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IN RE TAYLORCRAFT AVIATION CORP.

May 7, 1947

In re TAYLORCRAFT AVIATION CORPORATION


The opinion of the court was delivered by: FREED; FRIEBOLIN

FREED, District Judge.

The petition of the United States Government for review of the order and amended order of Carl D. Friebolin, Referee denying priority of lien for taxes, to the petitioner, is denied. The findings, conclusions and opinion of the Referee herewith following, are approved.

 FRIEBOLIN, Referee.

 The Disinterested Trustee in a superceeded proceeding under Chap. X, having filed a Petition to Sell property of the Debtor free of liens, and the Martin Fireproofing Corporation and the United States Government having filed Answers thereto each claiming a lien upon the property: the Martin Fireproofing Corporation relying upon a mechanics lien and the United States Government relying upon a claim of priority by virtue of Sec. 3466, Rev. Stat. and also for a lien by virtue of sections 3640, 3641, 3670, Rev. Stat., *fn1" and the Martin Fireproofing Corporation and the Disinterested Trustee having filed an Answer denying the lien of the United States Government for taxes, and the Martin Fireproofing Corporation claiming that its lien is prior to any lien for taxes of the United States Government; now after hearing the evidence and examining briefs of counsel,

 It is found that:

 1. The Debtor herein filed a petition for reorganization under Chapter X of the Bankruptcy Act, 11 U.S.C.A. 501 et seq., on November 8, 1946, said petition being approved on November 13, 1946, and on the same date H. A. Hauxhurst and Jerome Curtis, were appointed Disinterested Trustees.

 2. On April 25, 1947 the Debtor was adjudicated a bankrupt and on May 27, 1947 Kenneth S. Thomson was chosen trustee in bankruptcy.

 3. On November 8, 1946, several hours prior to the filing of the Debtor's petition, the United States Government filed with recorder of Stark County, Ohio, notice of a lien for taxes as provided in Sec. 3672(a)(2), Title 26 U.S.C.A. Int. Rev. Code; the amount claimed as taxes, exceeds $ 1,000,000 for a period beginning in 1942.

 4. On November 20, 1946 Martin Fireproofing Corporation duly filed its affidavit for mechanics lien as provided in G.C.O. Sec. 8312 and following.

 5. The contract beween Martin Fireproofing Corporation and the debtor was dated April 24, 1946; the first labor and material was furnished on August 6, 1946 and the last on September 22, 1946.

 6. The assessments and demands upon the Debtor for payment of taxes were made by the Government at various dates and various amounts beginning August 14, 1946 and ending March 27, 1947 (Itemized: Government's Supplemental Answer filed April 28, 1947) Approximately $ 475,000 was so assessed and demand upon debtor made prior to November 20, 1946 (the date of filing of affidavit for mechanics lien) as also prior to November 8, 1946 (date of filing petition for reorganization).

 7. Martin Fireproofing Corporation complied in all respects with the statutory provisions of Ohio for obtaining a valid mechanics lien upon the property described in its affidavit for lien; that the first labor and material furnished by it upon the Debtor's property was August 6, 1946; the last was furnished September 22, 1946. The Affidavit for lien was thus filed (Nov. 22, 1946) within sixty (60) days after the last item was furnished.

 8. The United States Government complied in all respects with the applicable Federal Statutes for obtaining a lien upon the debtor's (now bankrupt's) property.

 Conclusion of Law.

 1. I conclude:

 That Martin Fireproofing Corporation has a valid mechanics lien upon the property described in its affidavit for mechanics lien in the sum -- ...


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