In re Bloomberg (48 F.2d 635, 1931)

SANBORN, District Judge.

It would serve no useful purpose to state in detail all of the facts shown by the record, which is quite voluminous. The bankrupt herself is twenty-two years old and a clerk in a store in Duluth. She lives at home with her father, Sam Bloomberg, and her mother. Her father managed the business of the Rothschild Shirt Shop, and she was merely the nominal proprietor. He left Rumania when he was about fourteen years old, came to Minneapolis in 1901 > or 1902, where he went into the restaurant business with a brother, and then came to Duluth shortly afterwards, where he went into the clothing business. After the store burned in which he was department manager, he became a salesman for Riehman Clothes, and in March, 1929, opened up the Rothschild Shirt Shop, Por a time he operated other stores in and near Duluth. It is claimed that he received goods for these stores on consignment from the Manhattan Woolen Milla and then sold them. He had an arrangement with the woolen mills for a 5 per cent, commission on the sales. His stores, aside from the one in Duluth, were subsequently taken over by the Boston Mills, a subsidiary of the Manhattan Mills, and he was made the buyer for the Boston Mills. The Manhattan Mills was a eoncern operated by a Mr. Cohen. Mr. Cohen and Mr. Bloomberg were closely associated in business. When Mr. Bloomberg reached a point where he could not or would not pay the creditors of the Rothschild Shirt Shop, he sent out first a circular letter asking the ereditors for an extension of time. Thereafter an involuntary petition in bankruptcy was filed against his daughter; and thereupon, and before schedules were filed, he gave to Mr. Cohen a list of all of the creditors with, the amounts of their claims and their addresses, and Mr. Cohen sent to them a circular letter stating that he was a creditor, and that he was anxious that the creditors should reeeive as large dividends as possible, and solieiting powers of attorney. Mr. Bloomberg called up a large number of the outside creditors on the long-distance telephone and requested them to send powers of attorney to Mr. Cohen. It is apparent that at that time Mr. Cohen and Mr. Bloomberg believed that they could put through a composition with the creditors of the Shirt Shop. At the first meeting of creditors, Mr. Cohen had powers of attorney from a majority of creditors, both in number and amount. The offer of composition was not accepted, and thereupon the creditors proceeded to the election of a trustee. Certain of the creditors objected to Mr. Cohen’s voting the claims for which he held powers of attorney, on the ground that these ha