The Federal Reporter with Key-Number Annotations, Volume 272: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States and the Court of Appeals in the District of Columbia, June-August, 1921. Page: 1,019
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IN RE BERNSTEIN 1019
(272 F )
ing was on April 12th he did not err in refusing return on April 20th at
request of majority of dissenting creditors, and in proceeding'to allow
further claims until May 12th, when a majority of creditors assented to
the offer of composition.
In Bankruptcy. In the matter of Harry A. Bernstein and others,
alleged bankrupts. On objections to approval of referee's report and
certificate in composition proceedings, Order affirmed.
Jacobs & Jacobs, of Boston, Mass., for creditors.
Isaac Harris, of Boston, Mass.,'for alleged bankrupts.
MORTON, District Judge. This certificate raises a question of
practice of some importance in composition proceedings. The facts
(which are stated in the referee's certificate)'are briefly as follows:
It is a case of composition before adjudication. After the filing of
the petition the alleged bankrupts gave notice that they desired to offer
composition, and prayed that a meeting of their creditors might be call-
ed to consider their offer. Under the act (section 12 [Comp. St.
9596]), an alleged bankrupt may not offer composition until he has
submitted to examination at a meeting of his creditors. The notice of
composition and petition for a meeting of creditors was duly referred
to the referee, and the meeting was duly called and held. Apparently
no question arose as to examination; claims were proved and allowed,
and the offer in composition was duly filed. The meeting was then
adjourned.
Under out practice, the duties of the referee, after the filing of an
-offer in composition, are (1) to allow claims; (2) to certify the ac-
ceptance of the offer by a majority in number and amount of- claims
allowed, if it be accepted; (3) to fix the amount of deposit required from
the alleged bankrupt; and (4) to return the papers into court with his
(the referee's) report. The proceedings are governed by the provi-
sions of the act and General Orders, and by rules in bankruptcy of
this court numbered 7, 8, and 9. Rule 8 required that-
"The deposit shall be sufficient to pay the proposed percentage upon all un-
secured debts scheduled by the bankrupt, unless the court should otherwise
order."
In this respect the practice here differs from that in some other dis-
tricts, where the deposit required need be sufficient to cover only the
proposed percentage on debts proved and allowed. The practice here
was established by the late Judge Francis C. Lowell, soon after the
passage of the act, and has worked well It has been the custom for
referees to keep open the first meeting and allow claims to be proved
from time to time, until either the bankrupt applied for a certificate
that a majority in number and amount of the claims proved had as-
sented and the required deposit had been made, or upon motion of some
creditor, or upon the referee's own motion, the papers were returned
to the court because the alleged bankrupt had not diligently followed up
his offer.
In cases of composition after adjudication, the offer is made at a
meeting of creditors, further liquidation proceedings,are stayed while
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The Federal Reporter with Key-Number Annotations, Volume 272: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States and the Court of Appeals in the District of Columbia, June-August, 1921., legislative document, 1921; Saint Paul, Minnesota. (https://digital.library.unt.edu/ark:/67531/metadc38843/m1/1041/: accessed April 25, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.