White Chemical Company v. Henry Moradian, Receiver in Bankruptcy of Cal-Zona Farms, a Corporation, and Henry Moradian, Trustee in Bankruptcy

This is an appeal from an order holding that receiver’s certificates of indebtedness issued pursuant to Section 344 of the Bankruptcy Act were entitled to priority over other costs of administration in Chapter XI proceeding.

On July 16, 1964, the debtor, Cal-Zona Farms, filed a petition proposing an arrangement under the provisions of Chapter XI of the Bankruptcy Act, 11 U.S.C. § 701 et seq. On July 22, 1964, appellee Henry Moradian was appointed receiver with authorization to continue the business.

On July 28, 1964, the referee entered an order authorizing the receiver to issue his certificate of indebtedness to appellee Producers Cotton Oil Company of Arizona in the sum of $30,000. An amended order was entered August 21, 1964, and an amended certificate was issued on the same date. There is now due and owing on this certificate the sum of $16,777.85.

Following a meeting of creditors on September 16, 1964, the referee on October 24, 1964, approved an agreement authorizing the receiver to issue a certificate of indebtedness to appellee Southwest Forest Industries, Inc., for $50,000. A certificate in that amount was issued on October 26, 1964, and there is now due and owing…