Geist v. Prudence Realization Corp.

There are two factual aspects of this case to which, I think, the majority has given insufficient attention:(1) Prudence, the guarantor, itself is bankrupt. Its creditors are all general creditors, i.e., holders of certificates of several different issues (including the Zo-Gale issue) which Prudence had guaranteed, their claims all being based on the obligations of Prudence on those guarantees. Among the assets of the Prudence estate are the Zo-Gale certificates held by Prudence. The majority, by subordinating Prudence’s claim in the Amalgamated proceedings, is thus preferring the claims of…