Southern Molasses Co. v. Boutcher

The plaintiff company, being insolvent, agreed with defendant that, if he would pay all its creditors 25 cents on the dollar, it would turn over to him all its physical assets and good will.

This turning over of assets and good will was accomplished by transferring to him its whole capital stock, after which he paid all the debts of the corporation, except state, municipal, and federal taxes, and an insurance bill. Most of the creditors were willing to receive, and did receive, 25 cents on the dollar; some of them, however, who held secured claims, were paid in full.

Afterwards the company paid…