Source: https://case-law.vlex.com/vid/297-u-s-216-606410650
Timestamp: 2020-08-14 15:11:27
Document Index: 51644271

Matched Legal Cases: ['§ 77', '§ 77', '§ 3', '§ 77', '§ 77', '§ 77']

297 U.S. 216 (1936), 533, Duparquet Huot & Moneuse Co. v. Evans - Federal Cases - Case Law - VLEX 606410650
Docket Nº: No. 533
Citation: 297 U.S. 216, 56 S.Ct. 412, 80 L.Ed. 591
Party Name: Duparquet Huot & Moneuse Co. v. Evans
Case Date: February 03, 1936
297 U.S. 216 (1936)
56 S.Ct. 412, 80 L.Ed. 591
Duparquet Huot & Moneuse Co.
1. A receivership in foreclosure suit, for the purpose of conserving the mortgaged property and collecting the rents pendente lite for the benefit of the lienholder, is not an "equity receivership," within the meaning of § 77B(a)(i) of the Bankruptcy Act. P. 218.
2. An equity receivership, within the meaning of § 77B, is a receivership for the purpose of conserving and reorganizing or winding up the business of the corporation. P. 218.
3. Under § 3 of the Bankruptcy Act, appointment of a receiver for the debtor's property is not an act of bankruptcy if not done while the debtor is insolvent. P. 224.
In 1934 and afterwards, "2168 Broadway Corporation" was the owner of a large hotel in the city of New York,
and of the fixtures [56 S.Ct. 413] and furniture contained therein. It had no other property. The holder of a mortgage on the hotel began an action of foreclosure and procured the appointment of receivers to collect the rents and profits. Soon after that appointment, three creditors of the corporation, holding claims a little in excess of $1,000, filed a petition in a District Court of the United States for the reorganization of the corporate debtor in accordance with § 77B of the Bankruptcy Act, alleging that the value of the assets was largely in excess of the liabilities, but that the debtor was unable to pay its debts as they matured. The District Court dismissed the petition on the ground that submission to the receivership in the suit for foreclosure was not an act of bankruptcy, and did not relieve the creditors from showing in their petition that such an act had been committed. 11 F.Supp. 404. The Circuit Court of Appeals for the Second Circuit affirmed, 78 F.2d 678, declining to follow a decision in the Circuit Court of Appeals, Seventh Circuit which upheld a different conclusion. In re Granada Hotel Corp., 78 F.2d 409, aff'g 9 F.Supp. 909. Because of this conflict and because of the importance of removing doubt as to the meaning of the statute, a writ of certiorari was granted by this Court.
which a Federal court would have had it appointed a receiver in equity of the property of the debtor by reason of its inability to pay its debts as they mature.
§ 77B(a). But jurisdiction
a petition stating that such corporation is insolvent or unable to meet its debts as they mature and, if a prior proceeding in bankruptcy or equity receivership is not pending, that it has committed an act of bankruptcy within four months,
If a receiver or trustee of all or any part of the property of a corporation has been appointed by a Federal, State, or Territorial court, . . . a petition . . . may be filed under this section at any time thereafter by the corporation, or its creditors as provided in subdivision (a) of this section,
The evils and embarrassments that brought § 77B into existence are matters of common knowledge. Corporations not insolvent in the statutory sense (United States v. Oklahoma, 261 U.S. 253, 260-261), but presently
unable to discharge maturing obligations, were without a statutory method for winding up their business without a sacrifice of assets. If they had recourse to voluntary bankruptcy,...