In Re Hovan, Inc.

96 F.3d 1254 36 Collier Bankr.Cas.2d 1264 , 29 Bankr.Ct.Dec. 1006 , Bankr. L. Rep. P 77,089 , 30 UCC Rep.Serv.2d 832 , 96 Cal. Daily Op. Serv. 7128 , 96 Daily Journal D.A.R. 11 ,691 In re: HOVAN, INC., Debtor. STATE OF WASHINGTON, EMPLOYMENT SECURITY DEPARTMENT; Revenue Department; Labor and Industries Department, Appellants, v. HOVAN, INC., Appellee, Bankruptcy Appeals Clerk, Real-party-in-interest. No. 95-35491. United States Court of Appeals, Ninth Circuit. Argued and Submitted Aug. 8, 1996. Decided Sept. 24, 1996. Zachary Mosner, Assistant Attorney General, State of Washington, Seattle, Washington, for appellants. Wanda Jean Reif Nuxoll and Francois L. Fisher, Weinstein, Fischer, Riley, Erickson & Wolf, Seattle, Washington, for debtor/appellee. Appeal from the United States District Court for the Western District of Washington, William L. Dwyer, District Judge, Presiding. D.C. No. CV-94-01833-WLD. Before: BEEZER and O'SCANNLAIN, Circuit Judges; BROWNING, * District Judge. O'SCANNLAIN, Circuit Judge: 1 We must decide whether certain state tax obligations are punitive or compensatory for the purpose of determining the priority of bankruptcy claims. 2 * The State of…