465 F.2d 25 (10th Cir. 1972), 71-1559, State of Ohio v. Four Seasons Nursing Centers of America, Inc.

Docket Nº:71-1559.
Citation:465 F.2d 25
Party Name:STATE OF OHIO, Petitioner for Reclamation-Appellant, v. FOUR SEASONS NURSING CENTERS OF AMERICA, INC., Debtor-Appellee.
Case Date:August 03, 1972
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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465 F.2d 25 (10th Cir. 1972)

STATE OF OHIO, Petitioner for Reclamation-Appellant,

v.

FOUR SEASONS NURSING CENTERS OF AMERICA, INC., Debtor-Appellee.

No. 71-1559.

United States Court of Appeals, Tenth Circuit.

Aug. 3, 1972

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Richard North Patterson, Asst. Atty. Gen. (William J. Brown, Atty. Gen., A. L. Gretick, Executive Asst. to the Atty. Gen., Columbus, Ohio, on the brief), for petitioner-appellant.

Arthur F. Mathews, Washington, D. C. (Michael R. Klein and Robert B. McCaw, Washington, D. C., on the brief), for appellee, Jack L. Clark.

John A. Johnson, Oklahoma City, Okl., for debtor-appellee.

Before JONES, [*] HILL and BARRETT, Circuit Judges.

HILL, Circuit Judge.

This is an appeal by the State of Ohio from the denial of its reclamation petition filed against the debtor corporation, Four Seasons Nursing Centers of America, Inc. Four Seasons is currently involved in Chapter X Corporate Reorganization Proceedings before the United States District Court for the Western District of Oklahoma. The reclamation petition was denied on July 14, 1971, 329 F.Supp. 647, after a full hearing in that court.

In early 1970, Mr. Jack L. Clark, the president of Four Seasons, received information that a Mr. Ronald R. Howard

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of Los Angeles, California, was in a position to assist Four Seasons in borrowing needed funds for continued operation and expansion. Howard and Clark conferred in Oklahoma City for the purpose of consummating an agreement for the procurement of funds. It was anticipated that Four Seasons would borrow between $20, 000, 000 and $24, 000, 000 from the State of Ohio. Howard contacted Crofters, Inc., a Columbus, Ohio, investment firm. Mr. Harry A. Groban, the executive vice president of Crofters, requested a credit rating on Four Seasons from the National Credit Office, a division of Dun and Bradstreet. An employee of the National Credit Office procured the latest annual report of Four Seasons, as well as other statements and bank information concerning that corporation from Mr. John Mee, a vice president of and attorney for Four Seasons. Based on this material, the national Credit Office gave Four Seasons a rating of "prime" for commercial paper. This information was communicated by letter to Groban; Groban in turn furnished the information to Mr. Robert F. Gardner, Deputy Treasurer of the State of Ohio.

Groban advised Mee that funds would be available to Four Seasons from the State of Ohio. Thereafter, Mr. Alex Russell, an officer of Four Seasons, went to Columbus, Ohio, to secure...

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