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IN RE SIEBAN & BYRNES

August 5, 1968

In the Matter of SIEBAN & BYRNES, INC., Bankrupt


The opinion of the court was delivered by: BONSAL

MEMORANDUM

 BONSAL, District Judge.

 Petitioner, on behalf of nine claimant-creditors, former employees of Sieban & Byrnes, Inc. (the bankrupt), has petitioned pursuant to § 39(c) of the Bankruptcy Act (the Act), 11 U.S.C. § 67(c), for review of an order of the Referee denying petitioner's application to file the nine proofs of claim nunc pro tunc.

 The nine claimants are members of Local 202, International Brotherhood of Teamsters (the Union) and, until April 29, 1966, were employees of the bankrupt, with which the Union had a collective bargaining agreement. On April 29, 1966, the bankrupt discharged its employees and executed a general assignment for the benefit of creditors.

 On May 5, 1966, an involuntary petition in bankruptcy was filed against the bankrupt and it was adjudicated a bankrupt on May 24, 1966.

 On May 11, 1966, the bankrupt filed with the Referee a schedule of debts and a list of its unsecured creditors and of creditors having priority under the Act (the bankrupt's list).

 On May 19, 1966, a proof of claim for wages due filed by claimant Harley (one of the nine) was returned by the Referee's office for the reason that there had as yet been no adjudication.

 On May 23, 1966 (prior to adjudication), petitioner wrote a letter to the bankrupt on behalf of the Union and its members who were former employees (the nine claimants) demanding payment of wages due and enclosing a list of the nine employees with their names and addresses. Petitioner states that at the time he wrote the letter, neither he nor the officers of the Union nor the employees were aware of the filing of the involuntary petition in bankruptcy of May 5, 1966, and that they knew only that there had been an assignment for the benefit of creditors on April 29, 1966. Petitioner states that no answer was received to his letter.

 On June 6, 1966, the attorney for the petitioning creditors filed with the Referee a list of creditors (the creditors' list). The creditors' list did not contain the names of any of the nine claimants, but listed the Union Welfare and Pension Funds as unsecured creditors. The bankrupt's list, on the other hand, listed 11 priority creditors (including six of the nine claimants, stating that their addresses were unknown) and the Union Welfare Fund and the Union Pension Fund.

 On June 9, 1966, notice of the first meeting of creditors was sent to all persons appearing on the creditors' list, which did not include the nine claimants but only the Union Welfare and Pension Funds.

 On June 15, 1966, claimant Harley again filed a proof of claim for wages due. The Trustee filed, and subsequently withdrew, his objection to Harley's claim in the amount of $81.75.

 On June 21, 1966, the first meeting of creditors was held in accordance with the notice sent to the persons appearing on the creditors' list. Except for Harley, the nine claimants did not file proofs of claim within the six months period prescribed in § 57n of the Act. (11 U.S.C. § 93(n))

 It appears that petitioner did not learn of the filing of the involuntary petition in bankruptcy, nor of the bankrupt's adjudication, until February 28, 1967. There followed a delay, due to the petitioner's illness, and, on March 15, 1968, petitioner wrote to the Referee explaining the reasons for the failure of the claimants to file proofs of claim.

 On May 7, 1968, petitioner moved before the Referee for permission to file the claims nunc pro tunc. A hearing was held on May 15, 1968, and on June 4, 1968 the Referee denied petitioner's motion. The Referee found that a notice was sent to all persons on the creditors' list, that the Union Welfare and Pension Funds were on the list, that the Union was located at 90 West Broadway, New York City, being the same address given for the Union Welfare and Pension Funds, and that one of the claimants, Harley, had filed a proof of claim on May 19, 1966 and again on June 15, 1966. The Referee concluded that "the Union had notice of the petition in bankruptcy since at least one of the employees had filed a proof of claim," and finding that the other ...


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