In re Bake-Rite Consolidated

Briefly, the record on review discloses the following situation: That prior to the formation of the bankrupt corporation there existed certain corporations engaged in the bakery business, and other corporations engaged in the manufacture and furnishing of bakery equipment; that the bankrupt corporation was formed for the purpose of consolidating, at least to a certain extent, these interests, and that under certain agreements shares of the capital stock of the Bake-Rite and other corporations were to be transferred to the corporation bankrupt in exchange for the shares of the latter’s stock; and that 103,000 shares of the capital stock of the Bake-Rite Bakers, a California corporation, were on deposit in escrow with the American National Bank of San Francisco, for which shares there had been or were to be issued in exchange certain shares of stock of the Bake-Rite Consolidated.

This bankruptcy proceeding was commenced January 19, 1924. Prior thereto an action for rescission of contract had been instituted at Los Angeles by S. A. Kitchener, H. S. Laughlin, E. E. Lindsey, and P. J. Shortt, as trustees of Bake-Rite Oven Manufacturing Company of Los Angeles, a common-law trust; said…