BANKRUPTCY - DISPOSITION OF SURPLUS ASSETS

The Virginia Oil & Refining Co., a Delaware corporation with all of its business in Texas, went into bankruptcy in 1923. In 1931 hitherto worthless property became valuable and it appeared that there would be a large surplus after all of the creditors were paid. Various receivers in both the state and federal courts of Delaware and Texas, representing groups claiming to be stockholders of the company (which had forfeited its charter) and others claiming to represent the company, sought control of the assets. The bankruptcy court appointed a receiver, to whom the trustee was to turn over the surplus, and a special master to take evidence and discover who was rightfully entitled to the proceeds. Held, such action was proper. The bankruptcy court had exclusive jurisdiction to determine as it saw fit the proper recipients of the surplus. Berl v. Crutcher, (C. C. A. 5th, 1932) 60 F. (2d) 440