The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-06-18
GOING BROKE COSTLY
Huge Bankruptcy Fees Attached

WINGED the most skeptical that the
new Federal judge means business.
1T viii be the answering policy
of this court in all insolvency pro-
ceedings that the estate be admin
istered and assets conserved for the
benefit of the creditors and in the
interest of debtors in reorganiza-
tion," came an utterance from Judge
Martin on the bench at Jackson,
Tenn.
The judge had before him petit
ton from attorneys for an $500 fee
for passing on the validity of re-
organization case involving the
town of Martin.
He allowed no fee at all-and re-
jected the petition. He held that
he would not allow a fee for attor-
neyS passing on the validity of
something transacted in his court.
Judge Martin came home and
opened court at Memphis. A case
came before him where the referee |
was asking SIS for reopening the
case to allow a disclaimer in a
mortgage on a railroad mans home, |
held by the Hole. He disallowed
the SIS and laid down a rule that no
fees for disclaimers would be
allowed in the future.
The railroad employe had $45 in
wages coming to him. The court
also held that the $40 charged by
referees for office expenses in such
cases was too much and that in
future cases it would be S..
Fees Cut in Half
In similar cases the referee now
receives the original SIS allowed by
statute and IS expenses, a total of
$40. Previously referees would have
received $40.
only moderate fees will be al
lowed to referees, receivers, trustees
and attorneys. The manifest pur-
pose of the recent amendments to
the National Bankruptcy Act is to
provide for the liquidation of in
debtedness upon a compromise ba-
sis and re-establishment or reor-
ganization of debtors at moderate
costs through use of the judicial
machinery of the Federal courts"
Judge Martin said from the bench.
A few days later one of the big
receiverships" came before him
when attorneys for the receiver of
the Turley Mortgage Co. presented
q petition to approve the settlement
of a $4,000 claim of the Turley
company against the First National
Bank for $500. The claim was
termed doubtful"
A preliminary report showed:
Collections by receiver, $22,011.89:
fees and expenses of receiver and
attorneys, $22,O11.89; still due re-
ceiver, $500; paid to creditors
nothing.
Cites His Purpose
Reports of the attorneys showed
the receiver had been placed on
$3.50 a month basis by former
Judge. The court denied the petit
blOIl anu OlAC1SO O41C 1CNCANCA am
attorneys into court to show why
the receivership should not be ter
minated Immediately.
MY determined purpose in all
cases over which have jurisdiction
is to enforce my Interpretation of
the law and protect the interest of
creditors and debtors against eX-
orbitant costs" Judge Marin said.
The very next day petition was
filed for reorganization Of the Arm
strong Furniture Co., an old es-
tablished firm. Five trustees, who
agreed to serve without pay were
named to handle the affairs of the
company. The petition was granted
to forestall small creditors who were
about to force the company into in
voluntary bankruptcy proceedings.
Four of the trustees are creditors
and one an official of the firm.
Judge Martin praised the action
of creditors in seeking to conserve
the assets of the firm and offer
ing to serve without pay. He hopes
this will be a model case for similar
actions hereafter.