In Re Bruce Farley Corp.

ORDER

Appellant Edward L. Kane, trustee of Bruce Farley Corporation, et al., (BFC) bankrupts, appeals the order of Bankruptcy Judge Katz dated April 22,1981 which obligated the trustee to deliver possession of the “Se-Vende Notes” to appellees together with all sums collected by the trustee under said notes. The trustee was also ordered to pay the costs of the suit.

In the matter below, the respondents sought to compel the trustee in bankruptcy to deliver two instruments in the possession of the estate. Under two separate written agreements, the Bruce Farley Corporation pledged the two notes in question to respondents to secure payment on two loans made by respondents to the BFC. The notes had originally been issued by the Se-Vende Corp. in favor of BFC and were secured by two deeds of trust executed by Se-Vende Corp. as trustor with BFC as beneficiary. Thus, the notes have been known throughout this litigation as the “Se-Vende Notes.” The designated trustee under both notes was Seacoast Escrow Corporation which is a wholly owned subsidiary of BFC.

When the two notes were assigned by BFC to the respondents, Seacoast was designated to remain as trustee and it also served as…