In Re Stonecipher Distributors, Inc.

MEMORANDUM OPINION ROBERT F. FUSSELL, Bankruptcy Judge. Findings of Fact and Conclusions of Law Now before the Court for decision is the issue of whether pre-petition interest due and owing the United States on unpaid taxes subject to priority pursuant to 11 U.S.C. § 507(a)(7) 1 should also be afforded priority status. The Bankruptcy Code accords priority status to certain “allowed secured claims of governmental units.” 11 U.S.C. § 507(a)(7) (emphasis added). “Claim,” as defined in 11 U.S.C. § 101(4), means a “right to payment.” This Court now concludes that the broad definition of “claim” includes a right to payment for the interest due. See, e.g., Matter of Keller & Katkowsky, P.C., 55 B.R. 155, 156 (Bkrtcy.E.D.Mich.1985); In re Treister, 52 B.R. 735, 737 (Bkrtcy.S.D.N.Y.1985); In re Coleman, 26 B.R. 825, 831 (Bkrtcy.D.Kan.1985) (debtor concedes priority claim under § 507(a)(6) [which is now § 507(a)(7) ] includes any interest that accrued on the claim pre-petition). See also In re Hernando Appliances, Inc., 41 B.R. 24 (Bkrtcy.N.D.Miss.1983) (discussing tax penalties as well as interest). Contra In re Razorback Ready-Mix Concrete Co., 45 B.R. 917 (Bkrtcy.E.D.Ark.1984). Thus, interest on the pre-petition priority tax claim of the United States is entitled to the same priority status as the tax claim under 11 U.S.C. § 507(a)(7). In reaching its holding, the Court specifically overrules its opinion in In re Razorback Ready-Mix Concrete Co., 45 B.R. at 924, as to its prior determination. This opinion is to be applied prospectively only. A separate Order in accordance with this opinion will be entered. Footnotes [1] Section 507(a)(7) was designated as 507(a)(6) prior to the Bankruptcy Amendments and Federal Judgeship Act of 1984.