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IN RE MEDINA

BAP No. OR-95-1535, OR-95-1616 (Cross-Appeal), Bankruptcy No. 693-6202-PSH11.

205 B.R. 216 (1996)

In re Miguel MEDINA and Vicki Kathleen Medina, Debtors. UNITED STATES of America, Internal Revenue Service, Appellant and Cross-Appellee, v. OFFORD FINANCE, INC., Miguel Medina, and Vicki K. Medina, Appellees and Cross-Appellants.

United States Bankruptcy Appellate Panel of the Ninth Circuit.

Decided December 23, 1996.

Attorney(s) appearing for the Case

Virginia Cronan Lowe, U.S. Department of Justice, Tax Division, Washington, DC, for U.S. (I.R.S.).

Larry C. Hammack, Crain, Austin & Guy, Medford, OR, for Offord Finance, Inc.

Before: VOLINN, JONES, and HAGAN, Bankruptcy Judges.

OPINION

VOLINN, Bankruptcy Judge.

OVERVIEW

The Internal Revenue Service (IRS) moved for relief from the automatic stay to apply by way of set-off to the debtors' tax liability certain proceeds arising from contracts entered into between Medina Reforestation (Medina) and the United States Department of Agriculture (USDA). Appellee, Offord Financing, Inc. (Offord), which financed the debtors, claims priority to the payments against the IRS...

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