In Re Deer Park, Inc., AKA Deer Park Ski Area, Debtor, United States Internal Revenue Service v. Creditors Committee Deer Park, Inc.

This is an appeal from the Bankruptcy Appellate Panel’s (“BAP”) decision in United States v. Deer Park, Inc. (In re Deer Park, Inc.), 136 B.R. 815 (9th Cir. BAP1992). The BAP affirmed an allocation order of the bankruptcy court which required the Internal Revenue Service (“IRS”) to credit pay- *1480 merits, made to it in a liquidating plan of reorganization under Chapter 11 of the Bankruptcy Code, first to the withholding tax trust fund portion of the debtor’s tax liability. Sufficient payments were made to satisfy this trust fund portion of the IRS’s claim, but approximately $20,000 of the claim remained unpaid. The effect was that the debtor’s president was relieved of his personal liability for payment of the trust fund taxes, while the IRS had only a possibility that the full amount of its claim would be paid.

The IRS. appeals. We have jurisdiction under 29 U.S.C. § 158 (d) (1988), and we affirm.

FACTS

Deer Park, Inc. (“Deer Park”) developed and built a ski resort at Lake Tahoe, California. Gerhard Stoll was Deer Park’s president and controlling shareholder from 1980 until September, 1983, when Poma of America, Inc. (“Poma”), a secured creditor of Deer Park, gained control…

dissenting:

I submit that the tax allocations ordered by the bankruptcy court in this case are not permitted by United States v. Energy Resources Co., 495 U.S. 545 , 110 S.Ct. 2139 , 109 L.Ed.2d 580 (1990) and the bankruptcy court therefore was without jurisdiction.

The Creditors Committee’s First Amended Plan of Reorganization recognized the fact that the ski lifts operated by the debtor corporation had been removed and it was no longer possible for the debtor to operate or reorganize.

The only course of action available was a complete liquidation of the debtor and sale of all assets to an adjoining ski resort (Alpine Meadows Ski Corporation). The sales agreement with Alpine, dated 1984, provided that if Alpine resold the Deer Park assets within five years, Alpine would pay Deer Park 50% of the sales price exceeding $275,000 (Alpine’s purchase price for Deer Park). It also provided that, if within 10 years, a part of the Deer Park property was used for downhill skiing, Alpine would pay additional compensation based on net receipts, except that if any part was used for downhill skiing from the existing Alpine Meadows area, then additional compensation would not be paid. This…

10 F.3d 1478 73 A.F.T.R.2d 94 -501, 62 USLW 2375 , 94-1 USTC P 50,074, 30 Collier Bankr.Cas.2d 440 , 25 Bankr.Ct.Dec. 25 , Bankr. L. Rep. P 75,671 In re DEER PARK, INC., aka Deer Park Ski Area, Debtor, UNITED STATES INTERNAL REVENUE SERVICE, Appellant, v. CREDITORS COMMITTEE; Deer Park, Inc., Appellees. No. 92-15802. United States Court of Appeals, Ninth Circuit. Argued and Submitted Oct. 6, 1993. Decided Dec. 6, 1993. Gary D. Gray and James A. Bruton, Tax Div., U.S. Dept. of Justice, Washington, DC, for appellant. Gerald F. Ellersdorfer, San Francisco, CA, for appellees. Appeal from the Ninth Circuit Bankruptcy Appellate Panel. Before: FERGUSON, THOMPSON and O'SCANNLAIN, Circuit Judges. DAVID R. THOMPSON, Circuit Judge: 1 This is an appeal from the Bankruptcy Appellate Panel's ("BAP") decision in United States v. Deer Park, Inc. (In re Deer Park, Inc.), 136 B.R. 815 (9th Cir. BAP1992). The BAP affirmed an allocation order of the bankruptcy court which required the Internal Revenue Service ("IRS") to credit payments, made to it in a liquidating plan of reorganization under Chapter 11 of the Bankruptcy Code, first to the withholding tax trust fund portion of the debtor's tax…