Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

IN RE FADA RADIO & ELEC. CO.

June 16, 1955

In the Matter of FADA RADIO & ELECTRIC CO., Inc., Debtor


The opinion of the court was delivered by: DIMOCK

A creditor moves for an order transferring this Chapter XI proceeding, 11 U.S.C. § 701 et seq., to the United States District Court for the District of New Jersey upon the ground that the case is laid in the wrong court of bankruptcy.

The debtor says that the case is not laid in the wrong court of bankruptcy and, even if it is, the interest of justice requires that it be retained in this court.

The pertinent statutory provisions involved have not yet been the subject of many reported cases. They are to be found in subdivisions (b) and (c) of section 32 of the Bankruptcy Act, title 11 U.S.C. § 55(b) and (c). Subdivision (a) of that section is an old provision for consolidation of two bankruptcy proceedings filed in different districts where each has jurisdiction. Subdivisions (b) and (c) are new, having been added in 1952. They read as follows:

 '(b) Where venue in any case filed under this title is laid in the wrong court of bankruptcy, the judge may, in the interest of justice, upon timely and sufficient objection to venue being made, transfer the case to any other court of bankruptcy in which it could have been brought.

 '(c) The judge may transfer any case under this title to a court of bankruptcy in any other district, regardless of the location of the principal assets of the bankrupt, or his principal place of business, or his residence, if the interests of the parties will be best served by such transfer.'

 It will be observed that under subdivision (c) the judge 'regardless of the location of the principal assets of the bankrupt, or his principal place of business, or his residence' may transfer any case to another district 'if the interests of the parties will be best served by such transfer.' Thus I have no doubt of my power under subdivision (c) to transfer this case to the District of New Jersey if I should find that the interests of the parties would be best served by such transfer.

 Subdivision (b) is more restricted. Instead of being applicable to any case, it comes into play only where a case is 'laid in the wrong court of bankruptcy' and even then the court is limited to a transfer 'to any other court of bankruptcy in which it could have been brought.' Thus subdivision (b) deals only with proceedings brought in the wrong district and gives power to transfer such a proceeding only to a district in which it could properly have been brought. Moreover, this can only be done in the interest of justice. That sounds as if Congress were directing that a case laid in the wrong district should stay there unless the interest of justice required that it be transferred to a district where it ought to have been brought. I cannot believe that that is the correct interpretation of the subdivision. A somewhat more reasonable interpretation is that the intention of Congress was to provide that a case laid in the wrong district need not be dismissed if the interest of justice requires that it be transferred to a district in which it could have been brought. Still a third interpretation, and the interpretation which I adopt, is to be found in the report of the House Judiciary Committee which accompanied the bill, House Report No. 2320 on S.2234, 82nd Cong.2d Sess. 1952. It deals with this subdivision (b), referring to it as the first of the subdivisions which the bill proposed to add, and says 'Under this first subdivision, the judge may upon timely and sufficient objection transfer a case brought in the wrong court of bankruptcy. * * * Ordinarily, no doubt the venue rules in bankruptcy will serve the interest of justice, but in the event that in a special case they do not, the judge will have discretion to retain the proceeding.'

 Thus we have subdivision (c) which permits a transfer of a case 'if the interests of the parties will be best served' and subdivision (b) which, as interpreted in the report of the House Committee, permits the retention of a case in the wrong district 'in the interest of justice'. The whole field is thus covered. A case rightly or wrongly brought within a district may be transferred wherever convenience, represented in one case by the 'interests of the parties' and in the other by the 'interest of justice,' requires. A case rightly brought within a district may, of course, be retained there if the interest of justice requires and, under subdivision (b), a case wrongly brought within a district may be retained there if the interest of justice requires.

 The moving creditor, in support of its motion, says that this case is laid in the wrong court of bankruptcy and that therefore, under subdivision (b), the court should transfer the case to the bankruptcy court of the District of New Jersey where the debtor had its principal place of business and in which, therefore, the case could have been brought. The moving creditor supports that plea by the further statement that the interest of justice does not require the retention of the case in the wrong district in which it has been filed. Finally, the moving creditor says that, even if the district in which the case is laid, the Southern District of New York, is the right district, the court should transfer it to the District of New Jersey under subdivision (c) because the interests of the parties will be best served by such transfer.

 The moving creditor is right in its claim that the case is laid in the wrong court of bankruptcy. Section 2 of the Bankruptcy Act, title 11 U.S.C. § 11, provides as follows:

 '(a) The courts of the United States * * * are hereby invested, * * * with such jurisdiction * * * as will enable them * * * to --

 '(1) Adjudge persons bankrupt who have had their principal place of business, resided or had their domicile within their respective territorial jurisdictions for the preceding six months, * * *.'

 The debtor's petition alleges that it is a New York corporation 'and has had its domicile within the territorial jurisdiction of this Court, with a residence and domicile at 262 Central Park West, City of New York and its factory in Belleville, New Jersey for the preceding six months or for a longer portion of said six months than in any other jurisdiction.'

 As a matter of fact, the certificate of incorporation of the debtor gives the location of its principal office as the Borough of Queens, City of New York and County of Queens, and states that process may be served on the Secretary of State and that any such process is to be sent to Jacob M. Marks, 30-20 Thompson Avenue, Long Island City, New York. The address given in the petition, 262 Central Park West, City of New York, is the address of debtor's president, Jacob M. Marks, who resides there, occupying the penthouse. He is listed in the telephone directory as a resident of 262 Central Park West, with an office at 525 Main Street, Belleville, New Jersey. The ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.