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In re Shinault Lumber Products, Inc.

323 F. Supp. 1041, 1970 U.S. Dist. LEXIS 10829
District Court, N.D. Mississippi·Decided July 22, 1970·No. No. DBK 6923-K·Published·Cited by 3 cases

Opinion

MEMORANDUM OPINION

KEADY, Chief Judge.

This is a petition directed to the Bankruptcy Court for review of the Referee’s decision adjudging that petitioner was not a secured creditor of the bankrupt corporation and denying his petition for reclamation of $54,061.66 from bankrupt’s estate.

Briefly stated, the facts are as follows. The bankrupt is Shinault Lumber Products of Olive Branch, Mississippi, a Mississippi corporation which was formerly engaged in the brokerage of wood products. In 1966 its president, Spain Shinault, decided it would be profitable for the company also to manufacture wood products. To that end he obtained a loan of $100,000 from The First National Bank of Jackson, Mississippi, to finance the construction of a wood moulding manufacturing plant. Unable to obtain financing for the needed machinery, Mr. Shinault sought the assistance of petitioner, Fred Hoerner, who was an officer of bankrupt and holder of 50% of its stock. Petitioner’s main business interest was in Delta Millwork, a Mississippi corporation specializing in production of millwork. He also operated as a factor in the lumber industry under the trade name of Bee-Kay Associates, and has engaged in the lumber industry in various capacities for many years.

At bankrupt’s request, petitioner agreed to put up $60,000 to finance the purchase of machinery for its new plant. In late 1966, acting through Bee-Kay Associates, petitioner ordered from James Murphy of Cambridge, Massachusetts, 3 large moulders, each of which was priced in excess of $10,000. The moulders, although invoiced to petitioner, were shipped directly to bankrupt in early 1967 and were never in petitioner’s possession. The moulders were paid for by petitioner, who received from Murphy a 5% commission or discount which he passed on to bankrupt.

As of July 12, 1967, petitioner had disbursed the agreed loan of $60,000 as follows:

(1) To Murphy (net) $26,125.00
(2) To bankrupt 32,354.23
(3) Credit on note 1,520.77

On that date petitioner presented to bankrupt for execution the following instrument, which was signed by bankrupt only and never recorded:

[1043]*1043

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In re Shinault Lumber Products, Inc., 323 F. Supp. 1041, 1970 U.S. Dist. LEXIS 10829 (N.D. Miss. 1970).

323 F. Supp. 1041 (In re Shinault Lumber Products, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Thomas v. Greyson Co.
363 F. Supp. 382 (N.D. Mississippi, 1973)
Shinault Lumber Products, Inc. v. Baker
440 F.2d 121 (Fifth Circuit, 1971)
Hoerner v. Baker
440 F.2d 121 (Fifth Circuit, 1971)