Felner v. Mangel Stores Corp.

OPINION OF THE COURT

Lane, J.

Richard Felner and Richard Echikson were the principal officers of Fabric Tree, Inc., a retail clothing chain. Fabric Tree had suffered reverses, and a petition for arrangement of its debts was filed in August, 1975. Mangel Stores Corporation had agreed to participate in a plan to put Fabric Tree’s business in order, which included a $600,000 loan to Fabric Tree. Actually, there were three agreements entered into by the parties:

First, a purchase and sale agreement dated May 4, 1976, between Mangel and the principals of Fabric Tree, the bankrupt. Mangel agreed to…