Groendyke v. Gold (131 F.2d 573, 1942)

MINTON, Circuit Judge.

J. C. Groendyke Company, herein referred to as the corporation, filed a petition for reorganization under Chapter X of the Bankruptcy Act, 11 U.S.C.A. § 501 et seq. A plan of reorganization was approved by the court, but because the corporation was unable to borrow the money required by the plan, it did not go into-effect, and finally a trustee in bankruptcy was appointed.

During the reorganization proceedings, covering a period of over a year, the corporation by order of the court was left in charge of its assets, consisting of an industrial plant and other property estimated to be worth $350,000 as a going concern. Under the court’s order, the corporation, while thus in possession, was to have and exercise all the powers oí a trustee in bankruptcy and of a receiver in equity. It was to “manage, maintain, operate and keep in proper condition and repair the assets and property of the Debtor” wherever situated, and “to employ and discharge and fix the compensation of all employees, and to collect and receive the income, rents, revenues and profits of said assets, properties and business, to collect all outstanding accounts, to continue until further order of this Court the business of the Debtor making purchases of supplies and sales of products in the regular course of business, all according to law and subject to such’ supervision and control by the Court as the Court may exercise by further orders applied for herein.”

At the time the corporation took over the possession and operation of its own property under the court’s orders, it had on hand $6.28 in cash. During the more than one year it operated and had possession of its property and business, its cash receipts were $5,690.88, and its disbursements were $5,696.79, leaving a balance on hand at the close of the period of 37