UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF KENTUCKY

COVINGTON

IN RE:

RONALD W. FULTON CASE NO. 92-21607

DEBTOR

OPINION

This matter is before the Court upon the Motion of the Debtor herein filed August 11, 1994 to order the Mason County ASCS to release $4,500.00 plus interest of funds allegedly belonging to the Debtor which have been withheld by the creditor. Apparently these funds were received by the Mason County ASCS as a result of its claimed lien on the 1992 tobacco crop of the Debtor. The ASCS claims a lien on this crop and the proceeds as a result of a penalty of $4,595.48 assessed against the Debtor relating to the 1991 tobacco crop of the Debtor.

The Mason County ASCS received two payments totalling $4,595.48 shortly after the Debtor filed this Chapter 13 proceeding.

The Debtor filed an Amended Repayment Plan in this proceeding on March 5, 1993. That Plan calls for 100% payment of all creditors and, upon confirmation, calls for restoration of the Debtor's property to the Debtor. That Plan was confirmed on September 20, 1993 by an Order of this Court.

A claim was filed herein by the Kentucky State ASCS Office, apparently on behalf of the Mason County ASCS, in the amount of $1,676.80 reflecting application of $4,595.48 received from the lien claimed on the tobacco. That claim was filed on March 15, 1993.

Clearly, the tobacco or a receivable generated by the tobacco was an asset of the estate upon the filing of the petition in this matter. 11 U.S.C. '541(a). It further appears that the receipt, post-petition, and application of the proceeds from the tobacco to the pre-petition debt violates the automatic stay. 11 U.S.C. '362(a)(3), (4) and (5). Further, the Plan provides for 100% payment of secured creditors and unsecured creditors and restoration of the estate property to the Debtor. Since the estate property included these tobacco funds, it appears that these funds should be restored to the Debtor in accordance with the Motion.

The Opinion herein is without prejudice to the rights of Mason County ASCS to amend its claim to reflect a corrected balance and, if appropriate, a classification of the claim other than as unsecured. The Court does not have before it sufficient information to allow the Court to evaluate whether or not the claim is secured or unsecured at this point and reserves that matter for later consideration if necessary.

A separate Order will be entered.

Dated this _____ day of ___________________, 1994.

BY THE COURT

____________________________

JUDGE

COPIES TO:

Edward S. Monohan, Esq.

David E. Middleton, Esq.

David Bunning, Esq.

Sidney N. White, Esq.

U. S. Trustee

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