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The Bankruptcy Proceeding
In February of 1998, petitioner filed a petition for relief
under chapter 7 of the United States Bankruptcy Code, 11 U.S.C.
sections 101-1330 (2000), and received a discharge of
dischargeable debts on June 9, 1998.
Respondent’s Insolvency Section prepared and filed with the
bankruptcy court an original and an amended proof of claim, as an
unsecured priority claimant, on behalf of the Internal Revenue
Service (IRS).
During the bankruptcy case, the chapter 7 trustee applied to
the court for authority to pay State sales taxes incurred by the
estate, postpetition, as administrative expenses. No party filed
an objection to the trustee’s application.2
The trustee filed a notice of final report, and a final
report before distribution on February 16, 2001, showing that
after payments for the secured claim and for administrative
expenses, there would be nothing remaining in the estate for
distribution for unsecured priority claims and general unsecured
claims. No objection to the final report before distributions
was filed by any party. Therefore, respondent did not receive
any distribution from the bankruptcy estate for the prepetition
unsecured priority claim.
2 As it was later determined that the estate had no
liability for State sales taxes, they were not included in the
trustee’s final report of distribution.
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Last modified: May 25, 2011