UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
ASHLAND BROKERAGE CO., INC. CASE NO. 82-10219
This matter came on for hearing before the Court upon the Objection to Claims filed herein by the Trustee on May 3, 1993, wherein the Trustee objected to the claims of the Commonwealth of Kentucky, numbered 10 and 13 in such Objection, and the Commonwealth of Kentucky having filed its Response to Objection to Claims herein on May 7, 1993, and the matter having been heard by the Court on June 3, 1993, the Court thereupon took the matter under advisement. The Trustee has objected to the within claims as untimely filed. The Commonwealth does not dispute the untimeliness of the filing of the claims herein. Apparently, the Commonwealth received appropriate notice of the filing of the within proceeding. The Trustee has not asserted any bad faith on the part of the Commonwealth.
Two relevant Sixth Circuit cases compel this Court to the conclusion that the Objection to the Claims of the Commonwealth should be overruled. U.S. v. Cardinal Mine Supply, Inc., 916 F.2d 1087 (Sixth Circuit 1990); In re Century Boat Company, 986 F.2d 154 (Sixth Circuit 1993). While the issue in both those cases involved claims filed wherein the Internal Revenue Service was not given initial notice of the filing, a reading of both decisions compels the Court to conclude that, in the absence of bad faith and prejudice to other creditors, and where no distribution has been made in a Chapter 7 proceeding, "There are valid reasons for permitting all tardily filed priority claims to be paid whether or not the creditor had notice." United States v. Cardinal Mine Supply, at page 1091. Additionally, a reading of the Century Boat case reveals that there was a delay of approximately two years after the Internal Revenue Service became aware of the bankruptcy proceeding before they filed their claim. In this case, the delay was not as lengthy as in the Century Boat case.
A separate Order will be entered in this matter.
Dated this _______ day of June, 1993.
BY THE COURT
Joseph M. Scott, Esq.
Donald S. Guier, Esq.
U. S. Trustee