CORPORATIONS-LIQUIDATION-JURISDICTION OF COURT

Authors

Abstract

A recent New Jersey case, Naspo v. Summits Sweet Shoppe, Inc., suggests interesting questions of the jurisdiction of equity over insolvent corporations. In that case, a bill was brought under section 69 of the New Jersey code, by a simple contract creditor with a small claim of $75 praying for the appointment of a receiver and the distribution of the assets. After the court had heard the parties on a motion for the appointment of a receiver, new counsel for the defendant corporation came in at a later hearing, offered to pay plaintiff's claim and asked for a dismissal of the suit. The court found from the affidavits submitted that the corporation was actually insolvent. It denied the application for dismissal, saying, "where a creditor comes in under this act, it is not his particular grievance the court is to redress; the very object of the act is to protect the public at large from imposition and to promote and secure the general interest of creditors and stockholders." The complaint being in the nature of a class bill, when insolvency was proved to the satisfaction of the court, its duty was to appoint a receiver; and this would be so, even though the complainant, on satisfaction of his claim, should ask for dismissal.

Recommended Citation

CORPORATIONS-LIQUIDATION-JURISDICTION OF COURT, 29 Mich. L. Rev. 906 (1931).
Available at: https://repository.law.umich.edu/mlr/vol29/iss7/6