The weekly tribune and the Cape County herald. (Cape Girardeau, Mo.) 1914-1918, 1915-10-01
SAYS BANKRUPTS
Are BUNCOED BY
ST. LOUIS FIRMS
o. A. Knehans, U. S. Referee
in Bankruptcy Opposes Ad-
justment Companies.
FEDERAL OFFICIAL
PREDICTS GOODTIMES
Failures Have Decreased Fifty
Per Cent in Past Three
Months, he Says.

| business men IN Southeast Missouri
whom a general depression forced into
insolvency in the last year, have been
"duped and taken in" by a Clever
game" played by st. Louis adjust
ment companies, U. s. Referee in
Bankruptcy Oscar A. Knehans de-
clared yesterday afternoon.
Under the cloak of friendly out
side -the-court" receivership, houses
encOuntering financial difficulties have
been MIXED of vast amounts of assets
| that should have been directed to cred
itors and the consequent establishment
of the firms future credit, he said
The arraignment of so-called adjust
ment companies was made by Judge
Knehans in an interview with a re-
porter for The Tribune, at the close Of
what may be termed a season of bank
ruptcy suits which has not been
equalled for many years.
In the last year, bankruptcy petit
tions were filed in the United States
/ District Court at the rate of as high
as four of five in single day. The
last three months has seen a marked
decrease in the number of failures, and
Judge Knehans yesterday remarked
that he believes the business condition
has been altered to the extent that the
number will be very few from now on.
Giving a comparative estimate of
the number of bankruptcy petitions
that have been filed in the last six
months, Knehans declared that the
first quarter of the year recorded more
than double the number filed in the
| last three months.
In this court alone, the petitions five
months ago were filed at the rate of
two a day, and in st. Louis, many days
saw as many as six petitions on the
clerks desk.
The large suits were filed early, and
in recent weeks only small petitions
I have been taken to the court.
Continuing Knehans' statement con-
corning the adjustment firms, he said
that the notion prevailed among a
great many of the business men in the
lower counties that to get into the
Federal Court entailed much greater
expense than a settlement outside.
Such adjustment concerns virtually
made excellent business capital of that
impression and worked it for all it
was worth, he declared.
He outlined the manner some adj
justments outside of court were made
as he has learned in the last six
months experience. Houses have be-
come Strengthened financially. This
| fact soon is learned in business cir
cles and an offer is made to have the
adjustment completed for a stated
sum.
The proprietor is offered the entic-
ing proposal that all his debts will be
taken off his hands. A composition
will be affected with his creditors and
the matter settled amicably.
The adjustment concern usually is
close to the creditors in the beginning,
Knehans declared, and the deal is
readily put over, the consideration for
the adjusting being kept behind the
scenes.
Knehans declared that this consider
alton exacted has been exceedingly
high in many cases that have come to
his attention in his district. He points
, out that the expenses of the Federal
Court procedure are light in cOmpari-
son.
The referees trustee who takes
charge of the estate is given per
cent of the funds paid out to creditors
and the court charge is one per cent,
which goes to the referee.
Knehans declared that the adjust
ment concerns that he arraigned are
far more ruthless in settling up the
affairs of an estate than court officials
in some cases, such firms have been
employed to draw out part of the as