In re Salsbury Motors, Inc.

The within bankruptcy proceedings were commenced August 20, 1947, when the above named debtor filed a petition under Chapter XI of the Bankruptcy Act, 11 U.S.C.A. § 701 et seq.

During the bankruptcy proceedings the Collector of Internal Revenue filed a claim for Federal Insurance Contributions, withholding, Federal unemployment taxes and manufacturers’ excise tax in the sum of $27,-760.'58. The Collector of Internal. Revenue was scheduled as a preferred creditor and received notice of all proceedings. The claim of $27,760.58 was ordered paid by .the Referee and was subsequently paid by the Receiver.

The debtor proposed a Plan of Arrangement. After due notice to all creditors, including the Collector of Internal Revenue, a Second Amended Plan of Arrangement proposed by the debtor was confirmed on July 30, 1948, and the order has become final.

Article II of the second-amended plan of arrangment provided:

The Order Confirming Debtor’s Second Amended Plan of Arrangement provided in part:

Under the second amended plan of arrangement, the debtor corporation borrowed from the Bank of America National Trust & Savings Association $550,000, of which sum $500,000 was to be used to pay…