In re Foley

E. Y. Foley, during and prior to the year 1923, was engaged in the business of purchasing, handling, and shipping fruit in and about the county of Fresno, Cal. In about the month of April, 1923, he found himself unable to meet the demands of his creditors. His total indebtedness at that time was in excess of $1,000,000 and his reported assets less that sum by at least $500,000. A large number of the creditors, all, in fact, so far as appears, except a very small minority, agreed that Foley should continue operations, believing that he would be able, with the assistance of the creditors, to re-estab *569 lish his business on a solvent basis. To that end the E. Y. Foley Corporation was organized, and certain creditors arranged to contribute $200,000 to care for the immediate needs of the business, and particularly to provide a fund to enable grower creditors to have paid to them forthwith 25 per cent, of their claims in money, recognizing these creditors as being tho most needy. Without stating the details of the scheme of organization, it is sufficient to say that all of the common stock was to be issued to Foley, and a large number of shares of preferred stock was to be issued, to…