In Re Petite Auberge Village, Inc.

650 F.2d 192 7 Bankr.Ct.Dec. 1241 , Bankr. L. Rep. P 68,322 In re PETITE AUBERGE VILLAGE, INC., Bankrupt. John P. STODD, Trustee, Plaintiff-Appellee, v. The STATE OF CALIFORNIA EMPLOYMENT DEVELOPMENT DEPARTMENT and State Board of Equalization, each agencies of the State of California, Defendants-Appellants. No. 79-3547. United States Court of Appeals, Ninth Circuit. Argued and Submitted May 5, 1981. Decided July 6, 1981. Herbert A. Levin, Los Angeles, Cal., for defendants-appellants. Ralph G. Pagter, Santa Ana, Cal., on brief, for plaintiff-appellee. Appeal from the United States District Court for the Central District of California. Before DUNIWAY, Senior Circuit Judge, and PREGERSON and CANBY, Circuit Judges. PREGERSON, Circuit Judge: 1 The sole issue on appeal is whether appellants, California Employment Development Department and State Board of Equalization, may collect tax penalties and post-bankruptcy petition interest out of the proceeds of sale of a bankrupt's liquor license. The district court held that tax penalties and post-petition interest may not be recovered. We affirm. I. 2 On December 6, 1977, Petite Auberge Village, Inc. filed a petition under Chapter XI of the…