Askov American. [volume] (Askov, Pine County, Minn.) 1914-current, 1934-07-19
Frazier Lemke Bankruptcy
Amendment


commissioners upon the petition of
hfteen farmers. Subsequently, by the
provisions of Section of an Act ap-
proved June Z, 1894 Public No. 296-
73d Congress), the Section was
amended so as to provide for the
appointment of Cancellation commits
sioners in counties having an agri-
cultural population of five hundred
or more farmers according to the last
available United States census with
out the requirement of a petition.
8. Section Is, as it existed before
the Frazler-Lemke Amendment. speci-
fically provides that the composition
or extension agreements contemplated
by the Section shall not reduce the
amount OF nor impair the lien of any
secured creditor, but shall only af-
feet the time and method of its LIQUID
alton" 1t also provides that the
composition or extension agreement
is to be accepted in writing by a ma
Jorlty in number of all creditors
whose claims have been allowed,
which number shall represent a ma
Jority in amount of such claims. The
agreement having been made, the
court shall confirm the proposed
agreement if satisfied that:
(a) the agreement includes an
equitable and feasible method of
liquidation for secured creditors
and of financial rehabilitation for
the farmer;
% the agreement is in the
best interest of all creditors; and
(c) the offer of composition or
extension and its acceptance are
in good faith.
4. BY the Frazier-Lemke Amend
ment it is provided that a farmer who
is unable to effect a composition or
extension agreement as contemplated
in Section Is or who feels aggrieved
by such agreement, may amend his
petition or answer and, in effect, re-
quest that he be allowed the further
benefits accorded by the Amendment.
5. The Amendment seeks to give
the farmer an opportunity to remain
in possession of his property:
(a) for period of six years,
under the terms of a liberal re-
purchase plan, where this is ac-
ceptable to his secured creditors;
or
(b) for a period of five years
by paying a fair annual rental
for the property, with the right
to purchase it at any time during
that period by paying into court
the full appraised price (or the
full reappraised price, if reap
praisal made at the request of a
holder of a lien on the real es-
tate results in the determination
Of a higher fair value of the
property.
3. The amendment provides with
respect to the appraisal of real estate
that either party may file objec-
tions, exceptions and appeals within
one year from the date of the order
approving the appraisal. In the
event exceptions were filed to an ap-
praisal, it would seem to follow that
a debtor would not be able to re-
purchase the property by paying the
appraised price into court until the
fair and reasonable value of the real
estate had finally been determined.
Z. The benefits of Section IS are
available only to a farmer who is
lnsolvent ii. e., the aggregate of
whose property, at fair valuation,
is insufficient in amount to pay his
debts), or who is unable to pay his
debts as they fall due.
8. 1t is believed, therefore, that a
very large number of farmers who
are now borrowers from the Federal
land banks would not be able to avail
themselves of subsection IS for the
reason that they are not insolvent and
are not unable to meet their debts
as they mature. However, it seems
possible that those farmers for whom
1t has been necessary to grant eX-
tensions and who are unable to meet
the payments on their loans as orig
inally scheduled may ask to be adj
judged bankrupts and claim the bene-
fits of the Amendment.
9. The Amendment provides that
a farmer who has been unable to
procure the consent of a majority in
number and amount of his creditors
to compromise or extension agree
ment as provided in the previous
paragraphs of Section IS, or who
feels aggrieved" by any such COM
promise or extension agreement, may
petition that he be adjudged bank
rupt and pray for the benefits pro-
vided in the Amendment. 1t would
seem that any compromise or extern
sion agreement that is less favorable
to the farmer than the provisions of
the Amendment might "aggrieve" the
farmer. However, it would seem that
where there has been made a fair
compromise or extension agreement
with which the farmer is able to
comply, the Bankruptcy Court might
deny the request of the farmer to
be adjudged a bankrupt unless the
aggregate of his debts is greater than
the fair value of his property.
10. Upon the amendment of pc
tition or answer for the purpose of
obtaining the relief afforded under