In Re Quality Sign Co., Inc.

ENTRY ON OBJECTION TO PLAN OF LIQUIDATION

ROBERT L. BAYT, Bankruptcy Judge.

This matter is before the Court on an objection filed by the United States of America, Internal Revenue Service (“IRS”), to the debtor’s Chapter 11 plan of liquidation. The basis of the objection concerns the status to be accorded pre-petition penalties on 11 U.S.C. Section 507(a)(7) priority tax debts. It is the debtor’s position that although this case is proceeding under Chapter 11 of Title 11, it is in the nature of a liquidation, not a reorganization, and therefore, the distribution rules of 11 U.S.C. Section 726…