Bankruptcy Forms Keuka Capital Inc Charles D Tolbert, Esq 4549044

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in the united states bankruptcy courts have the equitable power to subordinate claims or place superior claims behind inferior claims based on fairness in the 1958 case costello versus fazio the ninth circuit considered whether a court could subordinate a corporate insider's claims against a bankrupt corporation under the doctrine of equitable subordination in 1948 j.a fazio lawrence ambrose and bt leonard organized the partnership leonard plumbing and heating supply company initially fazio contributed about forty three thousand dollars in capital ambrose contributed about six thousand five hundred dollars and leonard contributed two thousand dollars in the fall of 1952 the partners decided to incorporate in contemplation of incorporation fazio and ambrose each withdrew all but two thousand dollars of their own capital contributions as a consequence of the withdrawals the company was left with only six thousand dollars in total capitalization in addition the partnership issued promisso