In Re California Associated Products Co. Wil-Rud Corporation v. Lynch

This is an appeal by Wil-Rud Corporation from an order of the District Court reversing on review an order of the referee approving a compromise of a controversy growing out of a receiver’s sale in bankruptcy. The debtor, California Associated Products Company, a corporation, had petitioned for relief under Chapter XI of the Bankruptcy Act but had failed to formulate a plan of arrangement acceptable to the creditors, and the referee on October 15, 1947 caused the debtor’s assets, including the assets of its subsidiary corporation, Yankee Doodle Root Beer Bottling Company, to be sold at receiver’s sale at public auction. The assets were sold to appellant, the highest bidder, for $161,000.

So far as the record' shows there was no statement in any order of sale and no oral announcement prior to the sale as to the quantum of property to be sold. Appellant’s bid was stated to be on the same basis as that of a competing bidder whose highest offer for the “physical assets” of the debtor was $160,000. The referee’s order confirming the sale dated October 22, 1947 described the property deemed to have been sold by the receiver as “all machinery, fixtures, equipment, all inventory, all…