In the Matter of Ben Okamoto, Alleged Bankrupt. Hornblower & Weeks-Hemphill, Noyes v. Ben Okamoto, Alleged Bankrupt-Appellee

On November 28, 1969, Hornblower & Weeks-Hemphill, Noyes (hereinafter “Hornblower”) filed a petition that Okamoto be adjudged an involuntary bankrupt. Hornblower attempted to proceed as the sole petitioning creditor, pursuant to section 59(b) of the Bankruptcy Act, 11 U.S.C. § 95 (b). Okamoto’s answer alleged that he was indebted to more than eleven creditors, and the answer was accompanied by a schedule listing twenty-one creditors. The Referee in Bankruptcy conducted a hearing under section 59(d) and found that Okamoto had nineteen unsecured creditors which must be counted. Since a single creditor cannot proceed under section 59(b) unless the total number of claimants is less than twelve, the Referee dismissed Hornblower’s petition. On review, the District Court affirmed the Referee’s Order of dismissal.

Here, Hornblower attacks the finding of the Bankruptcy Court that Okamoto had more than eleven creditors. Hornblower principally asserts that creditors for relatively small current expenses should be excluded in computing the total number of creditors under section 59(b). Section 59(b) provides in part:

If less than three creditors join in the petition, section 59(e)…