Opinion
Case No. 96-45295-JFQ, Adversary Proceeding No. 00-04216
June 5, 2001
FINDINGS OF FACT, CONCLUSIONS OF LAW AND JUDGMENT
Based on the uncontroverted facts alleged by the Plaintiff in his motion for summary judgment and the legal arguments contained therein, the Court makes the following findings of fact and conclusions of law, and issues the following judgment.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. At the time of the conversion of Debtor Toros Matellian's case from Chapter 11 to Chapter 7, the Debtor was the owner, as tenant in common with Defendants Grace Matellian and Mihran Matellian as Trustees of the Matellian Family Trust of two parcels of real property located at 141 Milford Road, Upton, Massachusetts ("Milford Road") and One North Main Street a/k/a Church Street, Upton, Massachusetts ("North Main" together with Milford Road, the "Properties"). The Debtor held a one-half interest in the Properties and Grace Matellian and Mihran Matellian, as Trustees, held the remaining one-half interest.
2. On September 1, 1998 a Notice of Federal Tax Lien Under Internal Revenue Laws (the "Tax Lien") was recorded in the Worcester District Registry of Deeds by the IRS against "Grace Matellian and Mihran Matellian, as Trustees of Matellian Family Trust, as Transferees of Mihran Matellian." The Tax Lien secured a payment obligation as of August 28, 1998 of $761,751.22.
3. On March 29, 2000, this Court entered an Order in the action styled Stephan M. Rodolakis, Chapter 7 Trustee vs. Grace Matellian and Mihran Matellian in their capacity as Trustees for the Matellian Family Trust et al, Adversary Proceeding 00-4028 permitting the Trustee to sell the Properties free and clear of the interest of the co-tenant, Matellian Family Trust, pursuant to 11 U.S.C. § 363(h), among other relief.
4. On June 5, 2000, this Court entered an Order approving the sale of the Properties to MH Realty Associates, Inc., a Debtor related entity, for total consideration of $450,000.00.
5. On or about June 30, 2000, the transaction with MH Realty Associates, Inc. was consummated and the Trustee became the holder of sale proceeds.
6. The Trustee incurred various costs and expenses totaling $53,619.00 relative to the sale of the Properties, including appraisal fees, brokerage commission, legal fees, and seller closing costs.
7. One-half of such costs and expenses may be deducted, pursuant to 11 U.S.C. § 363(j), from the sale proceeds attributable to the interests of the Matellian Family Trust in the Properties prior to disbursement of funds on account of the sale of the interests of the Matellian Family Trust in the Properties.
8. After deduction of the foregoing expenses of sale, the resulting net amount of sale proceeds attributable to the interests of the Matellian Family Trust is $198,190.50.
9. As the Tax Lien had been recorded prior to the time of the sale of the Properties, the interests of the Matellian Family Trust therein were encumbered by a lien in favor of the IRS. See, generally In re Tourville, 216 B.R. 457 (Bankr. D. Mass. 1997) and cases and statutes cited therein. (extensive reach of IRS liens). Pursuant to the order approving the sale of the Properties, the Tax Lien attaches to the proceeds of sale.
10. It appearing that the Tax Lien was properly recorded, the net sale proceeds attributable to the interests of the Matellian Family Trust should be paid to the IRS. Butler v. BayBank Middlesex, 169 B.R. 484 (D. Mass. 1994).
JUDGMENT
NOW THEREFORE, based upon the foregoing findings of fact and conclusions of law, is hereby
ORDERED and ADJUDGED that the fees and expenses incurred by the Trustee in liquidating the Properties is $53,619.00, and pursuant to 11 U.S.C. § 363(j) said sum may be deducted from sale proceeds prior to disbursing any funds to the benefit of the interests of the Matellian Family Trust in the Properties. It is further
ORDERED and ADJUDGED that the Trustee is hereby directed, within thirty days of the date hereof, to pay to the United States of American, Internal Revenue Service, the sum of $198,190.50, said payment to be in full and complete satisfaction of any claims of the Matellian Family Trust and the IRS to that portion of the proceeds of the sale of the Materllian Family Trust's interests in the Properties.
It is further ORDERED and ADJUDGED that this judgment is a final order disposing of all claims and counterclaims asserted in the above litigation.