In re Blossom Products, Inc.

S.D. New York

In re Blossom Products, Inc.

4 F. Supp. 696, 1933 U.S. Dist. LEXIS 1315

CourtDistrict Court, S.D. New York

DecidedJune 5, 1933

StatusPublished

Cited by1 cases

This text of 4 F. Supp. 696 (In re Blossom Products, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

In re Blossom Products, Inc., 4 F. Supp. 696, 1933 U.S. Dist. LEXIS 1315 (S.D.N.Y. 1933).

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Opinion

PATTERSON, District Judge.

The bankrupt in 1931 made an offer of composition. Several creditors opposed, alleging that credit had been obtained on false financial statements. After considerable testimony bearing on the issues had been taken, a stipulation was entered into by the bank-rapt and the objecting creditors permitting the bankrupt to withdraw the offer. On November 18,1931, an order was entered on the stipulation, directing that the offer be deemed withdrawn, and the composition proceeding came to an end. Over a year later the bankrupt makes a new offer of composition. This offer is resisted by the same creditors. The referee has found that at the time when the bankrupt withdrew its initial offer it expressly agreed with the opposing creditors that it would not again offer a composition, and he recommends that for this reason the proceeding should be dismissed.

One of the conditions precedent to confirmation of a composition is that it satisfactorily appear to the court that the offer made is “in good faith.” Bankruptcy Act § 12, 11 USCA § 30. It would seem clear that an offer of composition is not made in good faith when it is in the teeth of an express agreement by the bankrupt not to make such an offer, the agreement having been made when the bankrupt was permitted by the opposing creditors to withdraw a prior offer.

Confirmation of the proposed composition will accordingly be denied.

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PATTERSON, District Judge.

The bankrupt in 1931 made an offer of composition. Several creditors opposed, alleging that credit had been obtained on false financial statements. After considerable testimony bearing on the issues had been taken, a stipulation was entered into by the bank-rapt and the objecting creditors permitting the bankrupt to withdraw the offer. On November 18,1931, an order was entered on the stipulation, directing that the offer be deemed withdrawn, and the composition proceeding came to an end. Over a year later the bankrupt makes a new offer of composition. This offer is resisted by the same creditors. The referee has found that at the time when the bankrupt withdrew its initial offer it expressly agreed with the opposing creditors that it would not again offer a composition, and he recommends that for this reason the proceeding should be dismissed.

One of the conditions precedent to confirmation of a composition is that it satisfactorily appear to the court that the offer made is “in good faith.” Bankruptcy Act § 12, 11 USCA § 30. It would seem clear that an offer of composition is not made in good faith when it is in the teeth of an express agreement by the bankrupt not to make such an offer, the agreement having been made when the bankrupt was permitted by the opposing creditors to withdraw a prior offer.

Confirmation of the proposed composition will accordingly be denied.

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4 F. Supp. 696, 1933 U.S. Dist. LEXIS 1315, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-blossom-products-inc-nysd-1933.

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