Case Summary:
Debtors sought court determination of status of real estate tax penalties in their respective chapter 11 bankruptcy cases.  Generally, penalties are not in harmony with overall philosophy of bankruptcy code -- to effectuate fair and equitable distribution of estate assets to creditors.  Postpetition penalty on debtors' postpetition Wisconsin real estate taxes is allowable as an administrative expense.  Postpetition penalties on debtors' prepetition real estate taxes, which become a lien on real estate under Wisconsin law, are punitive in nature and are thus disallowed.

Key Terms:
Penalties
Tax -- Penalties