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IN RE PETITE AUBERGE VILLAGE, INC.

No. 79-3547.

650 F.2d 192 (1981)

In re PETITE AUBERGE VILLAGE, INC., Bankrupt. John P. STODD, Trustee, Plaintiff-Appellee, v. The STATE OF CALIFORNIA EMPLOYMENT DEVELOPMENT DEPARTMENT and State Board of Equalization, each agencies of the State of California, Defendants-Appellants.

United States Court of Appeals, Ninth Circuit.

Decided July 6, 1981.

Attorney(s) appearing for the Case

Herbert A. Levin, Los Angeles, Cal., for defendants-appellants.

Ralph G. Pagter, Santa Ana, Cal., on brief, for plaintiff-appellee.

Before DUNIWAY, Senior Circuit Judge, and PREGERSON and CANBY, Circuit Judges.

PREGERSON, Circuit Judge:

The sole issue on appeal is whether appellants, California Employment Development Department and State Board of Equalization, may collect tax penalties and post-bankruptcy petition interest out of the proceeds of sale of a bankrupt's liquor license. The district court held that tax penalties and post-petition interest may not be recovered. We affirm.

I.

On December 6, 1977, Petite Auberge Village, Inc. filed a petition under...

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