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IN RE KDI HOLDINGS, INC.

Bankruptcy No. 97 B 48529(AJG). Adversary No. 98/8471(AJG).

277 B.R. 493 (1999)

In re KDI HOLDINGS, INC., Kolpen Distributors, Inc., KDI Specialty Foods, Inc. and KDI Atlantic Foods, Inc., Debtors. The Official Committee of Unsecured Creditors of the Debtors, Plaintiff, v. Austin Financial Services, Inc. and Yehochai Schneider a/k/a Joseph Schneider, Defendants.

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

March 8, 1999.

Attorney(s) appearing for the Case

Finkel, Goldstein, Berzow, Rosenbloom & Nash, LLP, Neal M. Rosenbloom, of counsel, New York City, for Plaintiff.

Katten, Muchin & Zavis, Thomas F. Berner, of counsel, New York City, Katten, Muchin & Zavis, Jeff J. Marwil, Thomas J. Meier, Brian M. Graham, of counsel, Chicago, IL, for Defendant Austin Financial Services, Inc.

Luskin, Stern & Eisler, LLP, Michael Luskin, of counsel, New York City, for Defendant Joseph Schneider.

MEMORANDUM DECISION REGARDING MOTIONS TO DISMISS DIVERSITY PROCEEDING

ARTHUR J. GONZALEZ, Bankruptcy Judge.

On May 21, 1998, the Official Committee of Unsecured Creditors of the Debtors (the "Committee") commenced the above-captioned adversary proceeding against Austin Financial Services, Inc. ("Austin") and Yehochai Schneider a/k/a Joseph Schneider ("Schneider"). By this action, the Committee seeks the following relief (1) equitable subordination...

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