In re J.B. & J.M. Cornell Co.
| Decision Date | 05 April 1911 |
| Citation | 186 F. 859 |
| Parties | In re J. B. & J. M. CORNELL CO. |
| Court | U.S. District Court — Southern District of New York |
A Gordon Murray, for receivers.
Wherry & Morgan, for Taunton-New Bedford Copper Co.
Van Wyck & Mygatt, for Garfield & Proctor Coal Co.
Upon consideration, I think that the objections stated in the memoranda submitted in behalf of some of the unsecured creditors are insuperable. In the first place, the so-called bid is not strictly a bid at all. It does not offer to pay anything to the receivers. It is in form a proposition to have a new corporation take over all the assets of the bankrupt except a few contracts, and then have the creditors of the bankrupt directly accept, in place of their claims against the bankrupt, unsecured obligations of the new corporation payable at different dates in the future, running from 9 to 27 months.
The parties who make the bid are the principal creditors, and, of course, so far as they are concerned, any arrangement which they agree to would be satisfactory. But in addition to the claims which they represent, aggregating about $225,000, there remain further claims, aggregating about $30,000, held by creditors of the receiver, who have furnished materials or labor in connection with the business which the receivers were authorized to carry on by the order of the court, and with the consent and approval of the creditors making the bid. The bid proposes, in substance, to give these creditors either 25 per cent. cash for their claims, or certificates of the new corporation for the full amount of their claims, payable about two years hence, after the holders of the receivers' certificates have been paid.
I do not think that a bankruptcy court has any power to make such an order as against nonassenting creditors. The court cannot arbitrarily order that any creditor who objects shall receive 25 per cent. of his claim, when it is not apparent that upon a formal liquidation he will not receive a larger amount. Nor can any bankruptcy court compel a creditor to consent to have all the bankrupt estate transferred to a corporation, and accept in settlement of his claim obligations of the new corporation, payable at a future date. There is no explanation in this bid of what the amount of the capital of the new corporation will be, or how it will be furnished, or how the money necessary to carry on the business will be obtained; but the bid states...
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In re Standard Gas & Electric Co.
...Portland Cement Co., D.C., 185 F. 542; In re Sale of Assets of First Nat. Bank of Florence, D.C., 6 F.2d 905; In re J. B. & J. M. Cornell Co., D.C., 186 F. 859, 201 F. 381; In re Prudential Outfitting Co., D.C., 250 F. 504. See Gerdes on Corporate Reorganizations, Sec. 1038. Under Section 7......
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Moore v. Splitdorf Elec. Co.
...Portland Cement Co. (D. C.) 185 F. 542; In re Sale of Assets of First Nat'l Bank of Florence (D. C.) 6 F.(2d) 905; In re J. B. & J. M. Cornell Co. (D. C.) 186 F. 859; In re J. B. & J. M. Cornell Co. (D. C.) 201 F. 381; In re Prudential Outfitting Co. (D. C.) 250 F. 504. In such cases, the c......
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Coriell v. Morris White, Inc.
...Portland Cement Co. (D. C.) 185 F. 542; In re Sale of Assets of First Natl. Bank of Florence (D. C.) 6 F.(2d) 905; In re J. B. & J. M. Cornell Co. (D. C.) 186 F. 859; In re J. B. & J. M. Cornell (D. C.) 201 F. 381; In re Prudential Outfitting Co. (D. C.) 250 F. 504. In such cases, the court......
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In re Prudential Outfitting Co. of Delaware, Inc.
... ... (D.C.) 133 F. 593, upon this ground, yet in Re J. B ... & J. M. Cornell (D.C.) 186 F. 859, he refused to confirm ... a bid upon a sale which required creditors to accept ... ...