BANKRUPTCY--SIX MONTHS RULE--APPLICATION OF THE RULE TO PRIVATE CORPORATIONS

The debtor, being reorganized under chapter 10 of the Bankruptcy Act, was a hotel corporation which owned and operated a hotel in Albany. The reorganization plan which was approved below is being challenged for the reason, among others, that the plan gives preference to certain unsecured creditors. These creditors had furnished supplies to the hotel for a short time before the receiver was appointed in the foreclosure suit which precipitated the bankruptcy proceeding. The trustee allowed the priority on the ground that the supplies were necessary to keep the hotel a going concern and that the six months rule, applicable to railroads and other public service companies, applied.

Held, in so far as the supplies were furnished within six months of the receivership and so far as they were necessary to keep the hotel open, they were proper preferred claims. Dudley v. Mealey, (C.C.A. 2d, 1945) 147 F. (2d) 268.