In re Western States Building-Loan Ass'n
In re WESTERN STATES BUILDING-LOAN ASS'N
- Proceeding
- district
- Area
- probate
- Panel
- McCormick (author)
Analysis
The court reviewed a bankruptcy referee's order declining to approve the election of R. E. Allen as trustee in bankruptcy. The court confirmed the referee's decision but directed the referee to permit all valid creditor claims, including those previously voted for Allen as receiver, to be counted in the trustee election.
| What the court decided | Standard it applied | The model |
|---|---|---|
Confirmed the referee's order declining to approve the election of R. E. Allen as trustee in bankruptcy.“his order dated November 3, 1931, declining to approve the election of R. E. Allen as trustee in bankruptcy herein is confirmed” | abuse of discretion | agree with court The court found that the record did not clearly show an abuse of discretion by the referee in exercising supervisory power over the selection of the trustee. This is the correct standard for reviewing a referee's discretionary decisions under the Bankruptcy Act. |
Directed the referee to permit all valid and existing claims of creditors, including those previously voted for R. E. Allen as receiver, to be voted at the trustee election.“with direction, however, to said referee, to permit to be voted at an election for trustee all of the valid and existing claims of creditors, including those that had been heretofore voted for the former receiver of the Western States Building & Loan Association, to wit, R. E. Allen.” | unclear | agree with court The court intervened to ensure that the election process included all valid claims, correcting a procedural deficiency in the previous vote without overturning the referee's ultimate decision on the trustee's qualification. |
Dissolved and discharged the restraining order issued against the referee from conducting the first meeting of creditors.“The restraining order heretofore issued herein restraining the referee in bankruptcy from conducting the first meeting of creditors called for the purpose of electing a trustee is now dissolved and discharged.” | unclear | agree with court The court lifted the injunction to allow the election process to proceed under the new directions regarding the counting of claims. |
The order itself: sound with gaps — The order is brief and procedural. It correctly applies the abuse of discretion standard to the referee's decision but provides minimal reasoning for the specific direction to include previously voted claims. It does not cite specific case law, relying instead on the statutory framework.
Opinion — McCormick
McCORMICK, District Judge.
Upon examination and consideration of ■transcript of evidence at hearing before the referee for the election of a trustee in bankruptcy herein, it cannot be clearly determined under the facts shown by the record that the referee abused the discretion1 lodged in him under the Bankruptcy Act and General Orders pursuant thereto vesting him with supervisory power over selection of trustee, and his order dated November 3, 1931, declining to approve the election of R. E. Allen as trustee in bankruptcy herein is confirmed, with direction, however, to said referee, to permit to be voted at an election for trustee all of the valid and existing claims of creditors, including those that had been heretofore voted for the former receiver of the Western States Building & Loan Association, to wit, R. E. Allen.
An exception to the aforesaid ruling is allowed and noted for California Title Company, a corporation. The restraining order heretofore issued herein restraining the referee in bankruptcy from conducting the first meeting of creditors called for the purpose of electing a trustee is now dissolved and discharged. An exception to the aforesaid ruling is hereby noted and allowed to said California Title Company, a corporation.