In Re All Chemical Isotope Enrichment, Inc., Doing Businessas Alchemie, Debtor.anderson County Bank, Plaintiff v. John P. Newton, Jr., Trustee, Defendant-appellant,united States of America, Defendant-appellee, 983 F.2d 1065 (6th Cir. 1993)

This is an appeal of the decision of the United States District Court affirming the holding of the United States Bankruptcy Court that the escrow funds, including the post petition interest, held in the Anderson County Bank, were not a part of the debtor's estate.

All Chemical Isotope Enrichment, Inc. filed a Chapter 11 petition in the bankruptcy court for the Eastern District of Tennessee. The action was thereafter converted to a Chapter 7 proceeding with John P. Newton appointed as Chapter 7 Trustee. When it became necessary for the Anderson County Bank to determine the ownership rights to a $2,000,000 escrow fund, a Complaint was filed naming the Trustee, the United States of America and its Department of Energy as defendants. The defendants each asserted superior rights in counter claims and cross claims. The Trustee insisted that the fund was an asset of the bankrupt Alchemie's estate. Also at issue was who had entitlement to the post petition interest earned since August 15, 1989 on the $2,000,000.

Bankruptcy Judge Richard Stair Jr. held that the fund was not property of the estate but rather belonged to the United States. He further held that the post petition interest was, likewise, the property of the United States. An appeal was taken to the United States District Court for the Eastern District of Tennessee. In a Memorandum Opinion and Order, the district court affirmed the decision of the bankruptcy court.

Upon careful consideration of the record, and the issues presented in the appellate briefs and the argument of counsel, we find no error by the district court warranting reversal. Therefore we AFFIRM the decision of the District Court.