In the Matter of Sierra Trading Corporation, Debtor. Buttes Gas & Oil Company v. L. W. Winkler, Jr., Trustee in Bankruptcy, Trustee-Appellee

McWilliams, circuit judge.

This is an appeal from the district coui't’s order and judgment upholding the referee in bankruptcy’s order which in turn disallowed claim No. 221 filed by Buttes Gas & Oil Company and others, hereinafter referred to as the claimant, against Sierra Trading Corporation, the debtor corporation, in a Chapter X Reorganization. This particular claim was based on a letter agreement entered into by the parties on September 3, 1969, and the narrow issue here to be resolved is whether the payment called for by that letter agreement is a “penalty” or “liquidated damages.”

The…