Opinion · District Court, S.D. New York

In Re Francfair, Inc.

In Re Francfair, Inc., 13 F. Supp. 513 (District Court, S.D. New York 1935)

Type
Opinion
Court
District Court, S.D. New York
Jurisdiction
New York
Date
1935-06-03
Topic
finance

BONDY, District Judge. The debtor was incorporated January 2, 1935. Its petition for reorganization under section 77B (11 U.S.C.A. § 207) was filed January 15, 1935. The application for an order approving the petition was not made until April 22, 1935. The only asset of the debtor is one parcel of real estate, known'as the Franconia Hotel, 20 to 26 West Seventy-Second street, in the borough of Manhattan.

Citator

UpLaw has not yet analyzed In Re Francfair, Inc.. The absence of a flag is not a finding that it is good law.

Cited by
9 opinions
IN RE FRANCFAIR, INC., (S.D.N.Y. 1935)
13 F. Supp. 513
In re FRANCFAIR, INC.
No. 61421.
United States District Court, S.D. New York.
June 3, 1935.
In the matter of Francfair, Incorporated, debtor. On motion to dismiss the debtor's petition for reorganization under the Bankruptcy Act.

Motion granted.

Pollock Nemerov, of New York City, for petitioner.

Burnstine, Geist, Netter Hirst, of New York City, for trustee.

Harry Rodwin, of New York City (Edward F. Keenan, Irving H. Jurow and Joseph Lapidus, all of New York City, of counsel),West Page 514for Superintendent of Insurance of A State of New York, as Rehabilitator of New York Title Mortgage Co.
BONDY, District Judge.
The debtor was incorporated January 2, 1935. Its petition for reorganization under section 77B (11 U.S.C.A. § 207) was filed January 15, 1935. The application for an order approving the petition was not made until April 22, 1935.

The only asset of the debtor is one parcel of real estate, known as the Franconia Hotel, 20 to 26 West Seventy-Second street, in the borough of Manhattan. It was transferred to the debtor at about the time of its incorporation by the First People's Trust of Boston, a Massachusetts trust, in exchange for all the capital stock of the debtor, its promissory note for $345,000, and its assumption of the payment of the first mortgage thereon of $835,000. Judgment of foreclosure had been entered against it before the transfer, and it was to have been sold under a decree of sale April 29, 1935.

The mortgage amounts to $835,000, unpaid interest to $149,832.73, and unpaid taxes to $85,195.20, a total of $1,070,027.93.

The property has been appraised at $834,970. In 1933 and 1934 the property yielded no more than just about enough to pay taxes.

It does not appear that the petitioning debtor has any equity in the property, or that there is any reasonable probability that a successful reorganization can be had, or that anything can be accomplished by interfering with the rights of the holders of the mortgage or mortgage certificates to sell the property. Manati Sugar Co. v. Mock (C.C.A.)75 F.2d 284.

Moreover, a petition filed on January 15, 1935, to reorganize a corporation organized January 2, 1935, for the purpose of acquiring a piece of real estate already under foreclosure and encumbered by liens exceeding its value and transferred to it by trustees of a trust in consideration of all the stock of the corporation, the trust so far as the record shows being solvent and continuing in control of the property, cannot be considered to have been filed in good faith. Compare Shapiro v. Wilgus,287 U.S. 348,53 S.Ct. 142,77 L.Ed. 355, 85 A. L.R. 128.

The motion to dismiss the debtor's petition accordingly is granted.West Page 525