The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1900-06-05
.D|SAPPROVES THE OFFER
JUDGE LOCHREN REFUSES WILL
LAM CUNNINGHAM'S OFFER
AS INEQUTTABLE
TWO CREDITORS OBJECTED
bankrupt Cannot Make Provision
to Secure the Attorneys Fees
Is a Good Proposition
Otherwise.

Judge Lochren, of the United States
circuit court, yesterday heard arguments
on the referees report, which favored
accepting the proposition Of Bankrupt
William Cunningham. After hearing the
arguments the court refused the offer OF
a settlement and sustained the objection
made by the minority creditors, Joseph
Benn & Sons and James Talcott, of New
York
Judge Lochren based his decision on
what appeared to him as the inequality
of the offer Of the bankrupt, which car
ried with 1t the payment of attorneys
fees. He said that the bankrupt had
nothing whatever to do with attorneys
fees; that was a matter between the
creditors and their counsel, and to permit
composition under such terms would be in
violation of the terms of the bankrupt
act and would establish very bad prece-
dent, one that might lead to extortfon
between the bankrupt and the attorneys.
Judge Lochren said he had no doubt
that if the composition was carried out
as proposed it would be for the very best
interests of the creditors. A refusal to
permit composition meant delay, and a
consequent shrinkage of values, which
would entail loss to the bankrupt and
the creditors. Still, in view of the in
equality of the offer, due to the injection
OF the payment Of attorney fees, there
was nothing for him to do but sustain the
objections offered.
Mr.. Morphy, for the majority of the
creditors, claimed that the offer had been
made in good faith, as were all the steps
taken up to the proposed settlement. All
the creditors, objecting and otherwise, had
full knowledge of the exact nature of the
compromise, as well as that attorneys
fees would be paid. The offer to pay at
torneys' fees was. so that all creditors
would get % per cent net. Benn & Sons
were advised Of all the proceedings, and
had made no objections. What they did
object to was the alleged secretion of
goods by the bankrupt No distinction
was made as to creditors-all were to be
treated alike
Fred w. Reed, OF Minneapolis, appeared
for the objectingt creditors and directed
his argument to the point that the pay
ment of attorneys fees, in addition to the
70 per cent, was preference. 1t was in
the nature of an additional inducement to
reach settlement
John D. O'Brien, for the bankrupt, said
that the terms Of the settlement were so
made as to arrive at an equitable adjust
ment, and that any other arrangement
Ih@H tHdl proposed would work Inc
! quality
Judge Lochren has been holding the
sum of $4,000 for the bankrupt, pending
the decision on the proposed compromise.
and this will be turned back to Mr. Cum
bingham.
! The result was a surprise to the ma
| 1orlty creditors, who considered the terms
| OF settlement on the basis of Is per cent
net as fair and equitable
Mr.. Cunningham said yesterday:
have been charged with having Sc
creted certain goods In Seattle for the
purpose of defrauding my creditors. This
! slur on my good name II cannot let go
unchalenged regard this as a DELHI
crate attempt at smirching my character,
and | want the papers to clear up this
matter and give as wide publicity to this
side of the case as they did to the charge
! mat had been dishonest
The report of the referee on this phase
of the proceeding says:
NO evidence to support the specifica-
lions was 1ered by the attorneys for the
| obJecting creditors. The testimony of the
! bankrupt bears out the schedules. 1t an
! pears that he has turned over all his
| property to his creditors and has been
/ guilty of no suspicion of conceaIment."