This amount represents the wholesale cost of the merchandise, less the discounts allowed by the Zisblatt Company to the Grand Showrooms. It is our opinion that this is a fair and equitable award under the facts of this case.
V. The payment by the bankrupt to the defendant Meyer Zisblatt was not a voidable preference within the meaning of the Bankruptcy Act. The claim against this defendant will, therefore, be dismissed.
'Grand Rapids Factory Showrooms, Inc., a corporation, (hereinafter referred to as Grand Rapids) and,
'Zisblatt Furniture Co. Inc., a corporation, (hereinafter referred to as Zisblatt), for and in consideration of the mutual promises hereinafter contained and all the acts and deeds hereinafter set out, stipulate, agree and covenant one with the other that, * * *
'Whereas, Zisblatt is desirous of making loans from time to time from Grand Rapids and is ready, able and willing to deliver and pledge with Grand Rapids as collateral security for such loans, various articles of furniture, merchandise and chattels from time to time as such loans shall be made to it by Grand Rapids, now, therefore, it is agreed, stipulated, covenanted and contracted between the parties, that:
'1. Grand Rapids will loan and advance to Zisblatt from time to time such sum or sums of money as Zisblatt shall request and require for use in its business between the date of this contract and July 15th, 1940.
'2. Grand Rapids shall have the right, prerogative and privilege to refuse to make such loan or loans in any sum or sums as requested by Zisblatt if it shall deem itself unable to furnish such sum or sums if in its judgment its security shall be or may become impaired by virtue of the making of such loan or loans.
'3. As a condition concurrent with the making of the loan or loans of any sum or sums by Grand Rapids to Zisblatt, Zisblatt agrees that it will deliver to Grand Rapids and pledge with Grand Rapids a sufficient amount of furniture, merchandise and chattels which furniture, merchandise or chattels shall be held and retained by Grand Rapids as and for collateral security for the repayment by Zisblatt to Grand Rapids of any and all sum or sums of money advanced by Grand Rapids to Zisblatt; such furniture, chattels and merchandise shall also be held by Grand Rapids as collateral security for the payment of interest at the rate of six (6%) per cent per annum upon all such and any such loans.
'4. Zisblatt further agrees and covenants that the valuation of the furniture to be placed by it with Grand Rapids as collateral security for the repayment of such loan or loans shall be fixed and determined by the wholesale replacement value thereof and that in no event shall the valuation of such furniture, chattels and merchandise transferred by Zisblatt to Grand Rapids by way of collateral security exceed the net cost to Zisblatt of such furniture, merchandise or chattels.
'5. Zisblatt agrees that it will repay any sum or sums loaned to it by Grand Rapids on or before the 15th day of July, 1940 together with interest at the rate of six (6%) per cent per annum to be computed, however, on the basis of the amount of money outstanding and due from Zisblatt to Grand Rapids for such period on such sum or sums as shall remain unpaid.
'7. Zisblatt agrees that Grand Rapids shall have the right, option and privilege at any time prior to payment by Zisblatt of the full amount which shall be due to Grand Rapids from Zisblatt to sell and dispose of any furniture, merchandise or chattels which Grand Rapids has in its possession as collateral security for the repayment of such loan on the following terms, and conditions, however:
'(A) That Grand Rapids is in no event to sell, transfer or dispose of any furniture, chattels or merchandise for a sum which shall be less than the value placed thereon by the parties in manner set forth in paragraph #4.
'(B) In the event that Grand Rapids shall sell any of the pledged furniture, chattels, or merchandise held by it as collateral security for repayment of loan made by it, then and in that event the sum or sums realized from such sale or sales shall be credited to the account of Zisblatt subject, however, to the following deductions, to wit: (35%) thirty-five percent of the sale price of such merchandise, furniture or chattels, which thirty-five (35%) per cent shall be allowed to Grand Rapids in compensation for overhead, selling expenses and all other charges in connection with the sale or sales of such furniture; but in no event shall such sum be less than value as fixed by terms of paragraph 4.
'9. Zisblatt agrees that all sales to be made of furniture delivered by it to Grand Rapids as collateral security shall be made in the name of Grand Rapids and that the purchase price of such sales shall be payable only to Grand Rapids.
'11. Zisblatt agrees to deliver to Grand Rapids furniture, merchandise and chattels as collateral security for any loans made or to be made, free and clear of all liens and encumbrances; Zisblatt also further agrees to pay for all delivery charges for such furniture, merchandise and chattels.'
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