United States v. Paul W. Sampsell, Trustee in Bankruptcy of F. P. Newport Corporation, Ltd., Bankrupt

The opinion in the above entitled case is withdrawn, and the following opinion is hereby filed. The pending petition for a rehearing is dismissed. A petition for rehearing of the case on the substituted opinion may be filed or submitted upon the briefs heretofore -submitted as to the original petition.

This case is back after a remand, United States v. Sampsell, 224 F.2d 721 , and it involves the same question as on the prior appeal, i. e., the liability for income taxes of the trustee in bankruptcy after an order of liquidation has been made. The original appeal involved taxes for the year 1952. This appeal also involves the 1953, 1954 and 1955 tax years.

The bankrupt was a corporation in the realty business and was adjudged a bankrupt in 1937. A trustee in bankruptcy, Metcalf, was appointed, and he assumed control over the assets of the corporation consisting mostly of real estate. In 1950 Sampsell, the appellee (hereinafter called Trustee), was appointed as successor trustee in bankruptcy.

Prior to 1951, sale of the real estate held by the Trustee was difficult because of the rights of certain of the creditors, and very little of the property was sold up to that time. By…