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HENKIN v. ROCKOWER BROS.

May 3, 1966

Alexander HENKIN, as Trustee in Bankruptcy of Towers Marts International, Inc., Plaintiff,
v.
ROCKOWER BROS., INC., Defendant



The opinion of the court was delivered by: LEVET

LEVET, District Judge.

 The plaintiff, Henkin, moves to strike

 
(1) defendant's first affirmative defense to plaintiff's second cause of action;
 
(2) defendant's second affirmative defense to plaintiff's second cause of action; and
 
(3) defendant's counterclaim to plaintiff's second cause of action

 on the ground that said defenses and counterclaim are insufficient in law.

 On April 5, 1963, Towers Marts International, Inc. (hereinafter "Towers") filed a petition for arrangement under Chapter XI of the Bankruptcy Act, 11 U.S.C. § 701 et seq., and on April 23, 1963, Towers was adjudicated a bankrupt. On May 7, 1963, the plaintiff, Henkin, was duly elected Trustee in Bankruptcy of Towers and is now acting as said Trustee.

 Prior to said bankruptcy, on April 19, 1961, Towers and defendant Rockower Bros., Inc. (hereinafter "Rockower") had entered into a so-called Master Licensing Agreement in the City of New York whereby Rockower agreed to operate leased men's wear departments in 18 stores owned by Towers. The results of that agreement are the subject of this suit and of the second cause of action which is in issue on this motion.

 Plaintiff's second cause of action seeks to set aside a transfer of $67,566.12 from Towers to the defendant Rockower as a preferential transfer under Section 60 of the Bankruptcy Act, 11 U.S.C. § 96.

 The complaint alleges:

 1. that on February 18, 1963, Towers was indebted to defendant for over $100,000 for moneys received by Towers from the proceeds of sales made by defendant and its wholly-owned subsidiaries at the store premises operated by Towers;

 2. that on February 18, 1963, within four months of filing its bankruptcy petition, Towers transferred to defendant $67,566.12 on account of an antecedent indebtedness;

 3. that at the time of the transfer Towers was insolvent, and that defendant or its agents at the time of the transfer had reasonable ground to believe that Towers was insolvent;

 4. that the effect of this transfer was to enable defendant to obtain a greater percentage of its debts over some ...


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