Case ID: f_129/html/0622-01.html
Source: Caselaw Access Project
Author: {"author": "ARCHBALD, District Judge.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In re GORDON SUPPLY & MFG. CO.
    (District Court, M. D. Pennsylvania.
    April 9, 1904.)
    No. 411.
    1. Bankruptcy — Trustees—Selection.
    Where a trustee chosen to administer the assets of a bankrupt corporation by a majority of the creditors was not only a stockholder in the corporation, but had been closely associated as attorney for those who had previously been in control, and whose management was not only the subject of criticism, but might call for action on the part of the trustee to hold them personally responsible, such trustee, though unobjectionable personally, should not be permitted to act over the objections of a minority.
    If 1. See Bankruptcy, vol. 6, Cent. Dig. § 185.
    In Bankruptcy. On exceptions to action of referee approving of trustee selected by majority of the creditors.
    C. P. O’Malley, for objectors.
    W. H. Jessup and Charles H. Welles, opposed.
   ARCHBALD, District Judge.

There can be no objection personally to the trustee who has been chosen by a majority of those interested in the estate, at the creditors’ meeting; and the right of such majority, under ordinary circumstances, to control the matter, must be conceded. The trustee is the representative of creditors, and they are the ones to decide who he shall be, subject only to the right of the court to supervise the choice where it is objected to. In the present instance the trustee chosen is not only a stockholder in the bankrupt corporation against which the proceedings were instituted, but he has been admittedly associated closely, as attorney and legal adviser, with those who have been hitherto in control; and their management is not only the subject of criticism, but may call for action on the part of the trustee to hold them personally responsible. To approve of the trustee now selected comes too near, therefore, to a continuation of previous conditions, to be warranted. With'so many others who would be fully as efficient and entirely acceptable, the majority have no right to impose their present choice on the objecting minority.

The election is therefore set aside, and a new election ordered.