In Re Flexible Conveyor Co.

156 F. Supp. 164, 1957 U.S. Dist. LEXIS 2752
CourtDistrict Court, N.D. Ohio
DecidedOctober 28, 1957
Docket23366
StatusPublished
Cited by12 cases

This text of 156 F. Supp. 164 (In Re Flexible Conveyor Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Flexible Conveyor Co., 156 F. Supp. 164, 1957 U.S. Dist. LEXIS 2752 (N.D. Ohio 1957).

Opinion

*166 KLOEB, District Judge.

This matter comes before the Court on petition of Art Iron & Wire Works, Inc. for review of the Referee’s order of December 5, 1956, reciting that:

“The creditors of the above named bankrupt having failed to appoint a trustee as provided in the Act of Congress relating to bankruptcy, I hereby appoint Arthur A. Zeiher of Sandusky, Ohio, trustee of the estate of said bankrupt, and fix the amount of his bond at Ten Thousand dollars.”

The petition for review was filed on December 13, 1956, together with a “Summary of Evidence Pertaining to Petition for Review of Order Appointing Trustee”. On July 31, 1957, the Referee filed his certificate, together with a “Referee’s Memorandum on Petition for Review”, giving a history of the case following the filing of the involuntary petition on October 12, 1956, together with a statement of the proceedings at the first meeting of creditors on December 5, 1956, when the trustee was appointed, including a memorandum on the law and a statement of his reasons for his actions resulting in the order under review.

The grounds of the petition for review are as follows:

“1. Your petitioner is a creditor of bankrupt herein and is aggrieved by the order of the Referee Frank C. Kniffin dated December 5, 1956 which order appoints Arthur A. Zeiher trustee of the above captioned bankrupt, a copy of which order is annexed hereto marked Exhibit A and made a part hereof.
“2. The Referee erred in respect to said order in that he failed to conduct an election for the office of trustee although an election was duly requested by duly appointed representative of this and many other creditors.
“3. The Referee erred in respect to said order in that although three names were placed in nomination for office of trustee no election was thereafter held even though this creditor through its duly authorized representative, attempted to cast its vote and the vote of several other creditors for one of such nominees.
“4. The Referee erred in respect to said order in that although a nomination was made for the office of trustee and thereafter over one hundred claims of creditors of said bankrupt were offered as votes for such nominee by the duly authorized representative of such creditors, the Referee refused to accept such votes.
“5. The Referee erred in refusing to hold an election for the office of trustee as provided in Section 44 of the Bankruptcy Act of 1938.
“6. The Referee erred in stating that to qualify as a trustee herein it would be necessary for the nominee to be an attorney and a resident of the county wherein the bankrupt conducted its business in that such attempted qualification on the part of the Referee contravenes Section 45 of the Bankruptcy Act of 1938.”

The summary of evidence filed with the petition for review is quite brief and reads as follows:

“As a summary of the evidence adduced at the hearing at which the trustee herein was appointed, petitioner offers the following:
“After the examination of the bills of the bankrupt was completed, the referee announced the next order of business was the appointment of the trustee. Petitioner, through his duly appointed attorney, nominated Morris Garfinkel for the office of trustee. Thereafter the name of Arthur A. Zeiher was placed in nomination and following that the name of Melvyn J. Stauffer was placed in nomination.
“The referee thereupon stated that while he considered Mr. Garfinkel fully qualified it was his practise to insist that the trustee first *167 of all be an attorney and secondly that he be a resident of the county in which the business of the bankrupt was conducted.
“Thereupon the attorney and agent for the petitioner, holding proper power of attorney, voted over one hundred (100) claims of creditors in which he had proper power of attorney to vote, for Mr. Garfinkel as trustee. No other claims were voted by anyone present. The referee stated that in accordance with his policy he would not appoint Mr. Garfinkel.
“Mr. Stauffer thereupon withdrew his name as nominee and the referee thereupon announced that he would appoint Mr. Zeiher.
“This recital of evidence should also include the fact that Mr. Garfinkel is a resident of the City of Toledo within this judicial district.
“This ‘résumé’ of the evidence and the proceedings had relative to the appointment of a trustee in this case is tendered for the purpose of setting forth the issue as to whether or not the trustee in this case was properly appointed and whether or not the referee abused his discretion in failing to give to the properly accredited representatives of creditors the right to elect a trustee to which they are entitled under the acts of Congress relating to bankruptcy.”

After the filing of the certificate on the petition for review, the petitioner filed herein its application for remand of certificate of review to the referee “with instructions to the referee to attach to said certificate a transcript of the evidence taken at the first meeting of creditors or so much thereof as is pertinent to the issue”. As to this motion, it would seem that, on the questions raised on the petition for review, the admitted and undisputed facts in the record now before the court are sufficient for the determination of the questions here presented and that to grant this motion would only prolong this case. For that reason the motion is overruled.

There is no question of law here relative to the application of the provisions of the bankruptcy law providing for the appointment or election of a trustee by creditors or jurisdiction of the Court to appoint a trustee in case of failure to appoint or elect (Secs. 44, 2, sub. a(17); 11 U.S.C.A. §§ 72, 11, sub. a(17), the qualifications of a trustee (Sec. 45, 11 U.S.C.A. § 73), or the right of creditors to pass upon matters submitted to them at their meetings by the vote of a majority in number and amount of claims. (Sec. 56, 11 U.S.C.A. § 92).

The questions here seem to be:

1. Did the Referee err in refusing to permit the name of Morris Garfinkel to be placed in nomination for trustee?

2. Did the Referee err in refusing to consider the claims on which the attorney for the petitioner had the powers of attorney and to permit their being voted for Mr. Garfinkel?

The facts upon which these questions arise appear to be that, at the first meeting of creditors, the attorney for the petitioner nominated Morris Garfinkel, an attorney, of Toledo, for trustee, and that there were also nominated Arthur A. Zeiher and M. J. Stauffer, of San-dusky,- both attorneys; that counsel for petitioner offered a large number of claims on which he had the power of attorney for allowance and voting for Mr. Garfinkel; that the Referee refused to allow any of the claims and to permit them to be so voted for the reason that Mr.

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Cite This Page — Counsel Stack

Bluebook (online)
156 F. Supp. 164, 1957 U.S. Dist. LEXIS 2752, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-flexible-conveyor-co-ohnd-1957.