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IN RE GELARDIN

August 20, 1941

In re GELARDIN, Inc.


The opinion of the court was delivered by: CAMPBELL

CAMPBELL, District Judge.

This matter comes before this Court on two separate petitions, to review the action of the Referee by two separate orders, each dated June 10th, 1941, which disallowed the said claims respectively as priority claims.

The same question is involved in each of the petitions for review, and they have been briefed together, therefore, one opinion will suffice.

 The bankrupt herein filed a petition under Chapter XI of the Bankruptcy Act, 11 U.S.C.A. § 701 et seq., and became a debtor in possession and under orders of the Court conducted business as such.

 On May 28th, 1940, the amended plan of arrangement was confirmed.

 On January 10th, 1941, the debtor defaulted in the making of the payments provided for in the amended plan of arrangement, and on the debtor's consent, it was adjudicated a bankrupt by order of this Court.

 The claims here in question are for merchandise, which the debtor purchased on credit from the two claimants, for sale in its business, between May 28th, 1940, the date of the confirmation of the amended plan of arrangement, and January 10th, 1941, the date of the debtor's adjudication as a bankrupt.

 The two claimants contend that they are entitled to priority for such claims as "costs and expenses of administration" under Section 64, sub. a(1) of the Bankruptcy Act, 11 U.S.C.A. § 104, sub. a(1).

 The plan provided for retention of jurisdiction by the Court.

 The order of confirmation, after providing for the disposition of the funds necessary to pay the priority claims and administration expenses, stated "Ordered, that this Court shall retain jurisdiction until the provisions of the Arrangement have been fully performed."

 The question of claims arising after confirmation is discussed without the citation of any authorities in Collier on Bankruptcy, 14th Ed., Vol. 8, pp. 1409, 1410, 1411, 1412; where at page 1412 it is said

 "But retention of jurisdiction after confirmation is not for all purposes, and does not give the court the jurisdiction over the business and affairs of the debtor which would be requisite to constitute new debts expenses of administration."

 At pages 1245 and 1246 the meaning of the retention of jurisdiction is discussed, and at page 1246 it is said "The purpose of retained jurisdiction is to permit action under Sec. 377 where warranted by the facts."

 The arguments there presented at length need not be repeated here, but I will point out certain ...


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