In re Foley
| Decision Date | 02 July 1924 |
| Docket Number | 1046-B.,No. 1048-J,1048-J |
| Citation | 4 F.2d 152 |
| Parties | In re FOLEY. In re E. Y. FOLEY, Inc. |
| Court | U.S. District Court — Southern District of California |
I. Henry Harris, of Los Angeles, Cal., for petitioner, Withers Bros.
T. M. Stuart and Newton A. Johnson, both of Fresno, Cal., for trustee, White.
Everts, Ewing, Wild & Everts, of Fresno, Cal., for E. Y. Foley.
On April 4, 1924, the referee in bankruptcy made an order that the matters above entitled be consolidated. On the 28th day of April, 1924, the referee made an order allowing compensation to William E. White, who, prior to his election as trustee, had, under appointment by the court, acted as receiver in the matter of E. Y. Foley, Inc. On April 28, 1924, the referee ordered that a first dividend of 5 per cent. be paid to the creditors. Withers Bros., who were original creditors of E. Y. Foley in an amount approximating $20,000, made objection to the order of consolidation and to the order allowing compensation to the receiver, also to the order declaring the dividend. The same creditor petitioned for a review of the orders mentioned and the matter has been argued and submitted for decision.
There is scarcely room for debate upon the question of the propriety of the order made allowing compensation to the receiver in Foley, Inc. The receiver, it appears, rendered full and very competent service in the handling of the business of the bankrupt prior to the election of himself as trustee by the creditors; it being admitted that under the receiver's management a profit of approximately $50,000 accrued to the benefit of the creditors. No point is made that the services were of any less value than the amount fixed by the referee. It follows that the order fixing the receiver's compensation should be confirmed and become operative forthwith.
The matters urged as objections to the order of consolidation of the two estates have in their substance been heretofore presented, fully argued, and determined by the order of the court entered on March 18, 1924. At that time the same creditor who appears now asked to have the order of the referee confirming the election of the trustee set aside. The contention raised there, which is the foundation for the objection now presented, was that there was a conflict of interest as between the creditors of Foley the individual, and Foley, Inc. For a general statement of the circumstances and conditions which attended the organization of Foley, Inc., reference may be made to the opinion filed on March 18, 1924 (D. C.) 1 F.(2d) 568. After having reread the briefs filed at the time the matter referred to was presented, and having considered carefully the supplemental evidence, and argument of counsel for the petitioner, I am firmly of the opinion that the conclusions arrived at in the decision of March 18, 1924, are correct, and that there is no conflict of interest between the creditors of the two estates. The organization of Foley, Inc., was the result of a plan made by a majority of Foley's creditors to furnish him additional assistance, with the view to his re-establishment...
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