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In re Trylon Radio Laboratories Inc.

Decided: September 14, 1962.

IN THE MATTER OF THE ASSIGNMENT FOR THE BENEFIT OF CREDITORS OF TRYLON RADIO LABORATORIES, INC., A CORPORATION OF THE STATE OF NEW JERSEY, ASSIGNOR,
v.
A. DAVID EPSTEIN, ASSIGNEE



Wood, A.c., J.c.c.

Wood

This matter is before the court upon first and final accounting by A. David Epstein, Esq., as assignee for the benefit of creditors of Trylon Radio Laboratories Inc., a New Jersey corporation, together with application for the allowance to Mr. Epstein of commissions as assignee in the sum of $7,500 and for the allowance to his attorneys, Messrs. Raff, Sherman & Scheider, for an attorney's fee of $7,500.

The account shows a balance in the hands of the assignee, as of March 28, 1962, the date of the accounting, of $37,393.06. A "supplemental accounting," dated June 28, 1962 and filed on the date of hearing, shows additional disbursements by the assignee in the sum of $554.29, leaving a balance presently in his hands of $36,838.77.

Against said assets the United States of America holds a priority claim of $66,634.67, and one Sadie C. Slatko holds a priority claim in the sum of $85. Mrs. Slatko did not appear at the hearing.

The United States of America has filed exceptions to the applications for allowance of assignee's commissions and attorney's fees upon the following grounds:

1. As to the application for commissions to the assignee, the commissions requested are excessive and not justified by the work performed.

2. As to the application for attorneys' fees:

(a) Although the assignment is dated March 18, 1960 and was recorded in the county clerk's office on March 21, 1960, and a certified copy thereof filed in the surrogate's office on the same day, N.J.S. 2A:19-7, an order of this court authorizing retention of counsel by the assignee was not entered until November 10, 1960, and therefore the attorneys are not entitled to compensation for services rendered prior to that date.

(b) In any event, the requested fee of $7,500 is excessive, the estate having been relatively uncomplicated and little if any need for the services of the attorneys having been shown.

I. The Attorneys' Fees

The question of paramount importance raised by these exceptions is whether the attorneys for the assignee are entitled to any fee for their services and, if so, to what extent.

As noted above, the assignment to Mr. Epstein is dated March 18, 1960. It was recorded and filed on March 21, 1960. Just when Messrs. Raff, Sherman & Scheider were retained by the assignee is not clear, but it appears that such retention was effected about the same time as such recording and filing.

However, no order of this court authorizing such retention of attorneys by the assignee was entered until November 10, 1960.

R.R. 4:68-4 provides:

"No receiver shall employ an attorney, counsel or accountant except upon the order of the court supported by an affidavit of the receiver setting forth the necessity for the employment. The court before authorizing the employment of an attorney, counsel or accountant, shall be satisfied that he is not interested in the suit, or in any of the parties thereto, in such a way as to disqualify him from serving in good faith the receiver as a fiduciary for all of the stockholders and unsecured creditors of the corporation, or the unsecured creditors of the partnership or individual."

The quoted rule is applicable to assignment proceedings both in the Superior Court and in the Probate Division of the County Court. R.R. 4:69; In re General Assignment for Benefit of Creditors of ...


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