The opinion of the court was delivered by: BYERS
Motion to set aside order of referee in turnover proceedings.
Motion for an order punishing Robert M. Kozoroff and Walter Wodiska for contempt for non-compliance with the said order.
These motions were heard together and will be disposed of in one memorandum.
The turnover order is based upon a decision by the referee containing findings concerning the affairs of the partnership K & S Wholesale Grocery Co., of which the individual bankrupts were members, having to do with an unexplained loss of merchandise and profits said to have arisen from the operations of business between January 1, 1942, and May 6, 1942.
As at December 31, 1941, the merchandise inventory was computed at a total of $38,911.86, and the referee so finds. He was required to do so under the testimony after the bankrupt Kozoroff stated that the figure was true, while Wodiska professed no accurate knowledge on the subject.
Kozoroff says that the figures do not represent the cost price of the merchandise but included a write-up for alleged increase in value. Since the original records upon which the inventory was based had disappeared, the trustee was compelled to rely upon the figures prepared by the bankrupts and stated on their behalf to be true.
That finding is sustained by the evidence.
As to purchases of merchandise between January 1, 1942, and May 6, 1942, the referee finds that such were made in the total sum of $149,150.69, based upon entries contained in the purchase ledger, not supported, however, by invoices.
The finding is justified by the evidence and is sustained.
During the same period total sales were made in the sum of $165,998.66 as per the sales register.
That figure was based upon the records of the bankrupts and is sustained by the evidence.
The merchandise on hand at the close of the said period was sold at public auction for $5,277.32, and also the bankrupts were credited with a vague special sale in the sum of $300, making a total of sales of $171,575.98; this figure, subtracted from $188,062.55, the sum of the inventory at the start of the period, and the purchases made as stated, leaves a balance of $16,486.57 with which the referee charges the bankrupts, on the theory that they have failed to account for merchandise of that value, and according to the finding it is still in their possession or under their control.
In addition, he finds that the bankrupts realized from the sale of merchandise during the said period profits computed at the rate of 4%, amounting to $6,639.94, which sum is deemed to be in their possession or under their control, and accordingly he has ...