IN RE TOWERS MAGAZINES
| Decision Date | 27 May 1939 |
| Docket Number | No. 9223.,9223. |
| Parties | In re TOWERS MAGAZINES, Inc. |
| Court | U.S. District Court — Western District of Pennsylvania |
Lee P. Stark, of Scranton, Pa., and Robert J. Doran, of Wilkes Barre, Pa., for trustees.
Joseph F. Tedesco, of Scranton, Pa., and Archibald Palmer, of New York City, for objectors.
Since the adjudication of bankruptcy made by this Court on October 7, 1935, a number of controversies have arisen in the administration of the estate, which have been largely responsible for the delay in closing the case. Among the controversies is one between the Bankrupt and Frederick M. Kirby; one between the Bankrupt and Fremkir Corporation; one between the Bankrupt and the Hall Printing Company; and one between the Bankrupt and F. W. Woolworth Company. No suit has been commenced against the Hall Printing Company nor against F. W. Woolworth Company, but, in 1937, a suit was commenced by the Trustees in the State of Delaware against Frederick M. Kirby and Fremkir Corporation to recover what the Trustees claim to be due the Bankrupt because of the failure of Frederick M. Kirby and Fremkir Corporation to buy certain shares of the preferred stock of the Towers Magazines, Inc., in accordance with their alleged agreements. The defendants demurred, but the demurrers have not yet been decided by the Court. On April 5, 1939, the Trustees entered into an agreement with S. John Block, as Attorney, subject to the approval of the creditors of the Bankrupt and of this Court, by which the Trustees agreed to compromise the controversies referred to for the sum of $17,500 to be paid to the Trustees by Block, Attorney. On April 14, 1939, upon petition of the Trustees, the Court approved the agreement qualifiedly and subject to the approval by the creditors, and referred the matter to David Rosenthal, Referee in Bankruptcy, with instructions to send notices to all creditors of record of the Bankrupt upon a rule to show cause why the creditors should not approve or disapprove the said agreement to compromise. A proper notice was given to all creditors of the Bankrupt of a hearing to be held on April 28, 1939, at which hearing the said agreement was submitted to the creditors for approval or disapproval. At the hearing the only creditors represented and voting were: W. F. Hall Printing Company, approved claim, $283,543.44; Robert McElroy, assignee of Harris Trust & Saving Bank, approved claim, $190,976.49; which creditors voted in favor of approving the agreement.
Joseph F. Tedesco, Attorney for Halpin & Powderly, expressed his disapproval of the agreement, but, as the claim of Halpin & Powderly had never been filed or approved, of course, his disapproval could not be taken into consideration.
On April 28, 1939, the Referee made his report and recommendation to the Court, and recommended the approval of the agreement by the Court.
On April 29, 1939, the Court adopted the recommendation of the Referee, and directed the Trustees, upon the receipt of the sum of $17,500 from S. John Block, Attorney, to perform that which they had agreed to do in said agreement.
On May 1, 1939, on the request of Catherine McNelis, president of the bankrupt corporation, that she be given further opportunity to object to the recommendation of the Referee, called a meeting of the Trustees and Attorneys for the Trustees and, after hearing, the Court revoked its order of April 29, 1939, adopting the report and recommendations of the Referee, and allowed all interested parties until May 9, 1939, in which to file objections to the report and recommendations of the Referee.
On May 9, 1939, objections to the agreement were filed by Prismatic Engraving Company, Inc., and by Halpin Insurance Agency, formerly Halpin & Powderly, but, as before stated, Halpin & Powderly were not interested parties, and, for that reason, objections by them could not be considered. The objections filed by Prismatic Engraving Company, Inc., related solely to the inadequacy of the consideration to be received by the estate.
The Court fixed May 15, 1939, at 2 o'clock P. M. to hear the objections of the Prismatic Engraving Company, Inc. At the time appointed, the Attorney for the objecting creditor...
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