Rasmussen v. Gresly

This is an appeal by the trustee of the Walrath & Sherwood Lumber Company, which was adjudged a bankrupt on December 31, 1932, from an order allowing the claim filed by Mrs. J. F. Gresly. Her claim was upon a promissory note for $11,000, dated December 26, 1930, due February 1, 1932, and bearing interest at 7 per cent. per annum. The objections to the allowance of the claim asserted that Mrs. Gresly was not a creditor; that she had surrendered her note about December 6, 1930, for preferred stock of the bankrupt of the par value of $11,000 to be retired December 31, 1934; that, since that time, the bankrupt had operated at a loss and without profits or surplus from which the stock could have been redeemed; that it had, after the surrender of the note, issued financial statements which did not include the note as indebtedness; and that the creditors had no knowledge of and had never consented to the redemption of the preferred stock by the bankrupt.