Page:United States Reports 502 OCT. TERM 1991.pdf/569

 502us2$27Z 01-22-99 08:37:00 PAGES OPINPGT

Cite as: 502 U. S. 410 (1992)

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Opinion of the Court valuation in contravention of the pre-Code rule that liens on real property pass through bankruptcy unaffected. Congress must have enacted the Code with a full understanding of the latter rule, and, given the statutory ambiguity here, to attribute to Congress the intention to grant a debtor the broad new remedy against allowed claims to the extent that they become “unsecured” for purposes of § 506(a) without mentioning the new remedy somewhere in the Code or in the legislative history is implausible and contrary to basic bankruptcy principles. Pp. 416–420. 908 F. 2d 588, affirmed. Blackmun, J., delivered the opinion of the Court, in which Rehnquist, C. J., and White, Stevens, O’Connor, and Kennedy, JJ., joined. Scalia, J., filed a dissenting opinion, in which Souter, J., joined, post, p. 420. Thomas, J., took no part in the consideration or decision of the case.

Timothy B. Dyk argued the cause for petitioner. With him on the briefs was Patricia A. Dunn. Richard G. Taranto argued the cause for respondents. With him on the brief were H. Bartow Farr III and Michael Z. Hayes. Ronald J. Mann argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Solicitor General Starr, Assistant Attorney General Gerson, Deputy Solicitor General Roberts, and Alan Charles Raul.* Justice Blackmun delivered the opinion of the Court. We are confronted in this case with an issue concerning § 506(d) of the Bankruptcy Code, 11 U. S. C. § 506(d).1 May 1 Section 506 provides in full: “(a) An allowed claim of a creditor secured by a lien on property in which the estate has an interest, or that is subject to setoff under section 553 of this title, is a secured claim to the extent of the value of such creditor’s interest in the estate’s interest in such property, or to the extent of the amount subject to setoff, as the case may be, and is an unsecured claim to the extent that the value of such creditor’s interest or the amount
 * Michael Fox Mivasair and Henry J. Sommer filed a brief for the Consumers Education and Protective Association, Inc., as amicus curiae urging reversal.