From this determination, it has been brought to the court on petition for review.
From an examination of the facts, the cases generally, and particularly the recent case of In re Standard Composition Co., D.C.E.D. Mich. S.D., 23 F.Supp. 391, directly on this point, I am satisfied that the statute requiring the 90% to be paid to the United States in case of failure of payment to the State in strict accordance with the law's provisions is undoubtedly a penalty, and should not be allowed in bankruptcy estates, if full payment to the State is made by the trustee.
In the instant case I understand that the trustee was able to take advantage of the Act of Congress of May 28, 1938, see note to 42 U.S.C.A. § 1101, which extended the time for payment to the State, but I am advised that other cases of this character are pending, which may be controlled by the conclusions herein stated.
An order will be made requiring the reduction of the claim of the United States in accordance with this memorandum.
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