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IN RE LAIZURE

BAP No. EC-06-1112-BMOS, Bankruptcy No. 05-16444-A-7, Adversary No. 05-01374-D.

349 B.R. 604 (2006)

In re Charles LAIZURE and Judy Laizure, Debtors. Busseto Foods, Inc., Appellant, v. Charles Laizure, Appellee.

United States Bankruptcy Appellate Panel for the Ninth Circuit.

Filed — September 1, 2006.

Attorney(s) appearing for the Case

Kristine Kelly, Fresno, CA, for Debtors.

Before: BRANDT, MONTALI, and SMITH, Bankruptcy Judges.

Argued and Submitted on July 21, 2006 at Sacramento, California.

OPINION

BRANDT, Bankruptcy Judge.

Debtor made the final payment on his settlement of an embezzlement claim within 90 days of filing his bankruptcy petition. The chapter 71 trustee demanded repayment from the appellant, which settled for a reduced amount. Before making payment, appellant filed a complaint against debtor asserting that its claim against

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