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Full-Text Articles in Law
Principal And Surety - Right Of Surety To Subrogation To Claim Of Creditor Against Insolvent National Bank, William C. Whitehead
Principal And Surety - Right Of Surety To Subrogation To Claim Of Creditor Against Insolvent National Bank, William C. Whitehead
Michigan Law Review
At the closing of defendant bank the commonwealth of Pennsylvania had on deposit $135,000, which was secured by the bond of defendant with plaintiff as surety, and a pledge of bonds of $12,000 par value. The commonwealth received the first dividend, amounting to forty per cent, and plaintiff paid the balance, subtracting $12,441.44 obtained on the intermediate sale of the bonds. Plaintiff contends that it is entitled to subrogation on the basis of the full amount of the original claim of the commonwealth against defendant; and that dividends subsequent to the first should be paid on that claim, although not …
Bankruptcy - Corporate Reorganization - Section 77b - Chapter X Of The Chandler Act - Boyd Case Rule, Edmund O'Hare
Bankruptcy - Corporate Reorganization - Section 77b - Chapter X Of The Chandler Act - Boyd Case Rule, Edmund O'Hare
Michigan Law Review
A subsidiary of the defendant corporation filed a reorganization petition under Section 77 B of the Bankruptcy Act and defendant presented a claim of over nine million dollars as a creditor, the claim being grounded upon moneys paid by defendant to the subsidiary for its benefit, management and supervision fees, rental and interest charges, and declared but unpaid dividends. Defendant owned about ninety-eight per cent of the common stock of the subsidiary. As the result of objections by the trustee and preferred stockholders of the subsidiary, defendant's claim was compromised at five million dollars. The reorganization plan provided in part …
Collateral Liabilities Under Section 77b, Homer Kripke
Collateral Liabilities Under Section 77b, Homer Kripke
Michigan Law Review
The passage of section 77B of the Bankruptcy Act in 1934 suggested to some lawyers the possibility of using the section as a means of modifying or eliminating the responsibility of persons collaterally liable on obligations for which the corporation to be reorganized or its property was also responsible. The question arose in two common types of situations: (1) guaranties of payment of dividends on capital stock; (2) liability for payment of the bonds or other indebtedness of corporations. In either of these situations, can the liability of persons other than the corporaticm be discharged or modified by reorganization of …
Corporations-Validity Of Option To Convert Preferred Stock Into Mortgage Bonds
Corporations-Validity Of Option To Convert Preferred Stock Into Mortgage Bonds
Michigan Law Review
A corporation issued preferred stock, with a fixed dividend rate, power to elect a director voting as a class, and an option in the holder to convert, at his election, into mortgage bonds which were issued at the same time. After a substantial indebtedness had been incurred by the corporation, the stockholders exercised their option to convert into bonds. The corporation then went into bankruptcy, and in reorganization proceedings, the bondholders claim a preference over general creditors. Held, that the former holders of the preferred stock were stockholders and not creditors of the corporation and that, in the absence …
Effect Of Insolvency Proceedings On Creditor's Right To Interest, Fred T. Hanson
Effect Of Insolvency Proceedings On Creditor's Right To Interest, Fred T. Hanson
Michigan Law Review
Where the claims of all creditors are of the same class and. assets are insufficient to pay in full the amount due on all claims when insolvency proceedings are begun, the general rule is that interest thereafter accruing will not be included in computing dividends on claims. The reasons usually given for this rule are: (a) The delay in payment is not the act of the debtor but is an act of the law for the mutual benefit of all the creditors. (b) In the case of claims bearing different rates of interest, it would be inequitable to permit the …
Corporations-Dissolution-Distribution Of Assets Between Preferred And Common Stockholders
Corporations-Dissolution-Distribution Of Assets Between Preferred And Common Stockholders
Michigan Law Review
The Commonwealth Hotel Construction Co. became insolvent, and, after the creditors had been paid in full, the preferred and common stockholders disagreed to the distribution of the remaining assets. The articles of incorporation provided that the holders of preferred stock should be entitled to dividends at the rate of seven per centum per annum which should be cumulative "so that, if dividends for any past dividend period at the rate of seven per centum per annum shall not have been paid thereon or set apart therefor, the deficiency shall be fully paid or set apart, but without interest, before any …