Friday, November 22, 2013

In the Matter of Drive-In Development Corp. case brief

In the Matter of Drive-In Development Corp. case brief summary
371 F.2d 215 (1966)


CASE SYNOPSIS
Appellant bank sought review of the ruling from the United States District Court of a District in Illinois where appellant filed a claim with the referee, which was disallowed, and the referee's decision was confirmed by the court in an arrangement proceeding under Chapter 11 of the Bankruptcy Act, 11 U.S.C.S §§ 701-799.

CASE FACTS
The case focused on the circumstances that may bind a corporation to a guaranty of the obligations of a related corporation when it was contended that the corporate officer who executed the guaranty had no authority to do so. The facts giving rise to the question underlie a claim filed by appellant in an arrangement proceeding under chapter XI of the Bankruptcy Act, 11 U.S.C.S §§ 701-799.

DISCUSSION
On appeal, the court ruled that a creditor in a chapter XI proceeding had the right to object to the allowance of another creditor's claim.

CONCLUSION
The court reversed the lower court in part and affirmed the lower court in part stating that a creditor had the right to object to the allowance of another creditor's claim.


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