Texas Comptroller of Public Accounts v. Megafoods Stores, Inc. (In re Megafoods Stores, Inc.)

The Texas Comptroller of Public Accounts (“Comptroller”) appeals the bankruptcy appellate panel’s decision affirming the bankruptcy court’s order. The order awarded post-petition interest on the Comptroller’s tax trust claim against debtor Megafoods Stores, Inc. at the four percent rate of interest actually earned. The Comptroller maintains the interest rate should be the twelve percent statutory rate allowed under Texas law. Debtor Megafoods Stores, Inc. cross-appeals that portion of the bankruptcy appellate panel’s holding affirming an award of $319,877.90 from the debtor’s general bank accounts in payment of the Comptroller’s statutory sales tax trust funds claim.

We find for the Comptroller as to the amount of interest and therefore reverse and remand with instructions to compute the interest under the Texas statutory rate of twelve percent from sixty days after the date the taxes were due to the date the taxes are paid. The statutory rate of interest shall be treated as an administrative expense of the bankruptcy estate. In addition, we instruct the lower court to award interest actually earned for the first sixty days after the date the taxes were due to be paid. As to…