In re Sol Gross & Co., Inc.

• Decision Date: 16 July 1921
• Citation: 274 F. 741
• Parties: In re SOL GROSS & CO., Inc.
• Court: U.S. District Court — Southern District of New York

274 F. 741

In re SOL GROSS & CO., Inc.

United States District Court, S.D. New York.

July 16, 1921

Hays Hershfield & Wolf, of New York City, for bankrupt.

Robert P. Levis, of New York City, for receiver.

KNOX District Judge.

From the affidavit filed herein in conformity with bankruptcy rule 17 (89 F. viii, 32 C.C.A. xix) it appears that the bankrupt has agreed to pay for the services and disbursements of the receiver the sum of $800. The items of disbursement are not segregated from the amount payable as fees. I assume however, that disbursements constitute a minor portion of the amount agreed upon. The terms of the composition are that the bankrupt shall pay all priority claims, the costs of the bankruptcy proceedings, and 20 per cent. in cash upon filed and allowed claims of creditors. The cash distribution to be made to creditors amounts to $9,619.37. Waivers from creditors aggregate $9,912.85.

Section 48d of the Bankruptcy Act (Comp. St. Sec. 9632(d)) provides:

'That in case of the confirmation of a composition such commissions shall not exceed one-half of one per centum of the amount to be paid creditors on such composition. * * * ' And in section 72 of the act (Comp. St. Sec. 9656) it is said:

'That neither the referee, receiver, marshal, nor trustee shall in any form or guise receive, nor shall the court allow him, any other or further compensation for his services than that expressly authorized and prescribed in this act.'

In the face of these limitations I do not see how the bankrupt properly can pay to the receiver the said sum of $800. I am frank to say that in cases of this character the compensation allowable by the act is altogether inadequate. The demands upon the time and attention of a receiver during the period preceding a composition may be, and indeed frequently are, as great and exacting as when the administration proceeds in ordinary course, and yet, in the latter event, the commissions of a receiver are far in excess of those which lawfully may be paid in composition

At section 2119 1/4 of Remington on Bankruptcy it is suggested that--

'The 'consideration' deposited by or for the bankrupt in composition cases is for the purpose of redeeming the estate (rather than for administering it) and manifestly is an entirely different fund, in theory at least, from the bankrupt estate itself, and creditors are not interested in what allowance may be made out of that fund to the distributing agent for his care in making the distribution of the consideration to creditors. The 'consideration' is to be 'distributed as the court may direct' and the distributing agent who performs the distribution may be compensated as ...