Union Bank v. Allen Blum and Sam Bailey

Appellant prosecutes this appeal from an order of the district court in a bankruptcy proceeding denying a petition to review and affirming the judgment of the referee in bankruptcy granting discharges in bankruptcy to appellees Allen Blum and Sam Bailey. We AFFIRM.

FACTUAL BACKGROUND

Prior to November 26, 1966, appellees were engaged in business with appellee Blum’s father in a corporation, known as Blum-Bailey-Blum, Inc., and were also partners in another concern. An involuntary petition in bankruptcy was filed against Blum-Bailey-Blum, Inc. and appellees, Blum and Bailey, on November 25, 1966. It was not until June 16, 1967, that an order was entered adjudicating appellees bankrupt. Appellant bank was one of appellees’ principal creditors.

Prior to bankruptcy, Blum owned a residence with his father which they sold in October, 1966. Blum received $2,200.00 for his share of the sales price, which he used to pay living expenses and personal debts. Bailey owned a beach home which he sold in September, 1966. His $5,000.00 equity was used by him to pay personal debts and expenses.

The procedure in the bankruptcy court, and to a certain extent in the district court, is somewhat…