## Facts

- Russell E. Sinclair, Sr. and M. Marguerite Sinclair owned a family farm and filed a bankruptcy petition under Chapter 11 in April 1985.
- In October 1986, Congress enacted legislation creating Chapter 12 (family farmer reorganization).
- After Chapter 12 became effective, the Sinclairs moved to convert their pending Chapter 11 case to Chapter 12.
- The governing provision, § 302(c)(1) of the 1986 Act, states that the Chapter 12 amendments “shall not apply” to cases commenced under title 11 before the Act’s effective date.
- The Sinclairs relied on a conference committee report stating conversions should not be routine but could be allowed in a court’s discretion where equitable.

## Issues

1. Whether § 302(c)(1) permits conversion of a bankruptcy case commenced before Chapter 12’s effective date from Chapter 11 to Chapter 12.
2. Whether legislative history may override unambiguous statutory text that appears to bar such conversions.

## Decision

- The Seventh Circuit affirmed the denial of conversion.
- The court held § 302(c)(1) plainly bars applying Chapter 12 to cases commenced before the effective date, making conversion unavailable for the Sinclairs’ case.
- The court rejected reliance on the conference report because it contradicted, rather than clarified, the enacted statutory language.

## Legal Principles

- When statutory text is clear, courts apply its plain meaning even if legislative history points in a different direction.
- A statement that amendments “shall not apply” to cases commenced before an effective date bars applying the new chapter to those pending cases, including by conversion.
- Legislative history is interpretive aid, not law; it cannot amend or negate enacted text through judicial construction.
- Ambiguity must arise from the statutory language itself, not from conflict between text and external materials.

## Conclusion

The court held that Chapter 12 relief was unavailable by conversion for cases filed before Chapter 12’s effective date because § 302(c)(1) expressly barred applying the Chapter 12 amendments to such cases, and conflicting committee-report language could not displace the statute’s unqualified text.


In re Sinclair, 870 F.2d 1340 (7th Cir. 1989)