Matter of Special Abrasives, Inc.

OPINION

RAY REYNOLDS GRAVES, Bankruptcy Judge.

This proceeding seeks a determination of the rights of the parties as to funds in a certain escrow account; the escrowed money represents the proceeds of an account receivable which the account debtor, General Electric, paid to the escrow agent, Merrill, Lynch, Pierce, Fenner & Smith, pursuant to order of this Court. The facts are as follows.

On July 1, 1975, Michigan National Bank of Macomb (hereinafter referred to as the “Bank”) loaned $135,000 plus interest of $35,000 to Special Abrasives, Inc. (hereinafter referred to as “Special Abrasives”). On…