In re Arcadia Print Works, 1 F.2d 463 (D. Mass. 1923). · Go Syfert
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In re Arcadia Print Works, 1 F.2d 463 (D. Mass. 1923). Cases Citing This Book View Copy Cite
4 citation events across 3 distinct courts.
Strongest positive: In Re Crazy Eddie, Inc. (nysb, 1990-08-17)
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discussed Cited as authority (rule) In Re Crazy Eddie, Inc.
Bankr. S.D.N.Y. · 1990 · confidence medium
On appeal, the district court reversed, finding that while it did not wish to encourage this practice, the petitioning creditors “were acting entirely within their legal rights in bringing their petition, [and that compensation of attorneys’ fees was warranted] whatever may have been their motives.” 2 Id. at 464.
In re ARCADIA PRINT WORKS
No. 29094.
District Court, D. Massachusetts.
Mar 15, 1923.
1 F.2d 463
Richard R. Sullivan, of Boston, Mass,, for petitioning creditors., Joseph W. Worthen, of Boston, Mass., for trustee.
Brewster.
Published
BREWSTER, District Judge.

Petitioning creditors in an involuntary petition in bankruptcy filed a petition with the referee for an allowance to cover their expenses in connection with the involuntary petition, and[*464] also for reasonable fees for counsel representing them in the proceeding. The involuntary petition was followed by a voluntary petition, upon which adjudication was subsequently ordered, and the involuntary petition was dismissed. The referee denied the petition so far as it- related to counsel fees, and found as a fact that the involuntary petition was unnecessary, and that he had reason to believe the petitioning creditors and their counsel knew it was unnecessary, and took such action for no other purpose than to participate in the proceedings and to procure the customary allowance as counsel for petitioning creditors.

I agree with the referee that this is a practice that ought not to be encouraged, but upon the- record it would appear that the parties to the involuntary petition were acting entirely within their legal rights in bringing their petition, whatever may have been their motives. Receivers were appointed on the involuntary petition, before the adjudication was ordered upon the voluntary petition. It was impossible to say that the creditors did not derive some benefit from this proceeding. It is well settled that the attorney for the petitioning creditors is entitled to a reasonable fee as a. right. Its allowance or disallowance is not a matter of discretion. I take it this must be so, even though the petition may be ultimately dismissed. In re Curtis (C. C. A. 7th Cir.) 4 Am. Bankr. Rep. 17, 100 Fed. 784, 41 C. C. A. 59; Smith v. Cooper (C. C. A. 5th Cir.) 9 Am. Bankr. Rep. 755, 120 Fed. 230, 56 C. C. A. 578. The fact that the petition was dismissed as a result of an adjudication upon a voluntary petition would only affect the reasonable amount to be allowed, and would not destroy the rights of the creditors to receive out of the estate reasonable compensation for their attorneys.

The order of the referee denying the petition for attorney’s fees is reversed, and the case remanded to the referee for the purpose of fixing a reasonable attorney’s fee.