Operating Expenses of Chapter 9 Municipal Debtor are not Administrative Expenses Protected by Section 503(b)

In a recent ruling in the Chapter 9 proceedings of the Off-Track Betting Corporation, the Bankruptcy Court for the Southern District of New York ruled that post-petition operating expenses of a Chapter 9 municipal debtor may not be awarded administrative priority pursuant to section 503(b) of the Bankruptcy Code. This decision serves as an important reminder to creditors of a Chapter 9 debtor that they may be afforded different and more limited rights in municipal debtor proceedings.