In re Butcher

D. Massachusetts

In re Butcher

266 F. 239, 1920 U.S. Dist. LEXIS 1042

CourtDistrict Court, D. Massachusetts

DecidedMay 5, 1920

DocketNo. 25984

StatusPublished

This text of 266 F. 239 (In re Butcher) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

In re Butcher, 266 F. 239, 1920 U.S. Dist. LEXIS 1042 (D. Mass. 1920).

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Opinion

MORTON, District Judge.

The present proceedings raise no question as to the allowance of expenses of litigation from the amount recovered; it being taken for granted, apparently, by all parties concerned, that they are allowable. The prayer of the petition is that the amount recovered— ■ t '

“should be ,treated as a special fund and should be first devoted to the payment of the claims of those creditors who contributed to and guaranteed the expense of the trustee in bringing and carrying forward said litigation * * * in proportion to the amount of their contribution thereto.”

The amount recovered is now part of the estate in bankruptcy, the distribution of which is governed by the Bankruptcy Act (Comp. St. § 9586 et seq.). As said in In re Morris, 204 Fed. 770, 123 C. C. A. 220, the act contemplates equality of treatment among creditors of the same class. It is at least doubtful whether the court has power to make a different distribution of assets from that provided in the act. To award preferences among creditors for supposedly meritorious or helpful service by them in the administration of the estate would introduce a wide, and I think unwise, element of discretion. It cer.tainly ought not to be done unless the effect of a refusal to contribute to the fund required for litigation by the estate was squarely put to creditors at the time when they were asked to contribute, as it was in Cornell v. Nichols, 201 Fed. 320, 119 C. C. A. 558.

Order of referee affirmed.

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MORTON, District Judge.

The present proceedings raise no question as to the allowance of expenses of litigation from the amount recovered; it being taken for granted, apparently, by all parties concerned, that they are allowable. The prayer of the petition is that the amount recovered— ■ t '

“should be ,treated as a special fund and should be first devoted to the payment of the claims of those creditors who contributed to and guaranteed the expense of the trustee in bringing and carrying forward said litigation * * * in proportion to the amount of their contribution thereto.”

The amount recovered is now part of the estate in bankruptcy, the distribution of which is governed by the Bankruptcy Act (Comp. St. § 9586 et seq.). As said in In re Morris, 204 Fed. 770, 123 C. C. A. 220, the act contemplates equality of treatment among creditors of the same class. It is at least doubtful whether the court has power to make a different distribution of assets from that provided in the act. To award preferences among creditors for supposedly meritorious or helpful service by them in the administration of the estate would introduce a wide, and I think unwise, element of discretion. It cer.tainly ought not to be done unless the effect of a refusal to contribute to the fund required for litigation by the estate was squarely put to creditors at the time when they were asked to contribute, as it was in Cornell v. Nichols, 201 Fed. 320, 119 C. C. A. 558.

Order of referee affirmed.

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266 F. 239, 1920 U.S. Dist. LEXIS 1042, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-butcher-mad-1920.

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