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The Bankruptcy Proceedings
In June of 1995, three involuntary bankruptcy proceedings
under chapter 7 of the Bankruptcy Code, 11 U.S.C. sections 101-
1330 (2000), were commenced against Mr. Balser, Mrs. Balser, and
HDI, respectively, in the U.S. Bankruptcy Court for the Western
District of Washington (bankruptcy court). Subsequently, the
bankruptcy court substantively consolidated the involuntary
bankruptcy proceedings and converted them into proceedings under
chapter 11 of the Bankruptcy Code (consolidated bankruptcy
cases). Mr. Balser was the president of HDI at the time the
consolidated bankruptcy cases were filed.
Respondent filed with the bankruptcy court proofs of claim
and amended proofs of claim against petitioners for unpaid income
taxes for 1992 and 1993. Respondent also requested payment for
administrative expenses relating to postpetition income taxes,
including 1996.
On May 12, 1999, HDI filed an objection to “tax
liabilities”. Petitioners did not file any other objections to
respondent’s claims or requests for payment of administrative
expenses. No order disallowing respondent’s claims was entered
in the consolidated bankruptcy cases.
On June 18, 1999, the bankruptcy court confirmed the
Debtors’ Joint Plan of Reorganization (plan). Respondent
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Last modified: November 10, 2007