Newark evening star and Newark advertiser., 1915-06-19
JUDGE HA|GHT
HAS CRITICISM
FOR RECEIVERS
peories Unnecessary Expenses,
in Many Bankruptcy
Proceedings.

Unnecessary expense in administer
ing bankrupt estates was decried by
Judge Thomas G. Haazht in the New
ark branch Of the United states Dis
trict Court Yesterday He vas pre-
siding at a hearing TO set aside a
settlement made by the Union Sash
and Door Company, OF 100 Magnolia
street, and Its creditors.
Rents collected by the receiver were
heing traced in the various accounts
shown, when the judge asked Samuel
I Kessler, receiver. TO explain an ap-
parently misplaced account.
eThe rents were paid to my coun-
sci. George Furst," said Mr.. Kessler.
ITO your eounsel?" replied the
Judge. What did you want With a
counsel? Aren't you a lawyer your
self?
This practice of lawyers having
themselves appointed receivers in
Bankruptcy cases and then employing
counsel seems to be going on without
my knowing It. and l want to know
about 1t. The practice has got to
stop
But. your honor" said Mr.. Kess-
Ter. that rule has been in force only
a short time and this proceeding took
place nearly a year ago.
THE rule has been in force ever
s.nee I went on the BENCH replied
the Judge with emphasis. 1T went
into effect as soon as l found out
how these things were being done.
And ! want TO say again that / in
tend 10 see that the rule is enforced.
~, lou h1 45 4od
must not employ counsel unless there
is so much legal work to be done
that another lawyer is absolutely
necessary"
Charges Fraud.
United States District Attorney j.,
Warren Davis. counsel for Harry
K. -usen, of East Orange, a creditor.
brought the proceedings to open the
con position on the ground that fraud
and misrepresentation had been prac-,
ticed in putting 1t through. Mr..
DavAs told the court that the Union
Sash and Door Company had assets
of So 6O6.5s to pay liabilities Of
$s.1769.' at the time II was thrown
into bas lkruptcy.
samue Merlis. of Elizabeth, presi-
dent of the Union Sash and Door
Company testified yesterday after
noon thai his company was solvent
at the time il was thrown into bank
ruptcy "A said the company had
been orgayAi lied only ten weeks when
the insolvency proceedings were
started.
Il lost $4,000 in that ten weeks"
said Mr.. Ma-lls. when the bank
ruptcy petitidn was filed ! took the
r,atter up whh my lawyer, Charles
n. Wagner, o. Elizabeth. He said
he would do u hat he could for me.
In a day or twa, he told me that he
would put through a settlement Of
twenty per cent. and I would have Ia
give him $50 rAyht away to do 1t,
with"
The witness toki of having given
TO Wagner vario,us checks, aggre-
eating more than $500 One of these
checks the witness said was for 800,
drawn to the order\ of George Furst,
counsel for the petAtioning creditors.
Later Furst wanted the check taken
back and cash paid to him. testified
Merlis. In accordance with this ar
rangement, he sent ,Furst 800 in
cash. Asked why heSdid not bring
the money himself to FNnEst, the witt
ness said he did not want to meet the
man who "made him lose $1,000 in ten
weeks"
At the morning sessionS Merlis made
a good impression and appeared to
substantiate the charge that ques-
tionable motives prompted the fore
ing of his company into bankruptcy.
He said his accounts receivable
amounted to s3,779.5s, alla of which
we're good and collectable.
Merl~ lost the ground he had
gained when. later In the day, he
told Judge Haight that he never at
tempted to regain any of tho ma
chinery and other equipment he in
stalled at his own expense.
Now didn't you know you had
more than enough assets to pay your
liabilities" asked the judge.
YES" answered the witness.
Then, why did you not tell your
lawyer to try and set aside the bank
ruptcy adjudication?"
81 left it to him to settle the thing.
He was my lawyer, and ! thought he
would do what was best for me-"
ibid you think 1t was best for you
10 settle claims of $500 on a twenty
per cent basis when you had $4,000"
II don't know" answered Merlis;
81 didn't expect to\save anything.
was disgusted when the bankruptcy
was started, and l said | would
never go into that business again.
That's why didn'tNtry to get back
the things l boughtsfor the factory
myself"
"Then, what became of this ma
chincry and eouipmenu" inquired the
judge.
Il don't know"
Now. Merlis." began Judge Haight
apparently exasperated,A III you think
you are going to sit there and have
me believe you put a lot OF ma
chinery into the place, and not only
did not try to regain it, but don't
know what became of 1t, you are very
much mistaken. Don't think ! am
going to believe any such story"
Il don't know what became OF II, i"
answered Merlis In a low tone. While
the Judge was giving his opinion Mer-
lis was very active. squlr1ning about
in his seat and applying a handker-
chief TO his face and neck with rapid
movements.
Judge Haight looked at the witness
for several moments without speak
ing. Then he asked:
tYou don't care what you do with
your money. do you?"
Samuel Moslin, vice-president of
the company, was the next witness.
He did not agree with the president
that all book accounts of the Union
Sash & Door Company were as good
as gold" About $500 or $1,000 of these
accounts were no good. he said.
1t developed that one of the tenants
l.. - nr.s1