Alonzo W. Dering v. Everette H. Williams, Trustee in Bankruptcy of Eldon P. Dering, Bankrupt

Appellant objects to a district court determination voiding under § 67(d)(2) (a) of the Bankruptcy Act, 11 U.S.C. 107(d)(2)(a), certain transactions entered into between himself and bankrupt. This section prohibits transfers by debtors within one year prior to filing a bankruptcy petition when the transfer is not made for adequate consideration and the debtor is insolvent.

Appellant, Alonzo W. Dering, and bankrupt, Eldon P. Dering, are brothers. In 1951 they jointly formed a corporation, Dering Industries, Inc. The corporation engaged in the business of manufacturing and distributing aluminum gates, and had a franchise to distribute certain brands of gates in Oregon. The brothers, each with 100 shares, were the only stockholders, except for one odd share issued to a director. At the time of incorporation, or thereabouts, Eldon (the bankrupt) executed an agreement giving appellant (Alonzo) an option to purchase his shares, should he become insolvent or bankrupt.

We jump now to 1961. At this time Dering Industries was a moderately profitable enterprise under the management of appellant. Eldon helped with the business from time to time, but was mainly involved with his own rose…