The New York herald., 1922-12-10
KARDOS DENIES FIRM
CHEATED IN FAILURE
John Burke's Partner In
sists He Can Explain
$4,000, 900 Assets.
AUDITOR rs DISPUTED
Total Liabilities of Unse-
cured Creditors Put at
$1,501,816.
GOODNEY sPURNs DEBT
Asserts He Owes Nothing in
Reply to Charge Of 1,000-
600 Due From Him.
GooDNEY sPURNs DEBT

with John Burke, formerly Treasurer
of the United States, in Kardos &
Burke, bankrupt stock brokers.
charged yesterday that the report of
Charles H. Lobell, creditors auditor,
that Kardos was unable to explain
more than s2,oo0.00O in assets was
absolutely false" He asserted that
the original schedules are correct and
that Lobeu has bungled the figures.
Kardos will make his own recheck
ing Of the books. and for that purpose,
by PERMISSION of Robert P. Stephen
son, trustee. began making photo
static copies OF the 800 books and
documents.
Max Goodney, who, according to Lo-
BELLS report, owes the bankrupts 1884,
800 in an account known as No. 700.
could not be found by reporters. At
911 Simpson street. The Bronx. the adj
dress given at the last bankruptcy
hearing. it was said Goodney had not
lived there in year.
uOOOney Dcn1cS DcDtns
Arthur L. Ross. lawyer for Kardos,
gave out statement purporting to
come from Goodney which said:
THE statement that ] owe the firm
of Kardos & Burke s1,000o00 Is abso-
lutely incorrect. I owe them nothing"
Ross said he could not direct report
ers to Goodney. but finally sent them
to Philip c. Samuels, a lawyer of 2l7
Broadway, who said he represented
Goodney. Samuels refused to say where
Goodney might be found.
Lobell said the first record he found
of the Goodney account was of June,
1921. and that it ran until the time of
the bankruptcy. The account of the
June date. he said, was carried over
|. from other sheets which he has been
unable to find. He said he had found
a large number of confirmation slips
made out to Goodney and. note ap-
parently being Goodney's directions to
kardos & Burke to hold his mail at
their offices.
Statement by Kardos.
Kardos issued q statement In which
he said:
1.-The future will bear me out that the
failure of Kardos g. Burke, while unfor-
tunate for every one concerned, was
THE exact assets and liabilities of
Kardos & Burke are easily ascertainable
by any one who wishes to take the
trouble of looking up the schedules as
filed with the referee, and also the report
and account of Robert r. Stephenson,
the trustee. The schedules, In my opin-
ion. are absolutely correct. The assets,
including securities. are shown to be
S1,140, 5S060. and the total liabilities, in
cluding secured creditors. are shown to
be So, 46,S3S.17. The secured creditors,
however, having been paid out of the Sc
curities in their hands, the total liabili-
ties of unsecured creditors as shown by
the schedules amount to $1,501 ,S16.40.
These figures do not include the real
estate of ex-United States Treasurer
Burke as scheduled. the value of the
equities in life insurance policies, uncol-
lected balances from abroad and the
Stock Exchange seat. all OF which should
be added to the assets.
AT the examination Charles Isobell
charged me with Withdrawing over
$500, 900 from the firm. He has carefully
avoided reporting that I have put into
the firm over s600.o00. AS a matter of
fact, I produced checks before the ref
cree at the hearing yesterday that put
into the firm from my personal account
S692.543.
When I get my Inning / win account
for everything"
Ross explained the reorganization and
100 per cent. settlement statement sent
to creditors on his letterhead which was
questioned at the hearing:
I'm the plan of reorganization the fig
ures were based upon the assets as a go
Ing concern. which naturally were much
larger than what a liquidated defunct
concern could realize. There were in
cluded In these figures items at cost and
good will of the business. Since the
statement was made by the creditors
committee on reorganization and since
the estate has undergone administration
In the last eight months, assets which
would have remained with the reorgan
lied firm intact we're naturally taken out
by creditors, who claim to have been
entitled to them.
Assets In foreign countries were at
tached by different foreign creditors and
therefore were dissipated in the courts
over there. These are the real and true
reasons why there Is n shrfnkare"