HEARINGS BEFORE SUBCOMMITTEE ON BANKRUPTCY AND REORGANIZATION U.S. Congress' OF THE Sous COMMITTEE ON THE JUDICIARY HOUSE OF REPRESENTATIVES EIGHTIETH CONGRESS SECOND SESSION ON H. R. 2412 A BILL TO AMEND SECTION 60 OF AN ACT ENTITLED "AN A BILL TO AMEND AN ACT ENTITLED "AN ACT TO ESTAB- COMMITTEE ON THE JUDICIARY EARL C. MICHENER, Michigan, Chairman CHAUNCEY W. REED, Illinois JOHN W. GWYNNE, Iowa LOUIS E. GRAHAM, Pennsylvania JOHN JENNINGS, JR., Tennessee E. WALLACE CHADWICK, Pennsylvania EMANUEL CELLER, New York WILLIAM T. BYRNE, New York JOSEPH R. BRYSON, South Carolina FADJO CRAVENS, Arkansas THOMAS J. LANE, Massachusetts MARTIN GORSKI, Illinois MICHAEL A. FEIGHAN, Ohio FRANK L. CHELF, Kentucky ED GOSSETT, Texas C. MURRAY BERNHARDT, Chief Clerk SUBCOMMITTEE ON BANKRUPTCY AND REORGANIZATION JOHN W. GWYNNE, Iowa SAM HOBBS, Alabama ESTES KEFAUVER, Tennessee J75 1947 .Cai Соруд Text of H. R. 2412. Text of H. R. 5834 Statement of— CONTENTS Milton Kupfer, Esq., New York City, on behalf of the American Bar Resolutions and endorsements submitted by Mr. Kupfer......... William B. Cudlip, Esq., Detroit, secretary, Section of Corporation, John W. Kearns, Counsel, the First National Bank, Chicago, and J. Francis Ireton, Esq., Baltimore, general counsel, Commercial Credit Jacob I. Weinstein, Esq., Philadelphia, chairman, bankruptcy com- Thomas W. Rogers, executive vice president, the American Finance Frank A. Dudley, Portland, Oreg., representing National Association Clorence O. Holten, Esq., Minneapolis, representing Minnesota Letter to Mr. Holten from Grant W. Anderson, vice president, Page 12 6 14 47, 143 61, 144 68 71 77 79 Mrs. A. S. Musgrave, attorney at law, member of bankruptcy com- 81 T. E. Sime, assistant vice president, Bankers Trust Co., New York 83 Walter D. Malcolm, Esq., Boston, on behalf of Massachusetts Bankers W. Randolph Montgomery, Esq., New York City, representing Walter D. Yankauer, Esq., executive vice president, Mill Factors 97, 143 103 83 Alfred Heuston, Esq., chairman, Committee on Bankruptcy and 109 Irvin L. Livingston, Esq., on behalf of Midwest Conference of 116 Homer Kripke, Esq., assistant general counsel, Commercial Investment Trust, Inc., New York City.. 121 John Hanna, Esq., professor of law, Columbia University. 125 127 147 Preferences in bankruptcy, by Professor Hanna, reprinted from Statement submitted by Benjamin Wham, Esq., Chicago, chairman, Section Letter from Delos J. Needham, Esq., Washington, D. C., general counsel, Letter from R. S. Douglas, counsel, the Cleveland Trust Co., Cleveland, Text of H. R. 5693, section 13 of which is mentioned in hearing.. FRIDAY, MAY 7, 1948 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON BANKRUPTCY AND REORGANIZATIONS OF THE COMMITTEE ON THE JUDICIARY, Washington, D. C. The subcommittee met, pursuant to notice, at 10 a. m., in room 345, Old House Office Building, Congressman Chauncey W. Reed (chairman of the subcommittee) presiding. Present: Congressmen Reed (presiding), Devitt, Hobbs, and McCulloch. Mr. REED. The subcommittee will be in order. The hearings for today are for consideration of H. R. 2412 and H. R. 5834 and the bills will be incorporated into the printed hearings. (H. R. 2412 and H. R. 5834 read as follows:) [H. R. 2412, 80th Cong., 1st sess.] A BILL To amend section 60 of an Act entitled "An Act to establish a uniform system of bankruptcy throughout the United States," approved July 1, 1898, as amended Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 60 of an act entitled "An Act to establish a uniform system of bankruptcy throughout the United States," as amended by the Act of June 22, 1948 (52 Stat. 840, 869), is hereby amended by striking out all of subdivision a of said section and substituting in lieu thereof the following: "a. (1) A preference is a transfer, as defined in this Act, of any of the property of a debtor to or for the benefit of a creditor for or on account of an antecedent debt, made or suffered by such debtor while insolvent and within four months before the filing by or against him of the original petition initiating a proceeding under this Act, the effect of which transfer will be to enable such creditor to obtain a greater percentage of his debt than some other creditor of the same class: Provided, however, That this section shall have no application to proceedings under chapter IX of this Act. "(2) For the purposes of subdivisions a and b of this section, and subject to the provisions of paragraph (3), a transfer shall be deemed to have been made or suffered at the time when it became so far perfected that no creditor obtaining under applicable law by legal or equitable proceedings on a simple contract a lien on such property without a special priority (whether or not such a creditor exists), could acquire, after such perfection, any rights in the property so transferred superior to the rights of the transferee therein, and if such transfer is not so perfected prior to the filing of the original petition initiating a proceeding under this Act, it shall be deemed to have been made immediately before the filing of such original petition: Provided, however, That where real property is transferred for or on account of an antecedent debt, the transfer shall be deemed to have been made at the time when it became so far perfected that no bona fide purchaser from the debtor could acquire, after such perfection, any rights in the property so transferred superior to the rights of the transferee therein. "(3) A transfer, wholly or in part, for or on account of a new and contemporaneous consideration shall, to the extent of such consideration and interest thereon and the other obligations of the transferor connected therewith, be deemed to be made or suffered at the time of the transfer, unless the applicable law requires 1 |