In re International Filter Corp.

MEMORANDUM OF DECISION (OBJECTION TO CLAIM NOS. 50 AND 51; IRS/HUWEILER)

The Internal Revenue Service (“IRS”), an agency of the United States, filed two claims (designated herein as Nos. 50 and 51). Mr. and Mrs. Loren Huweiler (“Hu-weiler”) have filed a demand for subrogation rights to the extent of $49,536.56 of the amount claimed by the IRS for unpaid employment withholding taxes (Claim No. 50). Their claim of subrogation rights is founded on 11 U.S.C. § 509 .

The Debtor and Reorganized Debtor International Filter Corporation (“IFC”) and the IRS have previously stipulated that Claim No. 51 be allowed as a pre-petition, priority tax claim in the sum of $11,739.94. That stipulation has been approved, and all payments to the IRS are being applied first to Claim No. 51 pursuant to the Order Re Interim Disposition of Claim Nos. 50 and 51 of Internal Revenue Service, entered May 14, 1986.

Huweiler entered into a comprehensive Mutual General Release with IFC, executed and incorporated in the Debtor’s confirmed Third Modified Plan (“the Plan”). Huweiler (Class 5) was to receive $60,000.00 under the Plan. The Huweiler compromise was approved and the Plan confirmed after notice and…