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MATTER OF HALUX, INC.

No. 81-1552.

665 F.2d 213 (1981)

In the Matter of HALUX, INC., d/b/a Midwestern Cultured Marble, Inc., Debtor. NORTHWESTERN NATIONAL BANK OF ST. PAUL, Appellant, v. HALUX, INC., Appellee.

United States Court of Appeals, Eighth Circuit.

Decided December 2, 1981.

Attorney(s) appearing for the Case

Richard D. Donohoo, argued, and Maun, Green, Hayes, Simon, Johanneson & Brehl, St. Paul, Minn., for appellant Northwestern Nat. Bank of St. Paul.

Steven B. Nosek, argued, and Larry B. Ricke, Wagner, Johnston & Falconer, Ltd., Minneapolis, Minn., for appellee Halux, Inc.

Before HEANEY and STEPHENSON, Circuit Judges, and DAVIES, Senior District Judge.

HEANEY, Circuit Judge.

This matter is an appeal from a district court order affirming the bankruptcy court. We reverse and remand.

I.

In Spring, 1977, Preferred Financial Corporation executed two agreements to lease a conveyor system and a telephone system to Halux, Inc. Preferred subsequently assigned both leases to Northwestern National Bank of St. Paul.

On August 31, 1979, Halux filed a petition for bankruptcy under the Bankruptcy

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