Diller v. Irving Trust Co.

Diller, the sole shareholder of the bankrupt, sold all the shares to one Weiner, who gave her a chattel mortgage on all its assets to secure his payments of the purchase price, which was much greater than their value. The trustee attacks the transaction as beyond the corporate powers and as a fraudulent conveyance. It is not necessary for us to say anything upon the first point, because the mortgage was clearly within section 274 of the Debtor and Creditor Law of New York (Con-sol. Laws N. Y. e. 12). The property remaining in the bankrupt’s hands was “an unreasonably small capital”; indeed…