In re Shenorhokian
In re SHENORHOKIAN
- Proceeding
- district
- Area
- other
- Panel
- Cosgrave (author)
Analysis
The court considered a petition to dismiss a Chapter XI bankruptcy proceeding due to the impossibility of the debtor's rehabilitation. The court granted the petition for dismissal, subject to the condition that the debtor pay the expenses of the appraisers and the conciliation commissioner.
| What the court decided | The model |
|---|---|
Petition for dismissal of bankruptcy proceedings granted“The petition for dismissal is granted, but on condition that the appraisers’ and conciliation commissioner’s expenses be paid.” | agree with court The court correctly applied the principle from Wright v. Vinton Branch that a court may dismiss proceedings if rehabilitation is impossible. The record recited shows the debtor's income ($800) is insufficient to cover production expenses ($440) and interest alone ($300+), leaving a deficit before other expenses. Thus, rehabilitation was indeed impossible, making dismissal the appropriate remedy under the law cited. |
The order itself: sound — The order is concise but logically sound. It cites the correct standard for dismissal (Wright) and applies it to the specific financial facts recited (income vs. expenses). It also cites the correct authority for the condition regarding expenses (Adair). The reasoning directly answers the motion with the right authorities.
Opinion — Cosgrave
COSGRAVE, District Judge.
The right of a secured creditor to the amount of his debt or ultimately to bid that amount at a sale of the property and thus obtain title to the property cannot be taken away from the creditor. Louisville Bank v. Radford, 295 U.S. 555, 580, 55 S.Ct. 854, 859, 79 L.Ed. 1593, 97 A.L.R. 1106. If it becomes evident that rehabilitation of the debtor is not possible, the court may dismiss the proceedings. Wright v. Vinton Branch, 300 U.S. 440, 464, 57 S.Ct. 556, 562, 81 L.Ed. 736, 112 A.L.R. 1455.
Here the debtor has a possible income of $800 a year, from which must be deducted at least $440 in production expenses, with taxes, interest, and general expenses to be paid from the remaining $360. Interest alone is something more than $300 yearly- It is evident that the debtor’s rehabilitation is impossible.
The petition for dismissal is granted, but on condition that the appraisers’ and conciliation commissioner’s expenses be paid. Adair v. Bank of America, February 28, 1938, 58 S.Ct. 594, 82 L.Ed. —.