In re McLean Hotels, Inc. ( 1989 )

FRANK W. ROGER, Bankruptcy Judge.

MEMORANDUM OPINION

Debtor was formerly known as Show Me Lodges, Inc. Debtor’s witness could not identify at what date its name was changed. In any event, debtor filed a California Corporation Franchise or Income Tax Return for the period of September 1, 1983 through August 31,1984, Said return was prepared by Laventhol & Horvath, debtor’s outside certified public accountants. Said return was signed by Lee McLean, Jr. The return identified him as president of the debtor but the debtor’s witness stated that he was chairman of the board. The return requested refund of $7,786.00 out of $8,768.00 prepaid by estimates by debtor’s predecessor and said refund was paid by the State of California, received by debtor, and utilized by debtor.

The State of California later audited the tax return, found substantial errors in same, and assessed some $20,000.00 in taxes, all prior to bankruptcy. Debtor never filed an amended return, never contested the assessment, never did anything except to now object to the claim of the State of California. The objection is based on the contention that debtor did not operate the two motels in California, filed the original estimates and return in error, and that the responsible party was some one of the other members of the family of which debtor is merely one of the corporations comprising Lee McLean’s extensive holdings. Who the responsible entity should be seemed not to be a concern of debtor, and no other return was ever filed by what debtor contends is the correct entity.

Debtor reminds the Court of the old carney barker who invites the rubes to step up and guess which shell the pea is under (while all the while the pea is safely ensconced in his pocket). Debtor prepaid the tax, filed the return, claimed a refund, received the refund, spent the refund, listed the State of California as a creditor, obtained a bar date on all its corporate bankruptcies, and now says California chose the wrong shell to bet on. While bankruptcy may seem to creditors to have many of the aspects of the old shell game, it is not the intent or purpose of this Court to allow debtors to Aim flam creditors in such a fashion. Debtor created this misapprehension (if indeed there is such) as to who the creditor should look to for payment. At a minimum, debtor is estopped to deny the claim of the State of California. Moreover, such conduct on the part of the debt- or and its counsel raises serious concerns in the mind of the Court as to the good faith of the debtor in dealing with its other creditors.

Debtor’s objections to the claim of the State of California is OVERRULED.

SO ORDERED.