In re Wojciechowski ( 1939 )

JOHNSON, District Judge.

This is a petition to review the report filed by the Conciliation Commissioner on July 13, 1938.

The debtors allege that the commissioner erred in the following recommendations:

“Your conciliation commissioner respectfully recommends that the Debtors’ Amended Proposal be confirmed except as to the claim of the Eastern Light Company, and as to said claim that it be unaffected by the Amended Proposal. Further, that the said debtors be given an opportunity to petition to open the judgment of the Eastern Light Company in the Court of Common Pleas of Luzerne County, provided the debtors pay the costs incurred to date by the said Eastern Light Company.

“Your conciliation commissioner also recommends that the within cause be kept open until such time as the Debtors carry out the Court’s order and their proposal.”

All of the provisions of the debtors’ amended proposal have been accepted by the parties in interest, and approved by the commissioner, except the provision dealing with the claim of the Eastern Light Company. This claim is based on a judgment in the Court of Common Pleas of Luzerne County, amounting to $351.85. The debtors contend that the judgment is not a valid claim, and consequently only offer to pay $50. Before these proceedings were started, a levy was made under this judgment on both the personal and real property of the debtors. The light company is therefore a secured creditor within the meaning of Section 75 (k) of the Bankruptcy Act, 11 U.S.C.A. § 203(k), which provides that no extension or composition shall reduce the amount or impair the lien of any secured creditor below the fair market value of the property securing such lien. Thus, the commissioner properly found that the claim of the light company should not be affected by the debtors’ amended proposal to pay $50, on this claim.

The commissioner has arrived at a fair and equitable solution to the controversy by giving the debtors an opportunity to attach the light company’s judgment in the proper court, and by staying the proceedings under Section 75, of the Bankruptcy Act, so far as this claim is concerned until its exact status in the State court has been determined.

And now, April 3rd, 1939, the report of David T. Davis, Jr., Conciliation Commissioner in the above matter, dated June 30, 1938, and filed in this court July 13, 1938, is approved, the exceptions taken thereto by the debtors are dismissed, and the recommendations contained in the report are adopted as the order of this court.