The New York herald., 1922-12-07
Bankruptcy Law Reform.
Evils OF the Present Method Of An.
pointing Receivers and Counsel.

To THE New YORK HERALD Many
commercial bodies. notably the National
Credit Mems Association and the Mer-
chants Association of this city, calling
attention to practices that have found
their way into the administration OF
the national bankruptcy law, are vigor-
ously agitating reforms. IL certainly Is
about time that necessary changes and
important reforms were introduced.
The most urgently needed reforms are
in connection with the appointment Of
receivers and receivers counsel. and
when these are brought about the
greater part Of the things of which COM
plaint Is now made will to no little ex-
tent right themselves.
In many cases In the Federal courts
In New York city. and what l shall say
prevails TO n greater or less extent In
some Federal courts outside of New
York city. receivers are not appointed
because they have any real and sub
stantial knowledge of the line of busi-
ness which they are TO take charge OF
or in some cases. of any line of buBi-
ness. In this city a nan who Is posted
can tell on the sixth day Of every month
when a new appointing Judge takes his
rlace the names Of 80 or 40 per cent of
the men or women who will during the
month be appointed receivers by tho
Federal court.
Sometimes the same person ia ap-
pointed on one day receiver for two or
three different businesses with no rela-
tion of any kind to each otner except
that each Is bankrupt or in trouble.
One OF the concerns for which he is APP
pointed receiver on that day may be a
foundry, another a millinery business
and the third stock brokerage con-
Germ II any business. man is interested
IN any kind of business and wants a
man to run Il for him or 10 extricate II
from its difficulties ne invariably tries TO
find the best man that he can get IN
that particular line. Receivers should
be appointed just as business man II
he owned a concern that he could not
operate himself would get a man to run
II for him. A receiver should be selected
with view 10 his fitness for the busi-
ness that he is called upon to handle
and n possible put back on It's feet.
Ny cure would be this: not to APP
point receiver Immediately when the
application is made but have the Judge
n necessary merely appoint proper
custodian. which IS what the bankruptcy
law contcmplates, or. II II 10 absolutely
essential. appoint really temporary oi
interim receiver and then give every
body who has any possible interest In
the situation an opportunity to come IN
and be heard at stated time. say In
FIVE or ten days. The hest notice OF
tho proposed hearing possible under the
circumstances should be given by publi-
cation or otherwise.
After tho Judge at this hearing has
permitted stockholders. bondhoiders
creditors and anybody else who Wishes
TO talk to say their say let him az.
point a. receiver who Is peculiarly suited
TO that particular Job You will then
nnd that Instead OF nominal receivers
which a large percentage Of the Federal
receivers IN New York city in my opln.
ion aro. tho courts will appoint rcceiv
ers who have vital idea and knowi-
edge of the business which they are
going to operate ana Of the cures neces-
sary u rid Il OF it's ills so a. TO save
II IL Il Is possible TO do so.
An unfortunate practice prevails e
quite serious extent with reference to