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In re Assignment for Benefit of Creditors of Francilli Carriers Inc.

Decided: October 26, 1962.

IN THE MATTER OF THE ASSIGNMENT FOR THE BENEFIT OF CREDITORS OF FRANCILLI CARRIERS, INC., A NEW JERSEY CORPORATION, ASSIGNOR, TO H. KERMIT GREEN, ASSIGNEE


Pashman, J.s.c. (orally).

Pashman

This is an application by the assignee of Francilli Carriers, Inc. for commissions and allowances and a petition by the assignee's and assignor's respective attorneys for compensation. The main area of dispute between the parties, that is the assignee, the attorney for the assignor and the United States Government as the top priority creditor, is over the meaning to be attributed to the phrase, "All sums received by the said assignee," as it is used in N.J.S. 2A:19-43 which deals with the award of commissions and allowances to be made by the court to the assignee.

On December 19, 1961 Francilli Carriers, Inc. assigned its assets to H. Kermit Green who thereafter took possession of the assignor's assets and duly filed a petition to retain counsel. On January 2, 1962 the assignee was authorized to employ Allan L. Tumarkin as his attorney.

Prior to the retention of Mr. Tumarkin, the assignee succeeded in obtaining a very favorable offer from Deb Trucking Corporation for the entire assets belonging to Francilli Carriers, Inc. A modification of the initial offer was subsequently made with court approval and on January 30, 1962, this court ordered that the offer of Deb Trucking be approved

and that the assignee continue the operation of the assignor's business pending final action by the Interstate Commerce Commission on the proposed transfer of Francilli's contract carrier rights to Deb Trucking.

Acting pursuant to the entry of the aforesaid order, the assignee continued the operation of the assignor's business until May 2, 1962. The gross income realized by the assignee during the period of his operation was $76,940.05, and his operating expenses totaled $95,825.47. The net operating loss of $18,885.42 was offset by funds supplied by Deb Trucking under its indemnification agreement with the assignee.

The final accounting filed by the assignee shows total deposits in the amount of $109,166.25 and disbursements of $99,560.43, leaving a balance on hand of $9,605.82. The amounts sought in commissions, allowances and compensation are as follows:

(1) The assignee asks for $3,500 in commissions and $557.56 in disbursements;

(2) The attorney for the assignee seeks $3,500 in fees and $32.06 in disbursements;

(3) The attorney for the assignor seeks $450 for his services.

The United States Government, which holds a priority claim of $13,548.51, disputes the right of the assignee and his counsel to the amount sought and argues that the phrase "All sums received by the said assignee," found in N.J.S. 2A:19-43, refers to the sum or sums received by the assignee at the time the assignor was declared insolvent.

The attorney for the assignor asks the court to discount operating income entirely and consider only the net sums actually coming into the assignee's hands during the administration of the estate. The assignee and his attorney, on the other hand, argue that they are entitled to use the gross operating income as their ...


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