               IN THE UNITED STATES COURT OF APPEALS

                       FOR THE FIFTH CIRCUIT



                            No. 95-50541

                          Summary Calendar



THOMAS VARKONYI d/b/a
METAL RECYCLING COMPANY and
UNIQUE PRODUCTS INTERNATIONAL,
                                           Appellant,

                               versus

ANDREW B. KRAFSUR, Chapter 7 Trustee,
                                           Appellee,

                               versus

ALLSTATE INSURANCE CO.,
                                           Appellee.




          Appeal from the United States District Court
                for the Western District of Texas
                          (EP-93-CV-441)


                            May 15, 1996

Before HIGGINBOTHAM, DUHE’, and EMILIO M. GARZA, Circuit Judges.

PER CURIAM:*

     Allstate Insurance Company filed this interpleader action

against Thomas Varkonyi, d/b/a Metal Recycling Company and Unique

Products International, a Chapter 7 debtor, and Andrew Krafsur, the

     *
     Local Rule 47.5 provides: "The publication of opinions that
have no precedential value and merely decide particular cases on
the basis of well-settled principles of law imposes needless
expense on the public and burdens on the legal profession."
Pursuant to that Rule, the Court has determined that this opinion
should not be published.
Chapter 7 trustee.   Allstate sought to resolve the adverse claims

of Varkonyi and Krafsur as trustee to insurance proceeds arising

from the claimed loss of Varkonyi's Lincoln Mark VII, which he had

reported stolen.   Allstate also sought a declaratory judgment that

it was justified in delaying payment of proceeds.     Prior to the

bench trial, the parties agreed on a distribution of the insurance

proceeds.   After the trial on the declaratory judgment action, the

bankruptcy court ruled that Allstate had no further liability to

Varkonyi; it concluded that, given the circumstances of Varkonyi's

arrest and indictment on insurance fraud charges in connection with

his Lincoln Mark VII, Allstate had not wrongfully delayed payment

of the proceeds.   The district court affirmed.

     Varkonyi now appeals, arguing that the district court erred in

affirming the decision of the bankruptcy court. He contends, inter

alia, that the bankruptcy court judge should have disqualified

himself; that Allstate brought the interpleader action for an

improper purpose; and that the judgment is inconsistent in failing

to clarify certain issues that may arise in Varkonyi's state court

litigation against Allstate.   We have reviewed the record and the

memoranda of the lower courts and find no reversible error.

     AFFIRMED.




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