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IN RE McLEAN INDUSTRIES, INC.

95 CIV. 6898 (DLC).

196 B.R. 670 (1996)

In re McLEAN INDUSTRIES, INC., et al., Debtors. UNITED STATES LINES, INC. and United States Lines (S.A.), Inc., Reorganization Trust, as Successor in Interest to United States Lines (S.A.) Inc., Plaintiffs, v. UNITED STATES of America and Chemical Bank, in its capacity as depository, Defendants.

United States District Court, S.D. New York.

June 6, 1996.

Attorney(s) appearing for the Case

Frank W. Hunger, Assistant Attorney General, J. Christopher Kohn, Tracy J. Whitaker, John T. Stemplewicz, Civil Division, United States Department of Justice, Washington, DC, for Defendants-Appellants.

Robert D. Drain, Cynthia E. Cunningham, Paul, Weiss, Rifkind, Wharton & Garrison, New York City, for Plaintiffs-Appellees.

OPINION & ORDER

COTE, District Judge:

The United States of America, on behalf of the Maritime Administration of the Department of Transportation ("MARAD") brings this appeal from the Bankruptcy Court's Order entered June 27, 1995. The primary issue presented by this appeal is whether MARAD, the recipient of an avoidable preference from the debtor in this action, must disgorge the preference before pursuing a

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