The opinion of the court was delivered by: BYERS
This is a motion to vacate an ex parte order granted October 23, 1933, for an examination, under 21a of the Bankruptcy Act (11 USCA § 44 (a), of certain persons therein named.
It appears, from the papers on which the said order was based and the petition for the order to vacate, that the assets of the alleged bankrupt are held by equity receivers appointed by this court on July 14, 1933. By the latter papers it also appears that an answer has been filed on the part of the alleged bankrupt, denying insolvency.
If the latter issue were to be determined in favor of the alleged bankrupt, the expense involved in the examination heretofore ordered and already undertaken would impose an unnecessary charge upon the estate to be administered.
The affidavit upon which the order for an examination was based recites the making of certain preferential payments while insolvent, on the part of the alleged bankrupt, and the facts in connection therewith would not be of moment if the issue of solvency were to be resolved in favor of the alleged bankrupt.
Therefore it would seem that, as a matter of discretion, the examination under 21a should be suspended until the issue of solvency can be determined, and, to that extent, the present motion will be granted.
If circumstances should arise requiring a modification of this determination, application on the part of the petitioner in bankruptcy can be made on notice to the alleged bankrupt.
The order for an examination therefore will not be vacated at the present time, but the taking of testimony will be stayed as indicated.
Settle order on one day's notice.
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