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HOLD RECEIVER MAY BORROW ON ASSETS OF INSOLVENT BANK Supreme Court Decision Frees Baird's Hand in Getting R. F. C. Money The North Dakota supreme court, in a decision Tuesday, held that a district court may authorize the receiver of an insolvent bank, in process of liquidation, to borrow money from the R. F. C. to make payments to depositors and other creditors, and to pledge assets to secure such a loan when it appears such action is for the best interests of the trust estate and persons inerested. The action was brought against the Forbes State Bank of Forbes by L. R. Baird, state receiver, acting as receiver of the Forbes bank. The bank appealed to the. supreme court for a review, and the order of John C. Lowe, Minot, given in Burleigh county district court, was affirmed. Authority Challenged The district court held the receiver of the bank is authorized to borrow from the R. F. C. to pay dividends to the creditors of the bank. Action was brought resisting the application of the receiver for *authorization to borrow money on the ground the receiver was without authority and that the court was without authority to grant him permission to borrow. In its decision, the supreme court held "the plan adopted by the federal government authorizing the Reconstruction Corporation to make loans to banks in process of liquidation was intended to meet just such a contingency as that presented here." It is inconceivable that any creditor will be harmed," the court said. "The money is borrowed at a low rate of interest and is at once distributed to the creditors. The liabilities are not increased at all, as the sum borrowed goes immediately into reduction of the liabilities. The assets pledged as security for the loan do not go into the hands of a private lender, actuated by the profit motive, but to a governmental agency operating for the purpose of aiding in converting the assets so pledged into money in such manner as shall realize the greatest possible amount for the creditors of the bank."