Kampelman, Matter of

Citation398 A.2d 152,165 N.J.Super. 352
PartiesIn the Matter of Harry KAMPELMAN, an Attorney of the State of New Jersey. In the Matter of DOTTEL REALTY CO., INC., Kampelman Properties, Inc., a/k/a H. Kampelman Industries, Inc., a/k/a Kampelman Properties, K. E. K. Realty Co., Roskam Associates, Inc., Kaman Properties, Inc., a/k/a Kaman Properties, 347 Ferry St., Inc., Sunshine, Inc., a/k/a Sunshine Homes, Kambro Realty, Solkam Realty Co., Inc., Corlan Corporation, Baukam, Inc., and Passaic County Center, Inc. TRUSTEES OF the CLIENTS' SECURITY FUND OF the BAR OF NEW JERSEY, Plaintiff, v. Harry KAMPELMAN, Defendant.
Decision Date22 January 1979
CourtSuperior Court of New Jersey

Michael S. Meisel, Rochelle Park, custodial receiver of the estate of Harry Kampelman, pro se.

Colette A. Coolbaugh, for plaintiff trustees of the Clients' Security Fund of Bar of New Jersey (Charles J. Hollenbeck and David E. Johnson on the brief).

Salvatore L. Borrelli, Paterson, attorney, for Lakeview Sav. and Loan Assn.

Willis F. Flower, Atlantic City, for Chelsea Title Co. (Kirkman, Mulligan, Bell & Armstrong, Atlantic City, attorneys).

Herman Osofsky, Passaic, for David and Gitla Helman.

Bennett Wasserstrum, Clifton, for Stephen Kerekes.

CIOLINO, J. S. C.

This matter involves three consolidated actions and presents the question: Is an advance of money by the Trustees of the Clients' Security Fund of the Bar of New Jersey (Fund) to a custodial receiver appointed pursuant to R 1:28-8 to take possession of the property of an attorney an administrative expense of receivership and as such entitled to priority of distribution?

The pertinent facts are undisputed. On January 23, 1976 Harry Kampelman, through his attorney, filed a complaint requesting the appointment of a receiver for his law practice.

Pursuant to the complaint, on February 11, 1976, this court appointed Michael S. Meisel, Esq. custodial receiver of said practice, "with full authority to take charge of and manage the assets, trust accounts and bank accounts of said practice of law."

Meanwhile, on February 3, 1976 a group of investors and former clients of Kampelman filed a complaint seeking the appointment of a receiver of the corporations of which Kampelman was alleged to be sole or controlling shareholder, and with which Kampelman had placed investments. This court also appointed Meisel custodial receiver of these entities on March 1, 1976.

On February 7, 1977 the Trustees of the Fund filed a complaint resulting in the appointment of Meisel on March 7, 1977 as custodial receiver of the entire estate pursuant to R 1:28-8. That order also consolidated the three separate actions in which Meisel was appointed receiver. Early in 1976 Meisel began corresponding with the Trustees of the Fund regarding, among other things, financial assistance from the Fund to facilitate an investigation into possible assets of Kampelman's estate. The Trustees agreed on April 20, 1977 to advance Meisel $10,000 to underwrite the costs of such an investigation. This financial assistance enabled Meisel to compel accountings, conduct real estate and corporate searches, hold receiver's hearings and engage in litigation to recover assets, all for the benefit of Kampelman's clients and other creditors.

Subsequently, at the Trustees' request Meisel petitioned the court for authority to refund all or part of the $10,000 advanced by the Fund for the investigation. An order to show cause to approve the receiver's final report and accounting was made returnable on January 2, 1979, and the Fund filed a motion, also returnable on January 2, 1979, for an order directing reimbursement by the receiver. The Fund alleges that the $10,000 advance represents an administrative expense of the receivership and as such enjoys a priority over other claims. I agree with the Fund's position.

Significant to reaching this determination is Trustees of the Clients' Secur. Fund, etc. v. Beckmann, 143 N.J.Super. 548, 364 A.2d 15 (Ch.Div.1976). After recognizing the unique nature of proceedings pursuant to R 1:28-8, the court there stated:

In the absence of any statutory or judicial precedent, the administration and distribution of an insolvent attorney's estate pursuant to R 1:28-8 should proceed in accordance with the provisions of the federal bankruptcy laws, supplemented where appropriate by equitable principles reflecting the special circumstances giving rise to this type of proceeding. Thus, the status of claims should be determined as of the time of the filing of the complaint or the appointment of a receiver, United States v. Marxen, 307 U.S. 200, 59 S.Ct. 811, 83 L.Ed. 1222 (1939); 11 U.S.C.A. § 103, and questions of priority in distribution, setoff, provability of claims and like matters should follow the equivalent provisions of the federal bankruptcy laws which furnish a vast body of procedural and substantive law in the administration of individual insolvents' estates. (at 554-555, 364 A.2d at 19.)

Referring, then, to the Federal Bankruptcy Act, I find § 64(a)(1) is on point:

(a) The debts to have priority, in advance of the payment of dividends...

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4 cases
  • Trustees of Clients' Sec. Fund of Bar of New Jersey v. Yucht
    • United States
    • New Jersey Superior Court
    • June 30, 1989
    ... ...         The receiver further stated that he knew that the CSF had expended substantial funds in the Yucht matter but no proof of [578 A.2d 903] ... Page 103 ... claim was filed. The receiver further stated that he understood that CSF intended to seek ... Fund of the Bar of New Jersey v. Beckmann, 143 N.J.Super. 548, 364 A.2d 15 (Ch.Div.1976) and In re Harry Kampelman, 165 N.J.Super. 352, 398 A.2d 152 (Ch.Div.1979). The latter decision held that an advancement to pay administration expenses should be treated as ... ...
  • Federal Deposit Ins. Corp. v. Shain, Schaffer & Rafanello
    • United States
    • U.S. Court of Appeals — Third Circuit
    • August 12, 1991
    ... ... The identification of administrative costs and expense lies with a Court's sound discretion. In re Kampelman, 165 N.J.Super. 352, 398 A.2d 152 (Ch.Div.1979). No FIRREA provision states otherwise. That statute merely lays out a claims procedure which, ... "specific assets" (and it does not because the regulatory scheme and language applicable in Federal Land Bank are inapplicable here), it would matter only in determining what priority to accord SS & R's claim in the section 1821(d) claim resolution process. But at this juncture, neither the ... ...
  • Trustees of Clients' Sec. Fund of Bar of New Jersey v. Miller
    • United States
    • New Jersey Superior Court
    • August 2, 1989
    ... ... The disbursements total $535.50. The remainder reflects time spent on the matter at the then-prevailing hourly rates. The total for both is $18,134 ...         Copies of the accounting were sent to the Internal Revenue ... Kampelman, 165 N.J.Super. 352, 398 A.2d 152 (Ch.Div.1979). Not subject to tax liens for the reasons stated above is $15,363.40 allocable to the proceeds of ... ...
  • State in Interest of J. R.
    • United States
    • New Jersey Superior Court — Appellate Division
    • January 25, 1979
    ... ... 2A:90-3, and malicious damage. He contends: (1) it was plain error as a matter of law and on the facts of record to hold that his dog was an offensive weapon within the intent of the statute; (2) there was insufficient evidence ... ...

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