In re Park Rug Shops Stores, Inc.

This is a motion to settle the account of the assignee for the benefit of creditors and for related relief. The Department of Finance of the City of New York and the Industrial Commissioner for New York State unemployment insurance taxes seek an order directing the assignee to pay the tax claims of aforesaid governmental agencies before paying-claims of customer depositors.

Section 574 of the Labor Law provides for priority of State and city taxes, on a parity basis, over all other claims except taxes due the United States and wages. Section 22 of the Debtor and Creditor Law of the State of…