In the Matter of Christian and Porter Aluminum Company, Bankrupt. Kerry H. Gough, Trustee v. Dewayne F. Titus

Appellants are seeking review of an order of the district court affirming the bank ruptcy judge’s ruling in favor of the trustee and against appellants for $462,039.89. The appeal presents the following issues:

(1) Can a corporate litigant defend or appeal a federal action if it has been suspended for non-payment of its California Franchise Taxes?

(2) Was there jurisdiction in the bankruptcy court to determine the adverse claims of appellants by summary proceedings?

(3) Was appellee entitled to recover from appellants any of the disputed property value thereof?

(4) Was the amount of the judgment awarded against appellants excessive?

FACTS

The bankrupt, Christian & Porter Aluminum Company (herein “Bankrupt”), is a California corporation. All of the issued and outstanding stock of the corporation was owned by Nick "and Menas Christian. Bankrupt had established a line of credit with the United California Bank (herein “UCB”) secured by a perfected security agreement which established a lien on the accounts receivable, inventory and general intangibles of Bankrupt as well as its major piece of equipment, an aluminum extrusion press. UCB had made considerable advances to Bankrupt,…