153 F. 335 | E.D. Pa. | 1907
In this case the bankrupts were threatened with criminal prosecution. There were a number of claims held by relatives of the bankrupts which were disputed, and it was alleged that a number of payments and transfers of property within four months of the time of filing the petition in bankruptcy were preferential and recoverable by the trustee. The assets of the estate were appraised at $22,700. This was a very small percentage of the total liabilities, which amounted to the sum of $237,500. The trustee and creditors, anxious to increase the assets of the estate ryith the least possible cost-arid delay, and the bankrupts, equally solicitous to secure immunity against prosecution, entered into an agreement with others, bearing date the 9th day of March, 1906, by which it is stipulated that certain transfers of property shall be returned to the trustee, and, in addition, a sum in cash should be raised by the friends and relations of the bankrupts, to be paid to .the trustee, and certain claims over which the bankrupts had some control should be withdrawn from the estate, in consideration of which the trustee stipulated not to furnish any evidence against the bankrupts in any criminal prosecution, and other parties agreed not to institute such prosecutions. °
The primary object of the trustee in entering into this contract was,
The sum of $19,189.80 was raised by parties entirely outside of the bankrupts, and paid in cash to the trustee, with direction to appropriate the same to the payment of a certain percentage on certain claims, and the balance to the general creditors, and it is now urged that the court should order that the directions as to how this sum should be appropriated should be disregarded by the trustee, and make an order upon him to appropriate the entire amount to the general creditors, so that each shall have his proportionate share. We have already held that this court will not approve this agreement, because it involves a compromise- on the question of a criminal prosecution, and as the payment of this amount to the trustee was made by third parties, and was part of it, the court will not interfere in any manner with its disposition.
The referee’s approval, therefore, of this agreement, and his order directing the trustee to carry it into' effect, is not approved, and the petition of the trustee for the -approval of the same is denied.