In re United Grocery Co.
| Decision Date | 16 January 1917 |
| Citation | 239 F. 1016 |
| Parties | In re UNITED GROCERY CO. |
| Court | U.S. District Court — Southern District of Florida |
H. L Anderson, of Jacksonville, Fla., for petitioners.
Marks Marks & Holt, of Jacksonville, Fla., for respondents officers and directors of United Grocery Company.
On January 3, 1917, the bankrupt filed its petition to be adjudged a bankrupt; the petition being signed by the bankrupt, through its president and secretary, and the seal of the corporation affixed. The petition alleges the jurisdictional facts, and has attached to it as an exhibit a copy of a resolution passed by the board of directors authorizing the filing of the petition by the officers. On January 4, 1917, an adjudication in voluntary bankruptcy was made by the judge of this court, upon this petition, a receiver was appointed, and reference made to the referee. On January 11th a petition was filed by certain of the stockholders of the corporation, joined by three creditors praying that the adjudication upon said petition and all proceedings thereunder be vacated and dismissed, etc.
This petition alleges that the petitioners are stockholders owning 833 shares of the capital stock of the corporation, of the par value of $83,300; that the corporation is not insolvent; that certain of the petitioners on December 27, 1916, filed a bill in chancery in the state court of Duval county, Fla., charging mismanagement and fraudulent conduct on the part of the officers and directors of the corporation, and praying for a receiver of the property of the corporation and other relief; that the hearing upon the application for a receiver had been, by one of the circuit judges of Duval county, set for hearing on January 6, 1917, and subpoenas issued and served upon the officers and directors to appear and bring the books and records of the corporation before the circuit judge on said day; that said directors met in special session on January 3, 1917, and passed the resolution attached to the voluntary petition, in order to defeat action commenced in the state circuit court and avoid the discovery there sought; that the action was not authorized by the shareholders, and that the notice of the meeting of the stockholders in annual meeting had been called for January 16, 1917; that there was no occasion for the action of the directors; and that no legal notice was given all the directors of said meeting of the directors, at which the resolution was passed, but that the meeting was secretly held and the resolution passed for the fraudulent purposes set out. A copy of the bill filed is attached and by appropriate words made a part of the petition. Three creditors of the corporation adopt the allegations and prayers of the petition.
The bill of complaint filed in the state circuit court shows the complainants are stockholders in the corporation, and charges various fraudulent acts and violations of the trust resting upon directors of corporations; that the directors had by fraudulent acts wasted and misappropriated the assets until at the time of the filing of the bill the assets were not sufficient to pay the debts of the corporation; that the complainants could get no relief because the directors and officers would re-elect themselves and thus perpetuate their management, and other charges that the stock held by such directors was fraudulently obtained and should be declared held in trust for the corporation. This bill then prayed for relief of various kinds, and also for a receiver for all the property of the corporation. The petition does not allege service of subpoena upon the defendants, but does allege, as above noted, that a time had been set by one of the circuit judges for hearing the application for the appointment of a receiver as prayed by the bill.
A rule to show cause why the petition should not be granted was issued and served upon the officers and directors of the corporation, returnable on the 15th of January, 1917. Upon that day and at the time mentioned in the rule the respondents filed a motion to dismiss and answers to the petition. The hearing was had upon the motion to dismiss the petition, which contains 17 grounds. I will not notice the ground...
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