Simons v. Thompson

DENISON, Circuit Judge.

The bankrupt corporation was organized under the laws of South Dakota, with a capital stock of $100,000, which purported to be issued as fully paid, in exchange for oil leases transferred to the corporation by the original organizers. They returned $40,000 of stock to the corporation treasury, and it was given as a so-called bonus in connection with the sale of corporation notes in order to raise working capital. After some apparent success, the enterprise failed, and bankruptcy followed. The trustee in bankruptcy commenced a proceeding before the referee for the…