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IN RE ATLANTIC STEEL PRODS. CORP.

December 20, 1939

In re ATLANTIC STEEL PRODUCTS CORPORATION


The opinion of the court was delivered by: CAMPBELL

CAMPBELL, District Judge.

This is a hearing upon a petition for review by Shaw Factors Corporation, of the order of the Referee, dated November 6, 1939.

On June 7, 1939, the Debtor filed a petition for an arrangement under Chapter XI of the Bankruptcy Act, as amended, 11 U.S.C.A. § 701 et seq.

 In its amended plan of arrangement the Debtor proposed to pay its unsecured creditors in full, over a period in excess of two years.

 The plan was accepted by the required number of creditors, and its confirmation was adjourned to December 19, 1939, with the consent of the creditor's committee, in order to give the Debtor a reasonable opportunity to make the necessary deposit.

 On February 11, 1939, the Debtor, to secure a loan to it of $9,000, executed and delivered to Shaw Factors Corporation, the petitioner herein, a chattel mortgage on its plant and equipment, for the sum of $10,000.

 The mortgage provided by its terms that the Debtor was to pay the sum of $500 in reduction thereof on March 11, 1939; a further sum of $500 on April 11, 1939; and $900 a month for ten consecutive months thereafter.

 At the time of the filing of the petition, the Debtor had made payments of three installments, totalling $1,900. The fourth installment became due on June 11, 1939, four days after the filing of the petition. No other payments have since been made.

 The mortgage contained a clause that if it became necessary for the mortgagee to take steps to effect collection of the sums due it under the terms of the chattel mortgage, that it was entitled to add to the amount then due, the sum of 15% thereof, for counsel fees.

 The petitioner filed a claim herein, seeking to recover the balance of $8,100 of principal due it, under the terms of the Mortgage, legal fees of $1,215 and $1.35 protest fees, making a total of $9,316.35.

 The $1,215, demanded by the petitioner, seems to be based upon the fact that it made the motion in this proceeding for leave to foreclose its chattel mortgage.

 Subsequently, while the motion was pending, the Debtor and petitioner entered into the stipulation Exhibit A, annexed to the petition, in which the Debtor agreed that there was due to the petitioner, the sum of $9,693.12 instead of $8,100 actually due.

 The petitioner agreed that for a further payment to it of $1,308.41 it would extend the agreed balance of $9,693.12 for a further period, of approximately two years, if the Debtor made twenty-two monthly installment payments of said ...


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