UNITED STATES V. WHITING POOLS, INC.
462 U.S. 198 (1983)
NATURE OF THE CASE: The United States (D) challenged a decision of the Court of Appeals for the Second Circuit, which held that the Internal Revenue Service (IRS) was bound by the noncustodial provision of 11 U.S.C.S. 542(a), thereby requiring it to turn over to Whiting (P) debtor-in-possession property the IRS seized pursuant to a tax lien for delinquent taxes on a Chapter 11 reorganization.
FACTS: P owed approximately $92,000 in Federal Insurance Contribution Act taxes and federal taxes withheld from its employees, but had failed to respond to assessments and demands for payment by the IRS. A tax lien in that amount attached to all of P's property. The IRS seized P's tangible personal property. The estimated liquidation value of the property seized was, at most, $35,000, but its estimated going-concern value in P's hands was $162,876. P filed a petition for reorganization, under Chapter 11. The IRS moved in the Bankruptcy Court for a declaration that the automatic stay provision of the Bankruptcy Code, 362(a), is inapplicable to the IRS or, in the alternative, for relief from the stay. P counterclaimed for an order requiring the Service to turn the seized property over to the bankruptcy estate pursuant to 542(a) of the Bankruptcy Code. P intended to use the property in its reorganized business. The Bankruptcy Court determined that the IRS was bound by the automatic stay provision. The court directed the IRS to turn the property over to P on the condition that P provide the Service with specified protection for its interests. The District Court reversed, holding that a turnover order against the Service was not authorized by either 542(a) or 543(b)(1). The Court of Appeals for the Second Circuit reversed. The Supreme Court granted certiorari.
ISSUE:
RULE OF LAW:
HOLDING AND
DECISION:
LEGAL ANALYSIS:
Get
free access to the entire content for Mac, PC or Online
for 2-3 days and free samples
of all kinds of products.
https://bsmsphd.com
No comments:
Post a Comment