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In re Gibraltor Amusements Ltd.

March 15, 1963

IN THE MATTER OF GIBRALTOR AMUSEMENTS LTD., BANKRUPT. NATIONAL BANK OF WESTCHESTER, WHITE PLAINS, APPELLANT, THE WURLITZER COMPANY, WURLITZER ACCEPTANCE CORPORATION AND M. HALLSTED CHRIST, APPELLEES.


Author: Medina

Before LUMBARD, Chief Judge, and MEDINA and WATERMAN, Circuit Judges.

MEDINA, Circuit Judge.

National Bank of Westchester, White Plains, appeals from an order of the District Court for the Eastern District of New York, in bankruptcy, Walter Bruchhausen, Judge, reversing an order of Referee in Bankruptcy, Louis J. Castellano, which had granted the Bank's petition for leave to file an amended proof of claim. The opinion below is reported at 205 F.Supp. 685.

On March 18, 1960 the Wurlitzer Company filed an involuntary petition in bankruptcy against Gibraltor Amusements Ltd., three other creditors, William F. Wadsworth, Joseph Rae, and the Wurlitzer Acceptance Corporation, Wurlitzer's subsidiary, subsequently intervening as petitioning creditors on May 5 and 6, 1960. On March 21, 1960 Judge Zavatt appointed a receiver and issued the customary restraining order against all creditors. On March 31, 1960 the Bank sent the Receiver the following letter which was received on that date or shortly thereafter:

"March 31, 1960

"Halstead Christ, Esq. Bleakley, Platt, Walker, Hart & Fritz, Esqs.

290 Old Country Road Mineola, L. I., New York

"Re: Gibraltor Amusements Ltd.

"Dear Sir:

"Please be advised that National Bank of Westchester, White Plains is a creditor of Gibraltor Amusements Ltd. by virtue of a corporate guaranty duly executed on June 11, 1959 whereby Gibraltor guaranteed the payment of obligations of Sandy Moore Distributors Corp. and affiliated corporations up to $120,000.00. The present balance due and owing on the guaranteed indebtedness is approximately $91,000.00, plus interest. Gibraltor's obligation to National Bank of Westchester, White Plains is further evidenced by a statement and confession of judgment duly executed and delivered on June 11, 1959.

"We have been advised that you have been appointed receiver for Gibraltor by order of Hon. Joseph C. Zavatt dated March 21, 1960. You are hereby notified that National Bank of Westchester, White Plains objects to any distribution or transfer of any assets of Gibraltor to any creditor or other party, and to any temporary or permanent plan of operation of Gibraltor's business, unless such actions are consented to in writing by the Bank or unless such actions are expressly authorized by a valid order on notice issued by a court of competent jurisdiction.

"Very truly yours, NATIONAL BANK OF WESTCHESTER, WHITE PLAINS

By: MARTIN D. RYAN Senior Vice President"

On April 25, 1960 the Bank entered a judgment against the bankrupt in the office of the Clerk of Nassau County for $90,317.37, and the underlying claim was found by the Referee to constitute a debt, demand or claim provable in bankruptcy on the date of the filing of the petition. The adjudication of bankruptcy was made on August 19, 1960 and at the first meeting of creditors on September 7, 1960 the Receiver was duly elected Trustee, at which time he continued to have in his possession the letter from the Bank quoted above. The Statement of Affairs of the bankrupt, dated September 1 and filed September 7, 1960 listed the Bank as an unsecured creditor in the amount of $90,317.37, and the answer to the involuntary petition also listed the Bank as a creditor. Moreover, a ...


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