133 F. 593 | S.D.N.Y. | 1904
This is a motion to confirm a proposed composition. The bankrupt has offered in composition to each credit- or preferred stock in the corporation W. E. Woodend & Co. equal to the full amount of his claim, and in addition an amount of common stock equal to 10 per cent, of his claim. The corporation has been organized since the bankruptcy. The bankrupt and two other persons are incorporators. The certificate states that the object of the corporation is to carry on the business of stock, bond, and produce brokerage; that the amount of its capital stock is $400,000, consisting of 4,000 shares of the par value of $100 each, 2,500 shares being preferred stock and 1,500 common stock; that the holders of the preferred stock shall have no vote, but that the holders of the common stock shall have exclusive voting power; and that the amount of the capital with which the company shall begin business is $1,000. The amount of the stock which has been deposited for the purpose of carrying out this composition is 2,270 shares of preferred stock and 227 shares of common stock. The statute under which the company was incorporated prohibits the issue of stock except for cash or property. There is no proof that the stock has been issued for cash or property. It is asserted by the counsel for the objecting creditors that the entire stock was originally issued to the bankrupt, that $1,000 in cash has been contributed as capital, and that the consideration for the issue of the remaining $399,000 of stock was the right to use the name and credit of the bankrupt and the good will of the stock brokerage business formerly carried on by him. If this is so, in my opinion the transfer of such rights is not a transfer of property, within the meaning of the statute. Even if such rights might be held to be property, it seems doubtful whether they are worth $39.9,000, in view of the facts that
The motion to confirm the composition is denied.