Manufacturers Trust Co., Trustee, v. Becker et al. (338 U.S. 304)
U.S. Supreme Court · decided November 21, 1949 · Supreme Court Database (Spaeth)
- Citation
- 338 U.S. 304 · 70 S. Ct. 127
- Docket
- No. 55
- Argued
- October 20, 1949
- Decided
- November 21, 1949
- Term
- October Term 1949
- Vote
- 6–2
- Majority author
- Justice Clark
- Issue area
- Economic Activity
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Conservative
How the Justices voted
- Majority
- Chief Justice Vinson, Justice Minton, Justice Clark (wrote), Justice R. H. Jackson, Justice Frankfurter, Justice Reed
- Dissenting
- Justice Burton (wrote), Justice Black
Opinion excerpt
Mr. Justice Clark delivered the opinion of the Court. This proceeding in bankruptcy is on objections to the allowance of claims equal to the principal amount of bonds of the debtor acquired at a discount during its insolvency by close relatives and an office associate of directors of debtor. Petitioner’s objection that equitable considerations require limitation of the claims was dismissed by the referee, and the District Court affirmed. 80 F. Supp. 822. Following affirmance by a divided Court of Appeals for the Second Circuit, 173 F. 2d 944, we granted certiorari because the issue presented has importance in the administration of the arrangement and corporate reorganization provisions of the Bankruptcy Act. 337 U. S. 923. On January 8, 1946, Calton Crescent, Inc., sold its only property, an apartment house located in New Rochelle, New York, for $300,000 pursuant to a contract entered into in October 1945. Being unable to discharge in full its obligations under debenture bonds maturing in 1953, outstanding in principal amount of $254,450, debtor filed in May 1946, a petition under Ch. XI of the Bankruptcy Act, 11 U. S. C. § 701 et seq. Under the plan of arrangement, authorizing a dividend of 43.61% of the principal amount of the bonds, respondents Regine Becker, Emily K. Becker, and Walter A. Fribourg were to receive an aggregate dividend of $64,237.53 on allowance of claims…
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