Bernard D. Flaxman v. George Gardner, Trustee in Bankruptcy for Pride Furniture Manufacturing, Ltd.

In this bankruptcy proceeding the referee disapproved the accounting of Bernard D. Flaxman, pre-bankruptcy assignee for the benefit of the bankrupt’s creditors, and surcharged the assignee the sum of $3,850.65 for sums paid out of the assignor’s estate prior to bankruptcy. In so doing, the referee disallowed all but $500.00 of the $1,465.00 fee for an auditor’s report, all but $150.00 of the $350.00 fee for an accountant’s report, all but $1,366.64 of the $2,733.28 fee for the services of an auctioneer, and all but $780.32 of the $2,465.52 the assignee paid to himself for his own fee and expenses. The district court affirmed the order of the referee and Flaxman then took this appeal. We have jurisdiction under sections 24 and 25 of the Bankruptcy Act, 52 Stat. 854 , 855 (1938), as amended, 11 U.S.C. §§ 47 , 48 (1964).

We will first consider the disbursement of $1,465.00 for an auditor’s report, all but $500.00 of which was disallowed, the assignee being surcharged for the balance.

The bankrupt is Pride Furniture Manufacturing, Ltd. (Pride). On March 22, 1961, a substantial number of the creditors of Pride met to consider their mutual problems as such creditors. They decided to…