listing 10 factors relevant to substantive consolidation
How later courts described this case
- listing 10 factors relevant to substantive consolidation
- analyzing substantive consolidation under the Act
- "Corporate entity may be disregarded where not to do so will defeat public convenience, justify wrong or protect fraud.”
- seminal case stating rule and applying Colorado law
Written by the judges who cited it.
The opinion
On Petition for Rehearing.
PER CURIAM.
Counsel for appellants have filed a petition for rehearing in which they assert that the opinion of the court leaves Erland F. Fish without remedy for the funds advanced by him for the bankrupts to acquire the tax and judgment liens. We did not so intend. To secure reimbursement for the funds so advanced, Fish is entitled to benefit of the judgment and tax liens. The statutory time for filing general claims having expired and Fish having withdrawn his claim, he is not entitled to an allowance for any excess of such advances not satisfied by his securities. But a secured creditor does not lose his lien by failure to file a claim. Remington on Bankruptcy, vol. 2, § 910; Ward v. First Nat. Bank of Ironton, Ohio, 6 Cir., 202 F. 609, 612 ; Courtney v. Fidelity Trust Co., 6 Cir. 219 F. 57, 63 ; In re Cherokee Public Service Co., 8 Cir., 94 F.2d 536, 538 . The trustee took the bankrupt estate subject to Fish’s lien.
Hence, Fish is still entitled to the benefit of his securities and may enforce them in a proper proceeding. He may, if he so elect, file a petition against the trustee in the bankruptcy court seeking an enforcement of his securities and in that event, the referee should order sale of the tax and judgment liens to satisfy Fish’s advances unless the trustee make reimbursement to Fish therefor.
The referee reserved any rights that the Blue River Company may have to file claim for reclamation. It was not the intention of this court to pass upon or foreclose any right that the Blue River Company may have by way of reclamation.
It is so ordered. In other respects, the petition for rehearing is denied.