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In re Schumaker Construction Inc.

June 1, 1965

IN THE MATTER OF SCHUMAKER CONSTRUCTION, INC., BANKRUPT. IN THE MATTER OF A.C. HEITSCHMIDT, INC., BANKRUPT. DONALD PATRICK AND JOSEPH D. ANDERSON, D/B/A PATRICK AND ANDERSON, AND KENNETH F. SCHUMAKER, APPELLANTS,
v.
RAYMOND M. FOX, JR., TRUSTEE IN BANKRUPTCY AND EUGENE H. HAVILAND, ATTORNEY FOR THE TRUSTEE, APPELLEES.



Author: Hastings

Before HASTINGS, Chief Judge, and SCHNACKENBERG and SWYGERT, Circuit Judges.

HASTINGS, Chief Judge.

This appeal is concerned with the adequacy of fees allowed by the referee in bankruptcy and affirmed by the district court in bankruptcy proceedings involving Schumaker Construction, Inc., and A.C. Heitschmidt, Inc.

Appellants, Donald Patrick and Joseph D. Anderson, doing business as Patrick & Anderson, attorneys for the corporate bankrupts, and Kenneth F. Schumaker, President and a creditor of the bankrupts, appeal from the order of the district court affirming the order of the referee in bankruptcy fixing the fees for appellants Patrick and Anderson and fees for appellees, Raymond M. Fox, Jr., receiver and trustee and Eugene H. Haviland, attorney for the receiver and trustee.

On June 11, 1962, Patrick and Anderson as attorneys for the bankrupts filed a petition for reorganization of the corporations under Chapter X of the Bankruptcy Act, 11 U.S.C.A. ยง 501 et seq.

On August 2, 1962, both corporations were declared bankrupt and Fox, who had previously been appointed receiver, was appointed trustee. Haviland was approved and employed as attorney for receiver and trustee Fox.

On September 20, 1962, Fox filed inventories and appraisals of the assets of the bankrupts at the first meeting of creditors.

The assets of Schumaker Construction, Inc., were appraised by Fox at $88,251. Schumaker Construction, Inc., valued the same assets at $336,834.

On November 2, 1962, Fox filed petitions for the sale of personal property of the bankrupts. These petitions proposed that the assets be offered for sale at a private sale for thirty days and thereafter the assets remaining be sold at public auction.

A hearing was held on November 20, 1962 to consider these petitions. On this date, "after due hearing and noting the objections of creditors appearing in person and by counsel," the referee authorized Fox to sell the personal property of the bankrupts at public auction.

All assets of the bankrupts, except those surrendered to lienholders, were sold at public auction on January 17, 18 and 19, 1963. The sale price of the assets of A.C. Heitschmidt, Inc., approximately equaled Fox's appraisal thereof. The sale price of the assets of Schumaker Construction, Inc., was $224,761. These assets had been appraised by Fox at $79,751.

Appellant Schumaker and Lorraine J. Schumaker, his wife, owned the real estate leased and occupied by the bankrupts. The leases provided for Schumaker Construction, Inc., to pay $1,000 per month rent and A.C. Heitschmidt, Inc., $250 per month.

Due to nonpayment of rent under these leases, appellant Schumaker and his wife filed claims before the referee in bankruptcy for unpaid rents. The referee held a hearing and on December 6, 1963 entered an order allowing the claims for rent for the period of June 11, 1962 to July 15, 1963 in the amount of $11,000.

On February 1, 1963, Fox wrote appellant Schumaker stating that the "use of the property heretofore occupied by these corporations is now terminated" due to the sale of the assets of the bankrupts. Schumaker refused to accept the turnover due to conditions imposed by Fox ...


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