In re Sullivan

LOWELL, District Judge.

On May 24, 1923, Sullivan borrowed about $40,000 from the Manufacturers’ Finance Company on the security of a number of assigned accounts. The arrangement was that Sullivan should collect the accounts and turn the proceeds over to the company. The Manufacturers’ Company became suspicious of Sullivan and investigated his affairs. It found that his business was in a precarious condition, and that many of the accounts, which he had assigned to it were imaginary ones. At, this time, and when, as the referee found, the company had reasonable cause to believe that Sullivan…