In Re Charter Co.

ORDER SUSTAINING IN PART DEBTORS’ OBJECTION TO ALLOWANCE OF CLAIM OF EDWARD M. CAREY

GEORGE L. PROCTOR, Bankruptcy Judge.

This matter is before the Court upon debtor’s objection to allowance of claim of Edward M. Carey.

I. Facts

Mr. Carey became a shareholder when he sold Carey Energy Corporation to debtor in 1979. In return, he received $4,000,000 in cash and 160,000 shares of Series I Convertible Preferred Stock. Each share of Series I Convertible Preferred Stock was convertible into 15.0156 shares of common stock. By separate agreement, Mr. Carey was permitted to hold and vote no more than…