Opinion
Decided July 28th, 1933.
1. Distribution of the estate in possession of the receiver, which is insufficient to pay expenses of receivership and allowed claims in full, are payable in the following order of priority and preference: (1) expenses of administration of receivership; (2) claims of employes for wages due for work performed and services rendered within two months next preceding filing of bill of complaint herein; (3) franchise taxes; (4) municipal taxes; (5) claim of landlord against corporation for not exceeding one year's rent; (6) claims of other preferred creditors; (7) claims of general creditors.
2. Expenses of receivership administration comprehend allowances to receiver and his counsel, master's fees, appraisers' fees, auditors' fees, rent for use and occupation of store premises, claims for merchandise, electricity and gas, and wage claims of persons employed by receiver, all of which incurred by receiver in conducting the business of the corporation under authority of court order.
On bill, c.
Messrs. Wright, Vander Burgh McCarthy, for the complainant and for the receiver.
Messrs. Dalrymple Campbell, for Public Service Electric and Gas Company, a creditor.
Mr. Arthur E. Dienst, for Eric Schultz and others, wage claimants.
Mr. John M. Enright (of McDermott, Enright Carpenter), for Journal Square Bank Building Company, landlord. Mr. I. Harold Meyerson (appearing in behalf of Louis Ogust), for Albert Pick-Barth Company, conditional-sale creditor.
Mr. Alexander Raskin (of Raskin Hornstein), for Peckman Show Case and Fixture Company, conditional-sale creditor.
Mr. Hamilton Cross, for Liquid Carbonic Company and Dry Kold Refrigerating Company, conditional-sale creditors.
Mr. Samuel M. Coombs, Jr., for General Motor Acceptance Corporation, conditional-sale creditor.
The matter sub judice is the distribution of the estate of the defendant-insolvent corporation in possession of the receiver herein and a determination of priority and preference of claimants.
The receivership estate is insufficient to pay expenses of the administration of the receivership and all allowed claims in full; therefore, the expenses of the administration of the receivership must first be paid, next in order will be claims of employes of the defendant for wages due to them for work performed and services rendered within two months next preceding the filing of the bill of complaint herein, then, franchise taxes, municipal taxes, claim of landlord against the corporation for not exceeding one year's rent, then, claims of other preferred creditors, and lastly, claims of general creditors. Expenses of the administration of the reveivership comprehend allowances to the receiver and his counsel, master's fees, appraisers' fees, auditors' fees, rent for use and occupation of the store premises by the receiver, claims for merchandise, electricity and gas, and wage claims of persons employed by the receiver, in the conduct by him of the business of the defendant under authority of the court. Counsel for various claimants urged that there should be a pro-rating of the expenses of the receivership and the claims of the various claimants. Such claim is untenable in the matter sub judice. The well established rule is to pay first the general expenses of the receivership and then the allowed claims in the order of their priority. Albert Kernahan, Inc., v. Franklin Arms, Inc., 107 N.J. Eq. 468; Walser v. Northern Valley Building Corp., 109 N.J. Eq. 126; Spark v. LaReine Hotel Corp., 112 N.J. Eq. 398; sections 85 and 86 of the General Corporation act; 2 Comp. Stat. p. 1652.
I will advise an order accordingly.