First National Bank of Hollywood v. American Foam Rubber Corp.

VAN GRAAFEILAND, Circuit Judge:

This is an appeal from a judgment in favor of the executors of one corporate creditor against another corporate creditor whose right to receive payment was made subordinate to that of plaintiffs’ testate. Two questions are presented:

1. Did the subordinated creditor have the right to discharge an unma-tured subordinated indebtedness without the consent of the senior creditor?

2. Was there payment of a matured, subordinated debenture when the subordinated creditor took the note of the debtor’s parent corporation instead of cash?

Litigation between the parties has…