The Telegraph-courier. [volume] (Kenosha, Wis.) 1888-1946, 1923-03-22
TEA TRANSFER
CALLED LEGAL
Referee Maintains Transac-
tions of Union Food
Stores Were O. K.
CLEARS UP MIDDLE

Kenosha stockholders in the de.
funct Union Food stores, formerly the
Waukegan Tea company, are interest
ed in decision of John F. Harper,
federal referee in bankruptcy. Assets
of the Union Food Stores company,
according to the decision, will not be
turned over to Henry r. King, APP
pointed receiver Of the Waukegan Tea
company in the state circuit court.
At the same time Harper indicat-
ed that he would entertain the claims
of creditors of both the Union Food
Stores company and the Waukegan
Tea company. A number Of creditors
of the Waukegan company already have
filed claims in bankruptcy court, he
said.
King announced he would arrange
with his attorneys, Bloodgood, KEN
per and Bloodgood, to appeal Harper's
decision.
Transfer Was Legal.
An outstanding feature of iHarper's
decision and direct contradiction of
Receiver Kings contentious, was that
the organizers Of the Union Food COM
pany, s. l.. Chapman, P. M. Knippen-
berg, E. w. Arlington, E. W. Berry
and Walter M. Burke, did not unlaw-
fully appropriate the assets of the
Waukegan company.
Harper said the question of I'M
lawful appropriation of the Waukc-
gan assets by organizers Of the I'm
ion Food company was one Of the
principal points to be decided. His
decision indicates that there was no
irregularity in this regard.
Clears Kenosha Attorney.
The hearing entirely cleared At
torney Walter M. Burke Of Kenosha
who for a time had been attorney for
the company and whose name had been
drawn into the legal tangle which fol-
lowed. The evidence at the hearing
showed that since June 1921 Attorney
Burke had not been counsel for the
company and that the deals brought
before the court were all transacted
after that date. A Milwaukee attor
ney has been counsel for the company
since that date.
It was also shown that during the
time in question Mr.. Burke was not q
director of the company.
Moneys Collected.
To clinch his argument that the
Union Food company and the Wauke-
gan company were practically one
Harper said all the moneys collected
during the reorganization period were
deposited in two bal ks under the name
of Waukegan company.
He said officers and directors of the
Waukegan company exercised their
powers practically up to the time of
the bankruptcy of the Union Food
company.
"None of the funds on hand when
the Union Food company bankruptcy
was filed belonged to the Waukegan
Tea company. Such funds, of course,
can not be returned. 1t would seem
upon an exact accounting of all Of
the Tea company assets properly valu-
ed and with the company's liabilities
to its own creditors paid, that the bal
ance would be against the Tea COM
pany.
IF so, the stockholders are not in
terested in the assets now in court.
All of the common stock of the Tea
company and some of the preferred
stock was owned by the Union Food
company when the transfer of asests
was being made,~which would give the
Union Food company more equitable
consideration, at least as owners of
the property"
Must Deny Petition.
"There is no reason why the bank
ruptcy court should return to the state
court what assets there are here for
distribution among all creditors, both
of the Tea company and the Union
Food company. Some Tea company
creditors already have filed their
claims here. A distribution of assets
in the state court would probably be
to the creditors. of the Tea company
alone.
Cali evidence has been considered
and the briefs carefully studied. The
petition of the receiver must be
denied"
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