Debenture
Holders
[66-1 USTC
¶9167]United States of America, Plaintiff v. Furniture Exchange, Inc.,
Fred Dusek, Ladonna Dobrusky and others similarly situated, Defendants
U.
S. District Court, Dist. S. Dak., Western Div., Civil Action No. 762 W.
D., 6/8/65
[1954 Code Sec. 6323]
Lien for taxes: Priority: Debenture holders: Attorney fees.--The
Government's tax lien was inferior to the claims of debenture holders
who had entered into a compromise agreement with the Government and who
had obtained their bonds before the time of the filing of the
Government's lien. However, the Government's lien was superior to the
claims of debenture holders who obtained their bonds after the time of
the filing of the Government's lien. Attorney fees were allowed out of
the compromise settlement fund.
Rob
ert Mahoney, Department of Justice,
Washington
, D. C. 20530, for plaintiff. John M. Beasom, Blaine Simons, Simons,
Beasom and Gibbs, 611 Northwestern Nat'l Bank Bldg., Sioux Falls, S.
Dak., for defendants.
BECK, District
Judge:
The above
entitled action came duly on for hearing to the Court at the Courtroom
in the
Federal
Building
at
Aberdeen
,
South Dakota
, on the 15th day of May, 1965, at the hour of
9:00 o'clock
in the forenoon of that day. Honorable Axel J. Beck, Judge presiding,
upon motion of the plaintiff for summary judgment in said action, except
as to a Compromise Agreement entered into between the United States and
certain debenture holders for the amount of $18,000.00, the United
States appearing by
Rob
ert Mahoney, Special Counsel for the United States, and certain
debenture holders appearing by their attorneys, John M. Beasom and
Blaine Simons, of Sioux Falls, and the defendants Furniture Exchange,
Inc. and Fred Dusek appearing neither in person nor by counsel; and the
Court having considered such motion and the law applicable thereto and
being fully advised in the premises, now makes and enters the following:
Findings
of Fact
I That the
debenture holders whose claims were filed herein and others similarly
situated entered into a Compromise Agreement with the
United States
to settle their claims for $18,000.00, which Compromise Agreement was
approved in the Summary Judgment heretofore filed herein. Such amount of
$18,000.00 is now held by the Clerk of this Court, pursuant to an order
of this Court.
II That the
Department of Internal Revenue of the United States filed a lien for
unpaid income taxes upon all of the assets of the defendant Furniture
Exchange, Inc., on the 9th day of March, 1960, and that such lien was
effective from and after the date, and thereafter constituted notice to
all third party purchasers, creditors, and debenture holders of said
corporation.
III That the
debenture holders listed on the attached Schedule "A" [not
reproduced herein] exchanged their capital stock in the Dusek Investment
Company for bonds issued by the said Furniture Exchange, Inc., against
its assets prior to the time of the filing of the government lien on the
9th day of March, 1960.
IV That the
debenture holders set forth on attached Schedule "B" [not
reproduced herein] did not obtain their bonds prior to the time of the
filing of the said government lien on the 9th day of March, 1960.
V That the
said John M. Beasom and Blaine Simons, attorneys for the defendants
Ladonna Dobrusky and others similarly situated, have worked ably and
diligently over a period of four years in protecting the interests of
the debenture holders and are entitled to a fee based on the same
percentages as they have charged in their retainer and expense contracts
with the clients whom they specifically represent, to-wit: 5% of the
face value of the bonds participating in the compromise recovery as
above set forth, and 10% of the funds actually recovered by each
debenture holder.
From the
foregoing Findings of Fact, the Court makes and enters the following:
Conclusions
of Law
I That the
debenture holders as set out on attached Schedule "A" [not
reproduced herein] are entitled to a proportionate share of the amount
of $18,000.00 received as the result of the said compromise settlement
with the United States less the attorneys' fees of John M. Beasom and
Blaine Simons fixed at 5% of the value of the bonds at the time of the
filing of the tax lien by the United States and 10% of the money
actually recovered for each of the participating debenture holders.
II That the
debenture holders set forth on attached Schedule "B" [not
reproduced herein] not having exchanged their stock in the Dusek
Investment Company for bonds issued by the said Furniture Exchange,
Inc., prior to the time of the filing of the government lien shall be
and are excluded from participation in the distribution of any of the
funds recovered from the United States.
III That
Blaine Simons, of Sioux Falls, South Dakota, one of the attorneys for
the defendant debenture holders, be, and he is hereby, directed to make
distribution of the said sum of $18,000.00 in conformity with the
amounts set forth in Schedule "A" attached hereto [not
reproduced herein], and, upon completion of such distribution, to make a
report thereof to this Court.
IV That the
Clerk of the United States District Court for the District of South
Dakota, as Register, be directed to issue to said Blaine Simons his
check in the amount of $18,000.00, drawn upon such funds as were
received by him as such Register from the receiver of the Furniture
Exchange, Inc., upon liquidation of the assets of said Furniture
Exchange, Inc., herein.
Let Judgment
be entered accordingly.
