In re Juno Construction Co.
In the Matter of JUNO CONSTRUCTION CO., Inc., Bankrupt
- Proceeding
- district
- Area
- other
- Panel
- Hall (author)
Analysis
The assignee in a pre-bankruptcy assignment for the benefit of creditors petitioned for review of a bankruptcy referee's order surcharging the assignee with $1,528.72 in fees and expenses. The District Court affirmed the referee's order, holding that the assignee was not a protected purchaser and that the pre-petition fees were subject to surcharge due to the priority of the United States' tax lien.
| What the court decided | The model |
|---|---|
Affirmation of the Referee's Order surcharging the assignee with $1,528.72“For the foregoing reasons, the Order of the Referee in Bankruptcy surcharging the assignee as set forth in his Order of June 23, 1964, is hereby affirmed.” | agree with court The court correctly applied the Bankruptcy Act provisions regarding the jurisdiction to surcharge and the definition of a 'purchaser.' The assignee's fees were incurred pre-petition and thus not administrative expenses. The application of the tax lien priority to surcharge the assignee's fees is consistent with the cited Ninth Circuit authority (Meyer v. Bass) and Supreme Court authority (United States v. Scovil) regarding the status of assignees in bankruptcy. |
The order itself: sound — The order is concise but legally sound. It correctly identifies the statutory basis for the Referee's jurisdiction, distinguishes pre-petition fees from administrative expenses, and applies the correct legal standard for 'purchaser' status to deny the assignee protection. The reliance on Meyer v. Bass for the tax lien priority is appropriate for the Ninth Circuit.
Opinion — Hall
HALL, District Judge.
The assignee, under an assignment for the benefit of creditors, made within four months prior to the filing of the Petition in Bankruptcy, has petitioned for a review of the Referee’s Order of June 23, 1964, surcharging the assignee with the sum of $1,528.72, being the amount disbursed by the assignee for fees to himself and various services prior to filing the Petition in Bankruptcy.
The Referee has jurisdiction to re-examine and determine the propriety and reasonableness of charges claimed by the assignee, and surcharge the same if the Referee deems them improper or excessive. [11 U.S.C. § 11, sub. a(21)].
The assignee’s fees and expenses are not expenses of the administration of the bankrupt estate as they were not incurred subsequent to the filing of the Petition in Bankruptcy. [11 U.S.C. § 104, sub. a(1)].
The Statute of Limitations [11 U.S.C. § 29, sub. e] is not applicable to a surcharge in a proceeding such as here.
The assignee was not a purchaser. A purchaser is one who acquires title for a valuable consideration in the manner of a vendor and vendee. [United States v. Scovil (1954) 348 U.S. 218, 222, 75 S.Ct. 244, 99 L.Ed. 271].
The Referee’s conclusion to surcharge the assignee was proper in view of the Lien of the United States for taxes *205which existed prior to the assignment to the assignee. [Meyer v. Bass (9 Cir. 1960) 281 F.2d 728].
For the foregoing reasons, the Order of the Referee in Bankruptcy surcharging the assignee as set forth in his Order of June 23, 1964, is hereby affirmed.