Zimmerman v. CDM Properties, Inc. (In Re Cobb & Lawless Kitchens, Inc.)

OPINION

EMIL F. GOLDHABER, Chief Judge:

The proposition advanced under the trustee’s complaint, is whether the Internal Revenue Service (“the IRS”) may levy, though not seize, the debtor’s interest in property held in custodia legis by a clerk of a state court. On the basis of the reasons outlined below, we conclude that the levy was effective and we will direct the prothonotary of the state court to disburse the funds to the IRS.

The facts of this case are as follows: 1 A contractor, CDM Properties, Inc. (“CDM”), contracted in 1980 with a subcontractor (“the debtor”) for the repair and…