual benefit to the bankruptcy
estate." J.A. 106. The court did rule definitively on the § 365(d)(10)
claim. First, the court concluded that the equities of the case justified
a reduced § 365(d)(10) allowance because (1) the telephone equip-
ment was of little use to Midway, and (2) CIT knew that Midway was
making only limited use of the equipment, "yet CIT made no effort
to seek adequate protection for the equipment until more than a year
after the order for relief." J.A. 106. As a result, the bankruptcy court
allowed CIT a § 365(d)(10) administrative expense for four months
of rent and taxes beginning sixty-one days after the order for relief.
For the remaining nine months, the court allowed CIT an administra-
tive expense only to the extent that Midway actually used and benefit-
ted from the equipment. Second, the bankruptcy court refused to
allow CIT any interest, late fees, or attorney’s fees. Third, the bank-
ruptcy court determined that CIT was not entitled to immediate pay-
ment because the court had deferred payment of other (allowed)
administrative expenses.
4                     IN RE MIDWAY AIRLINES CORP.
   CIT appealed the bankruptcy court’s order on the § 365(d)(10)
claim to the district court on July 11, 2003. On October 30, 2003,
Midway’s chapter 11 case was converted to chapter 7. See 11 U.S.C.
§ 1112. Later, on March 24, 2004, the district court affirmed the
bankruptcy court’s order with respect to the § 365(d)(10) claim. CIT
appeals, asking us to review only conclusions of law reached by the
bankruptcy and district courts. We review these conclusions de novo.
See Tavenner v. Smoot, 257 F.3d 401, 405 (4th Cir. 2001).

                                    II.

  CIT asserts on appeal that § 365(d)(10) entitles it to the full amount
due under the telephone equipment lease for the thirteen-month
period beginning sixty-one days after the order for relief was entered.
We agree for the following reasons.

                                    A.

   When a debtor is a lessee on the date of bankruptcy, the lease does
not automatically become an obligation of the estate. Rather, the
trustee (or debtor in possession) has the option to assume or reject the
lease. See 11 U.S.C. § 365(a); 2 William L. Norton, Jr., Norton Bank-
ruptcy Law & Practice 2d § 42:17 (2004). Section 362(a)’s automatic
stay prevents the lessor from recovering the property or terminating
the lease while the trustee is deciding whether to assume or reject it.
See 11 U.S.C. § 362(a); 2 Norton, supra, § 39:17. Moreover, during
this period the trustee can force the lessor to continue performing
under the lease. 2 Norton, supra, § 42:17. In the event the trustee ulti-
mately decides to assume the lease, and the lease is in default, the
trustee is required to cure the default or provide adequate assurance
that a prompt cure will be forthcoming. See 11 U.S.C. § 365(b)(1)(A).

   If the trustee decides to reject the lease, however, the Code does
not have a provision that requires the outright cure of any default.
Thus, if the lease is rejected, an issue arises as to the nature of the les-
sor’s remedy for recovering lease payments for the post-petition
period during which the trustee was deciding to reject the lease and
during which the estate possessed, and perhaps used, the property.
Prior to 1994 the lessor’s remedy was to file a claim for an adminis-
trative expense under § 503(b)(1)(A), which allows a lessor to recover
                      IN RE MIDWAY AIRLINES CORP.                       5
"the actual, necessary costs and expenses of preserving the estate."
Under § 503(b)(1)(A), however, a lessor is compensated only for the
estate’s actual and necessary use of the property; in other words, there
is no automatic entitlement to all payments due under the lease. See
Ford Motor Credit Co. v. Dobbins, 35 F.3d 860, 866 (4th Cir. 1994)
("[Section 503(b)(1)(A)] requires actual use of the creditor’s property
by the debtor, thereby conferring a concrete benefit on the estate
before a claim is allowable as an administrative expense.") (internal
quotation marks, citation, and emphases omitted); see also In re Mr.
Gatti’s, Inc., 164 B.R. 929, 932 (Bankr. W.D. Tex. 1994) ("[I]f the
lease was ultimately rejected, the estate was liable only for the period
of actual use and only to the extent of real benefit received by the
estate.").

   In 1994 Congress made it easier for lessors of personal property to
recover post-petition lease payments by adding § 365(d)(10) to the
Code. Section 365(d)(10) provides that:

      The trustee shall timely perform all of the obligations of the
      debtor, except those specified in § 365(b)(2), first arising
      from or after 60 days after the order for relief in a case
      under Chapter 11 of this title under an unexpired lease of
      personal property . . . until such lease is assumed or rejected
      notwithstanding § 503(b)(1) of this title, unless the court,
      after notice and a hearing and based on the equities of the
      case, orders otherwise with respect to the obligations or
      timely performance thereof.

11 U.S.C. § 365(d)(10). Section 365(d)(10) is modeled on a very sim-
ilar provision of the Code, § 365(d)(3), which requires that a trustee
timely perform all obligations under a lease of nonresidential real
property after an order for relief is entered. Notably, "[b]oth sections
impose a duty of timely performance on debtor[s] . . . and both
expressly specify that this duty exists ‘notwithstanding section
503(b)(1)’ of the Code." In re E. Agri-Sys., Inc., 258 B.R. 352, 354
(Bankr. E.D.N.C. 2000). As a result, in construing § 365(d)(10),
courts often look to decisions construing § 365(d)(3).1 See id.
  1
   These two provisions are not identical, however. Section 365(d)(10)
applies only to chapter 11 cases, whereas § 365(d)(3) is not limited by
6                     IN RE MIDWAY AIRLINES CORP.
   While it is clear that § 365(d)(10) and § 365(d)(3) impose on a
trustee the duty to perform all lease obligations in a timely manner,
these sections do not specify a lessor’s remedy should the trustee fail
to perform. Two lines of cases elaborate on the remedy available to
a lessor. The first line of cases (the majority interpretation) holds that
the lessor is entitled to an administrative expense for the missed pay-
ments under the lease. See Towers v. Chickering & Gregory, 27 F.3d
401, 404 (9th Cir. 1994); In re E. Agri-Sys., 258 B.R. at 354-55.
Under this interpretation a lessor is entitled to recover the total
amount of payments due under the lease, including rent, taxes, inter-
est, late fees, and attorney’s fees. See In re MUMA Svcs. Inc., 279
B.R. 478, 488-89 (Bankr. D. Del. 2002) (holding that § 365(d)(10)
allows recovery of taxes, late fees, and attorney’s fees to the extent
permitted by the lease); In re MS Freight Distrib., Inc., 172 B.R. 976,
978-79 (Bankr. W.D. Wash. 1994) (same for § 365(d)(3)); see also
Centerpoint Props. v. Montgomery Ward Holding Corp., 268 F.3d
205, 209 (3d Cir. 2001) ("The clear and express intent of § 365(d)(3)
is to require the trustee to perform the lease in accordance with its
terms."). According to the majority interpretation, "this administrative
expense claim arises directly under § 365(d) and, as specifically
stated in that statute, is independent from § 503(b)(1)." In re E. Agri-
Sys., 258 B.R. at 354. This interpretation rejects the argument that a
lessor is still required to assert an administrative expense claim under
§ 503(b)(1)(A), reasoning that "[b]y providing for timely performance
of all lease obligations, ‘notwithstanding section 503(b)(1),’ the stat-
ute has . . . granted priority payment status to the full amount of rent."
Towers, 27 F.3d at 404. If the majority interpretation was applied to
the present case, it would mean that CIT would be entitled to an
administrative expense for all rent, taxes, interest, late fees, and attor-
ney’s fees due for the thirteen-month period (an amount totaling
$199,426.35, according to CIT).

   The second line of cases (the minority interpretation) holds that
§ 365(d)(10) and § 365(d)(3) do not entitle the lessor to an adminis-
trative expense; rather, the sections merely impose obligations on the

chapter. Also, under § 365(d)(3) the trustee is required to perform all
lease obligations immediately upon the entry of an order for relief. Under
§ 365(d)(10) the trustee is not required to perform until sixty-one days
after the entry of an order for relief.
                     IN RE MIDWAY AIRLINES CORP.                       7
trustee. See In re Palace Quality Servs. Indus., Inc., 283 B.R. 868,
875 (Bankr. E.D. Mich. 2002); In re Mr. Gatti’s, 164 B.R. at 944.
According to the minority interpretation, if the trustee fails to perform
his obligations under either section, the lessor must seek relief by
invoking the more general remedies of the Code. For example, the
lessor may move to lift or modify the automatic stay or move to mod-
ify or terminate the debtor’s right to possession of the property. See
In re Mr. Gatti’s, 164 B.R. at 944. If the lessor wishes to assert a
claim against the estate for unpaid rent, it must apply for an adminis-
trative expense under § 503(b)(1)(A), seeking recovery for actual and
necessary use by the estate. See In re Palace Quality, 283 B.R. at 878.
If this interpretation was applied to the present case, it would mean
that CIT would have to assert an administrative expense claim under
§ 503(b)(1)(A), and recovery would be limited to an amount repre-
senting Midway’s actual and necessary use of the telephone system.

                                   B.

   The correct interpretation of § 365(d)(10), we conclude, lies some-
where between the majority and minority positions. We agree with
the majority interpretation’s ultimate conclusion that a lessor is enti-
tled to recover all payments due under the lease (including rent, taxes,
interest, late fees, and attorney’s fees) as an administrative expense if
(1) the trustee fails to perform its obligations under § 365(d)(10), and
(2) the court has not previously modified the trustee’s obligations pur-
suant to § 365(d)(10). The provision makes clear that a lessor is enti-
tled to the trustee’s performance of all obligations under the lease. We
disagree, however, with the majority interpretation’s conclusion that
§ 365(d)(10) somehow creates an administrative expense claim that is
distinct and independent from an administrative expense claim
asserted under § 503(b). Rather, we conclude that a lessor must still
assert its administrative expense claim under § 503(b); it simply does
not assert the claim under the specific provision of § 503(b)(1)(A).
This conclusion is consistent with the language of § 365(d)(10), and
it avoids creating ambiguities and conflicts with respect to other pro-
visions in the Code.

                                   1.

  Again, § 365(d)(10) imposes on a trustee the duty to perform all
obligations under a lease beginning sixty-one days after the entry of
8                    IN RE MIDWAY AIRLINES CORP.
an order for relief, but it does not specify the lessor’s remedy if the
trustee fails to perform. See 11 U.S.C. § 365(d)(10). We agree with
the minority interpretation that "[i]t is obvious that Congress knows
how to provide a specific remedy for breaches of Code obligations,
but does not necessarily choose to do so for each affirmative duty
imposed on a debtor." In re Mr. Gatti’s, 164 B.R. at 943. When a pro-
vision of the Code imposes an obligation on the debtor or trustee but
fails to provide the aggrieved party with a specific remedy, the
aggrieved party must resort to the more general remedies afforded by
the Code. Id. Thus, we agree with the minority interpretation’s gen-
eral proposition that a lessor’s remedy for a trustee’s failure to per-
form his obligations under § 365(d)(10) lies outside of § 365(d)(10);
specifically, it lies under § 503(b). See In re Palace Quality, 283 B.R.
at 878.

   However, we part ways with the minority interpretation’s ultimate
conclusion that a lessor’s remedy for seeking payments due under
§ 365(d)(10) is to assert an administrative expense claim under
§ 503(b)(1)(A). Requiring the lessor to proceed under § 503(b)(1)(A)
limits the amount the lessor can recover to a sum representing the
actual and necessary use by the estate. Though § 365(d)(10) does not
set forth the lessor’s remedy should the trustee fail to perform his
obligations, the section does indicate the relief that is available to the
lessor. Section 365(d)(10) provides that the trustee "shall timely per-
form all of the obligations of the debtor . . . notwithstanding section
503(b)(1)." 11 U.S.C. § 365(d)(10) (emphases added). The minority
interpretation’s conclusion that a lessor must assert a claim under
§ 503(b)(1)(A) (with recovery limited to an amount representing
actual and necessary use) goes against Congress’s instruction that a
lessor is entitled to the trustee’s performance of all lease obligations.
The conclusion is also at odds with the "notwithstanding section
503(b)(1)" proviso. As we will explain, § 365(d)(10) eliminates the
requirement of asserting an administrative expense claim under
§ 503(b)(1)(A) and instead allows the assertion of a claim under the
general provision of § 503(b) for recovery of all payments due under
the lease.

  We first examine the structure and nature of § 503, and then we
consider a lessor’s options prior to the enactment of § 365(d)(10).
Section 503(b) begins with the overarching directive that "[a]fter
                     IN RE MIDWAY AIRLINES CORP.                        9
notice and a hearing, there shall be allowed administrative expenses
. . . ." 11 U.S.C. § 503(b). The term "administrative expense" is not
defined in the Code, but courts agree that an administrative expense
has two defining characteristics: (1) the expense and right to payment
arise after the filing of bankruptcy, and (2) the consideration support-
ing the right to payment provides some benefit to the estate. See
Hicks, Muse & Co. v. Brandt, 272 B.R. 510, 512 (B.A.P. 1st Cir.
2002); Employee Transfer Corp. v. Grigsby, 831 F.2d 106, 110 (6th
Cir. 1987); Trs. of the Amalgamated Ins. Fund v. McFarlin’s, Inc.,
789 F.2d 98, 101 (2d Cir. 1986); In re Jartran, Inc., 732 F.2d 584,
587 (7th Cir. 1984); Cramer v. Mammoth Mart, Inc., 536 F.2d 950,
954 (1st Cir. 1976); see also Pa. Dept. of Envt’l Res. v. Tri-State Clin-
ical Labs., 178 F.3d 685, 689-90 (3d Cir. 1999) ("[T]he language of
§ 503(b), read as a whole, suggests a quid pro quo pursuant to which
the estate accrues a debt in exchange for some consideration neces-
sary to the operation or rehabilitation of the estate."). As a general
proposition, post-petition lease payments should have these two char-
acteristics because the right to payment arises after the filing of bank-
ruptcy, and the consideration supporting payment provides some
benefit to the estate (the estate uses, or has the opportunity to use, the
property). Nevertheless, not all post-petition lease payments were
recoverable by the lessor before § 365(d)(10) was enacted in 1994. A
lessor was prevented from the automatic recovery of the entire
amount due under the lease because of § 503(b) and its non-
exhaustive list of examples of administrative expense, one of which
is the broad category of "actual, necessary costs and expenses of pre-
serving the estate." 11 U.S.C. § 503(b)(1)(A). Before § 365(d)(10)
was inserted in the Code, it was well-established that a lessor had to
seek an administrative expense under § 503(b)(1)(A), which by its
plain language limited the lessor’s recovery to an amount representing
the estate’s actual and necessary use of the property. See 2 Norton,
supra, § 42:17.

   Section 365(d)(10) changed this by directing the trustee to "timely
perform all of the obligations" under a lease, "notwithstanding section
503(b)(1)." Thus, when a lessor seeks an administrative expense for
"all of the obligations" due under a lease, the "notwithstanding
§ 503(b)(1)" proviso in § 365(d)(10) relieves the lessor from proceed-
ing under § 503(b)(1)(A), which would limit the recovery to an
amount representing only the actual and necessary use by the estate.
10                    IN RE MIDWAY AIRLINES CORP.
Cf. Cukierman v. Uecker, 265 F.3d 846, 850 (9th Cir. 2001) ("[T]he
‘notwithstanding section 503(b)(1)’ proviso exempts the amount of
lease obligations that a trustee must timely pay under § 365(d)(3)
from § 503(b)(1)’s limitation of administrative expenses to the fair
value of the debtor’s use of the property."). The "notwithstanding
§ 503(b)(1)" language, however, does not exempt a claim for lease
payments due under § 365(d)(10) from the general ambit of § 503(b).
Section 365(d)(10) says only that a trustee "shall timely perform
. . . notwithstanding section 503(b)(1)." The proviso did not use the
broader language, "notwithstanding § 503(b)," which would have
exempted a claim for payments due under § 365(d)(10) from all
requirements of § 503(b). This reading is consistent with § 503(b)’s
terms, which contemplate that a bankruptcy court may award admin-
istrative expenses for claims other than those specifically listed in
§ 503(b)(1)-(6). See, e.g., In re White Motor Credit Corp., 50 B.R.
885, 892 (Bankr. N.D. Ohio 1985) (noting that the general provision
of § 503(b) can be read broadly to cover expenses incurred by mem-
bers of the official creditors’ committee).

   A claim for lease payments due under § 365(d)(10) is still a claim
for an administrative expense under § 503(b) because it bears the two
characteristics of an administrative expense (the right to payment
arises after the filing of the petition, and the estate receives beneficial
consideration because the estate has the opportunity to use the prop-
erty). A claim for unpaid lease payments is simply no longer asserted
as one of the listed examples of administrative expense (that is, as a
§ 503(b)(1)(A) expense), and thus a lessor is not limited to the recov-
ery of an amount representing only the actual and necessary use by
the estate. Instead, the lessor may recover an amount representing "all
of the obligations" under the lease.2 See 11 U.S.C. § 365(d)(10). In
enacting § 365(d)(10), Congress essentially made the determination
that the trustee must pay the full price (as reflected by the lease terms)
for the opportunity to use the property.
  2
   Our holding today is limited to the use of § 503(b) by a lessor of per-
sonal property to assert an administrative expense claim for lease pay-
ments that a trustee failed to make as required by § 365(d)(10). It does
not alter the general requirement that administrative expense claims
relating to the operation and preservation of the estate must be asserted
under § 503(b)(1)(A).
                     IN RE MIDWAY AIRLINES CORP.                       11
                                    2.

   There is a second, and more important, reason for concluding that
§ 365(d)(10) allows a lessor to recover an administrative expense
under § 503(b). Such a conclusion avoids the creation of ambiguities
and conflicts that result from applying the majority interpretation,
which holds that an administrative expense claim under § 365(d)(10)
is independent of § 503(b). First, it is not clear how the majority inter-
pretation arrives at the conclusion that an independent § 365(d)(10)
administrative expense claim is entitled to priority comparable to that
of a § 503(b) claim. See In re E. Agri-Sys., 258 B.R. at 354. Section
507 of the Code establishes the order of priorities for various types
of claims against the estate. First in priority are "administrative
expenses allowed under section 503(b)." 11 U.S.C. § 507(a)(1). Nota-
bly absent from the list of priorities is any reference to an independent
§ 365(d)(10) administrative expense. If, however, a claim for unpaid
lease payments due under § 365(d)(10) is an administrative expense
claim under § 503(b), then the claim has priority under § 507(a).

   Second, the majority interpretation’s conclusion that § 365(d)(10)
creates an administrative expense claim independent of § 503(b)
results in a conflict between § 365(d)(10) and § 348(d). When a case
is converted from chapter 11 to chapter 7, § 348(d) is triggered and
adjusts the priorities of claims against the estate that arise after the
order for relief was entered but prior to conversion. As a general rule
§ 348(d) mandates that claims arising after the order for relief but
before conversion are treated "for all purposes" as if they had arisen
immediately before the date of the filing of the petition. These claims
therefore lose their priority over other pre-petition claims. See 11
U.S.C. § 348(d). The only type of claim that § 348(d) specifically
excepts from its general rule is "a claim specified in section 503(b)."
Id. Thus, "claims specified in § 503(b) remain priority claims under
§ 507(a)(1) [after conversion]." In re E. Agri-Sys., 258 B.R. at 355.
However, even pre-conversion § 503(b) claims are subordinated to
post-conversion § 503(b) claims. See 11 U.S.C. § 726(b).

   Under the majority interpretation an administrative expense claim
for missed lease payments arises solely under § 365(d)(10), not under
§ 503(b). Because § 348(d) excepts only claims "specified in
§ 503(b)," it follows that an independent § 365(d)(10) claim should be
12                   IN RE MIDWAY AIRLINES CORP.
treated "for all purposes" as if it had arisen prior to the filing of the
bankruptcy petition once a case is converted from chapter 11 to chap-
ter 7. 11 U.S.C. § 348(d). After the conversion a § 365(d)(10) claim
would be equivalent in priority to pre-petition, unsecured claims but
subordinated to all other post-petition § 503(b) administrative expense
claims. The majority interpretation appears to acknowledge that it
would be strange for a § 365(d)(10) claim to lose its priority when a
case converts to chapter 7; to avoid this result, the majority interpreta-
tion simply concludes that a § 365(d)(10) claim retains its priority
after conversion because to hold otherwise would mean that
"§ 365(d)(10) would become a nullity in converted cases." In re E.
Agri-Sys., 258 B.R. at 355. The lack of a better explanation for how,
under the Code, an independent § 365(d)(10) administrative expense
claim retains its priority after conversion caused at least one court to
adopt the minority interpretation. See In re Palace Quality, 283 B.R.
at 878. Again, a lessor’s remedy under the minority interpretation is
to assert an administrative expense claim under § 503(b)(1)(A), "a
claim specified in section 503(b)." 11 U.S.C. § 348(d). Thus, a les-
sor’s claim under the minority interpretation always retains priority
by the terms of § 348(d).

   Our interpretation avoids the conflict between § 365(d)(10) and
§ 348(d) that results from applying the majority interpretation. As dis-
cussed above, § 365(d)(10) does not "creat[e] some type of quasi-
administrative claim that stands apart from administrative claims
allowed under Section 503." In re Macomb Occup. Health Care, LLC,
300 B.R. 270, 279 (Bankr. E.D. Mich. 2003). Rather, a claim for pay-
ments due under § 365(d)(10) is an administrative expense claim
asserted under § 503(b). Because § 348(d) preserves the priority of "a
claim specified in section 503(b)," the claim retains its priority after
conversion. In the present case CIT’s administrative expense claim
retains its priority status. However, as is the case with all chapter 11
administrative expense claims, it is subordinated to post-conversion
administrative expense claims by § 726(b). See In re E. Agri-Sys., 258
B.R. at 355.

   Third, a further problem with the majority interpretation is that it
fails to identify a logical procedural framework for asserting an inde-
pendent § 365(d)(10) administrative expense claim. Some courts fol-
lowing the majority view have concluded that § 365(d)(3) and (by
                     IN RE MIDWAY AIRLINES CORP.                      13
analogy) § 365(d)(10) administrative expenses "constitute[ ] . . .
administrative expense[s] without notice and a hearing." See, e.g., In
re Coastal Dry Dock & Repair Corp., 62 B.R. 879, 883 (Bankr.
E.D.N.Y. 1986); see also Calet Hirsch & Ferrell, Inc. v. Microvideo
Learning Sys., 254 B.R. 90, 93 (Bankr. S.D.N.Y. 1999). This conclu-
sion is unsubstantiated because § 365(d)(10) says nothing one way or
the other about the procedure for asserting a claim against the estate.
If a claim for payments due under § 365(d)(10) is a claim for an
administrative expense under § 503(b), however, a procedural frame-
work is already in place. Section 503(a) provides that "[a]n entity may
timely file a request for payment of an administrative expense, or may
tardily file such request if permitted by the court for cause." 11 U.S.C.
§ 503(a). Section 503(b) provides that a court may not award an
administrative expense claim until "[a]fter notice and a hearing."
Accordingly, our construction — that a claim for unpaid lease pay-
ments due under § 365(d)(10) is a § 503(b) administrative expense
claim — provides clear direction as to how such a claim is asserted,
considered, and determined.

                                   3.

   We turn now to the bankruptcy court’s equitable adjustment of
CIT’s administrative expense claim for lease payments covering the
thirteen months beginning sixty-one days after the order for relief.
Section 365(d)(10) mandates that after the sixty-day period, the
trustee shall timely perform all obligations under the lease "unless the
court, after notice and a hearing and based on the equities of the case,
orders otherwise with respect to the obligations or timely performance
thereof." 11 U.S.C. § 365(d)(10). The bankruptcy court concluded
that the equities justified reducing CIT’s administrative expense claim
because (1) the telephone equipment was of little use to Midway, and
(2) CIT knew that Midway was making only limited use of the equip-
ment, yet CIT did not seek adequate protection for more than a year
after the order for relief. As a result, the bankruptcy court allowed
CIT an administrative expense for only four months of rent and taxes.
As for the remaining nine months, the court allowed CIT an adminis-
trative expense only to the extent the telephone equipment was actu-
ally used by and benefitted Midway. The court refused to allow CIT
any interest, late fees, or attorney’s fees.
14                   IN RE MIDWAY AIRLINES CORP.
   The bankruptcy court erred because § 365(d)(10) does not allow a
court to make an equitable adjustment of the amount recoverable as
an administrative expense when the trustee fails to perform as
required by § 365(d)(10). Section 365(d)(10) requires that the trustee
timely perform all obligations under a personal property lease unless
the court, "based on the equities of the case, orders otherwise with
respect to the obligations or timely performance thereof." 11 U.S.C.
§ 365(d)(10). By its terms the statute allows a bankruptcy court to
modify only the trustee’s actual performance under § 365(d)(10),
including his ongoing obligation to make full payments under the
lease on a timely basis. This equitable modification provision allows
a court to modify both the amount the trustee must pay each install-
ment period and the timing of such payments. The provision does not,
however, authorize a bankruptcy court to make an equitable adjust-
ment of the amount recoverable as an administrative expense under
§ 503(b) should the trustee fail to make payments as they come due
under § 365(d)(10). In short, we read the equitable modification pro-
vision as authorizing a bankruptcy court to modify, based on the equi-
ties, a trustee’s responsibilities on a prospective basis only. A trustee
cannot remain idle after the sixty-day grace period, neither seeking
modification of nor fulfilling his obligations under the lease, and then
ask for a retroactive modification of his obligations when the lessor
seeks an administrative expense. See In re The Elder-Beerman Stores
Corp., 201 B.R. 759, 764 (Bankr. S.D. Ohio 1996) ("[W]here the
debtor has allowed the 60-day abeyance period to lapse yet fails to
challenge or fulfill its obligations, the court is reluctant to retroac-
tively apply any equitable analysis under § 365(d)(10)."). "To [allow
this] would be to dilute the duties Congress intended to impose upon
the debtor [or trustee] when the 60-day period was created." Id. This
interpretation is consistent with the overall purpose of § 365(d)(10),
which is to "shift to the debtor the burden of bringing a motion while
allowing the debtor sufficient breathing room after the bankruptcy
petition to make an informed decision." H.R. Rep. No. 103-835, at 50
(1994), reprinted in 1994 U.S.C.C.A.N. 3340, 3359.

   In the present case the bankruptcy court found that "Midway held
out great hope that it would be able to reorganize its debts and remain
a prominent local airline carrier. Consequently, Midway chose not to
reject its operating leases until absolutely necessary." J.A. 104. In
light of these goals and circumstances, Midway should have asked the
                     IN RE MIDWAY AIRLINES CORP.                      15
bankruptcy court to reduce its obligations under the lease immediately
after the grace period because it needed more time to decide whether
to assume the lease, but could not afford to make full payments.
Instead, Midway did nothing for thirteen months. Because
§ 365(d)(10) does not allow a bankruptcy court to modify, based on
the equities, a lessor’s administrative expense claim for payments
missed under § 365(d)(10), the bankruptcy court had no authority to
allow CIT an administrative expense for less than the full amount that
had become due under the lease.

                                  III.

   We finally consider CIT’s assertion that it is entitled to immediate
payment of its administrative expense, regardless of the administra-
tive solvency of the estate. CIT makes two separate arguments here.
First, it argues that a lessor who is allowed an administrative expense
against the estate for unpaid lease obligations due under § 365(d)(10)
is entitled to be paid before all other administrative expense creditors;
in other words, the lessor’s administrative expense claim has super-
priority over other administrative expenses of the estate. Second, CIT
argues that when a lessor is allowed an administrative expense pursu-
ant to § 365(d)(10) and § 503(b), it is entitled to immediate payment.
We reject both arguments.

   We turn first to CIT’s argument that its claim should be paid before
all other administrative expenses. Of course, the general rule is that
all administrative creditors in a bankruptcy case are to be treated
equally. See Cochise Coll. Park, Inc. v. Perry, 703 F.2d 1339, 1356
n.22 (9th Cir. 1983). "[I]f one claimant is to be preferred over others,
the purpose should be clear from the statute." Nathanson v. NLRB,
344 U.S. 25, 29 (1952). As discussed above, an administrative
expense claim seeking payments due under § 365(d)(10) is a claim
under § 503(b). Because there is no provision that entitles this type of
§ 503(b) administrative expense claim to any super-priority over other
pre-conversion § 503(b) claims, it is payable to the same extent as any
other pre-conversion administrative expense under § 503(b). See
Thomas Corp. v. Nicholas, 221 F.2d 286, 289 (5th Cir. 1955) ("[I]f
funds are insufficient to pay all [administrative expenses] they must
individually suffer pro rata." (internal quotation marks and citation
omitted)). Further, when a case is converted to chapter 7, a pre-
16                   IN RE MIDWAY AIRLINES CORP.
conversion § 503(b) administrative expense claim is explicitly subor-
dinated to a post-conversion § 503(b) claim. See 11 U.S.C. § 726(b).
We simply join the "large number of cases [that] require[ ] the lessor
to stand in line with other [administrative expense] claimants." In re
Joseph C. Spiess Co., 145 B.R. 599, 607-08 (Bankr. N.D. Ill. 1992).
It is not clear from the record whether the estate in this case is admin-
istratively insolvent. If it is, then CIT must bear its proportional bur-
den along with the other pre-conversion administrative expense
claimants. Further, because this case has been converted to chapter 7,
CIT’s allowance, like all pre-conversion administrative expenses
allowed under § 503(b), is subordinated to post-conversion adminis-
trative expenses allowed under § 503(b). See 11 U.S.C. § 726(b).

   We next consider CIT’s argument that it is entitled to immediate
payment of its allowed administrative expense. Here, we emphasize
once again that CIT’s claim is one under § 503(b) and, as such, is
governed by the rule that applies to all administrative expense claims
asserted under § 503(b), that is, that "the time of payment . . . is
within the discretion of the bankruptcy court." In re Am. Mgmt. Res.
Corp., 51 B.R. 713, 719 (Bankr. Utah 1985). "[N]either the Code nor
the Bankruptcy Rules prescribe[ ] the relative timing of payments
within a particular priority." 2 Norton, supra, § 42:14. While an
administrative expense under § 503(b) must be paid in cash on the
effective date of the plan in a chapter 11 proceeding, see 11 U.S.C.
§ 1129(a)(9)(A), and must be paid first upon a distribution of the
assets in a chapter 7 proceeding, see 11 U.S.C. § 726(a)(1), bank-
ruptcy courts have wide latitude in deciding whether to order payment
prior to these deadlines. "In most situations the courts prefer to post-
pone payment of the administrative claim until confirmation of a plan
or the distribution in a liquidation. However, once a claimant has
requested payment, the court may exercise its discretion whether cir-
cumstances warrant immediate response." 2 Norton, supra, § 42:14
(citation omitted). Accordingly, the decision whether to order imme-
diate payment of administrative expenses allowed pursuant to
§ 365(d)(10) and § 503(b) is left to the discretion of the bankruptcy
court. In the present case, the court determined that CIT was not enti-
tled to immediate payment because the bankruptcy court had deferred
payment of other allowed administrative expenses. This determination
was within the court’s discretion.
                    IN RE MIDWAY AIRLINES CORP.                     17
                                 IV.

   We reverse the district court’s order affirming the bankruptcy
court’s allowance to CIT of an administrative expense for less than
the full amount due from Midway under the telephone equipment
lease for the thirteen-month period beginning sixty-one days after the
order for relief and ending on the date the lease was rejected. CIT is
entitled to the full amount due for this period. (The exact amount will
be determined on remand.) We affirm the district court’s order affirm-
ing the bankruptcy court’s determination to defer payment of CIT’s
administrative expense. The case is remanded for further proceedings
consistent with this opinion.

                                               REVERSED IN PART,
                                               AFFIRMED IN PART,
                                                  AND REMANDED
