Burr & Knapp (Bridgeport, CT)

Article Text

BURR & KNAPP'S CREDITORS SEEK BANKRUPTCY ACT Petition Filed Today With U. S. District Court By Attorney Lavery Six creditors of Burr & Knapp, the Main street bankers and real estate dealers whose business affairs are now in the hands of a temporary receiver, have asked the U. S. District Court to compel the firm to file an involuntary petition in bankruptcy. Attorney Hugh J. Lavery of the law firm of Lavery & Finklestone has filed the petition with the U. S. District Court at Hartford. The creditors who bring the petition are GreenStanley Greenwood, Levy & Co., Mendelssohn Bros. and Morris Mendelssonn. Attorney Lavery would not say today anything regarding the amount of the claims these creditors represent. A petition to make the temporary receiver a permanent one. will probably be argued shortly before some judge of the Superior Court. The creditors mentioned above want the affairs of the company handled through a receiver designated by the U. S. Bankruptcy Court. U. S. Marshal Sidney E. Hawley now has subpeones to serve on those interested but H. M. Knapp of the firm is traveling in the south and personal service cannot be made on him. When the papers reach him from the Hartford court Referee in Bankruptcy John W. Banks will set a date for a hearing the matter of the involuntary bankruptcy Detition.

Article Text

RECEIVER FOUND BUT $5 IN BANK OF BURR & KNAPP Believes Chamberlain Its Atty. Company Will Pay Debts. CREDITORS CONTINUE VOTE RECEIVED TO ERSHIP Real Are Estate Assets. Mines Large and Part of Firm's $5 but That instead drawer of $50 there when was affairs he took of in the as cash receiver of what the Attorney in Burr charge C. & Chamberlain Knapp firm was told at a the meeting creditors afJohn banking yesterday superior court Chamberlain state ternon. business of the of the Attorney explanation the room of the after the to in a which lengthy he found with the creditors conconsent to that under firm, pleaded have the receivership a three the a tinued. He said months receivership chance of and a half stood a better if the accreditors their money than force the firm By return now of pending were to pressed. present consented tion bankruptcy the creditors proposiArnold, unanimous into to vote the receivershippen the bankruptcy tion, but Messrs. who have did brought not vote vote the and Greenman, proceedings was taken on either way. The Harrie Le Brun the Attorney motion of hamberlain the Burr & said Knapp Mr. that bank Burr trouble with years ago between when 500 and began purchased 25 for $40,000, in the town lots of had Debeen building lots He said these had never pew, 600 N. Y. developed and load never any dividends. too much of a as the paid had been carry, especially when They firm to the money Mr. for one not have lots and Burr out and were now real firm Knapp Mr. did had, bought said to go the the lots several borrow the cash. about He $140,000, pressing that him that for if worth estate agents sell were the land continued and as an asset under a would authority to might eivership be he thought cents dollar. the the property creditors receive that 100 transon Speaking the of the events that the bank Cham- was to the day Attorney peto Mr. a payobliged berlain pired up said suspend, that considered Knapp the was same in that for he month. for the bill in honest ment cullar if he deferred had a Attorney receipt Cham an berlain as his pocket. Knapp was paying said that Mr. his bank had been than it took the man, each that day more to money an hour before the busout in, that closed even he up believed He said that that the together his inability close. bank iness combinati could ation go of circumstances on. to get money had with forced "You're the bank right, to he C. was Knight, a peculiar one Knapp of man," said Henry "Do you say but Mr. he wasn't creditors. on Tuesday, Mr. Knapp is honest now. It on worrying honest the was do any rednesday? to worry. an needn't who have that bank "I deposited they I his creditors $300 in closed,' declared was "When Mr. William stood the hour before Shaughnessy to the girl clerks money of the the handing by and one that Knapp didn't they worse highway was banking telling business took another my had money been than and himself but is protect money atrobbery. from tell me. a highway It One as can robiber, I got. but That not Any from deal to me. of such a returned the honesty should be parade here with objection this such tempt a to man who must are meet familiar with the business from Attorney all transaction." Chamberlain estate mortagages said on that which in owned real about $100,000 might be Bridgeport firm of full valuation company had thought said the the Waterhe realized. worth He of Co. stock which in was said worth also vleit $50,000 Hydraulic Mr. Chamberlain in mortface value. was about $113,000 Loan & Trust realCo. on ized. said gages that there in which the full Georgia value could be there Chamberlain in Arkansas offered for Mr. time ago was Attorney also a lead Knapp mine had been and he receiver which a short the hands of a A $10,000 that in consummated. faccorundum thought might be and a the Fails this sale mine in Canada in which marketwere able tory at Niagara the mine is made as part of assets. product of also mentioned Attorney Chamberrepresented the firm's said this investment was propably said: worth $80,000 lain in cash In and conclusion in he this mat$150,000 "I am now. probably than deeper any other together person financially Taking all one in this we will each this matter if believe out of than ter get more room. is continued and every proceedings the we of receivership us the bankruptcy would if now.' are pressed

Article Text

FOR SALE.

As receiver of Burr and Knapp, I will sell at public auction at 10 a. m., Saturday, October 17th, 1914, at the Banking House of Burr and Knapp, 923 Main street, 1,006 shares of the capital stock of the City Title Guaranty, Trust and Safe Deposit Company, also the partitions now enclosing the office of said company.

J. C. CHAMBERLAIN, Receiver.

Article Text

e $25,000 Stock At Burr & Knapp Sale No Market for City Title Guaranty Trust & Safe Deposit Co. Effects de A bid for $300 made by Hervey E. Burr, was the best and the only bid for $25,000 worth of stock of the City Title Guaranty Trust and Deposit Co. which Receiver John C. Chamberlain was able to get today in an effort to settle the affairs of Burr & Knapp, bankers and real estate operators who recently suspended business. About half a dozen prominent business men were assembled in the old offices of the firm when Receiver Chamberlain appeared to start the sale. Among them were Thomas Arnold and John H. Greenwood who have brought proceedings to have Burr & Knapp declared bankrupts. No other bid being forthcoming Mr. Chamberlain took Mr. Burr's bid under consideration and will submit it to Judge Burpee in the Superior court next Thursday when a petition will be heard to have a permenent receiver appointed for the firm. Attorney Chamberlain said today that the City Title Guaranty Trust and Deposit Co. was established about seven years ago by Charles J. Knapp, who is listed as the manager of the company. Attorney Chamberlain said the firm had spent about $60,000 in making a correct transcription of the land records of Bridgeport. He said the shares in the company were held by Mrs. Burr and Mrs. Knapp and there was some question as to whether they were part of the assets of Burr & Knapp, but that both owners of the stock had offered it in an effort to liquidate the debts of the banking firm. Attorney Chamberlain said the company had not earned any money because purchasers of real estate invarlably preferred to have a title searched by some attorney whom they knew rather than by a title searching company. Attorney Chamberlain said the company owed Burr & Knapp, $1,760 for the last year and a half of the company street Whoever in for the rent, offices purchases the in stock Main must assume this debt. Mr. Burr, who bid for the stock, is the treasurer of the company. Attorney Chamberlain is dts president.

Article Text

Deposits Are Returned The telegram , from Congressman Donovan was posted in the offices of the bank today and just inside the railing was piled hundreds of thous= ands of dollars showing the readiness with which the bank was to rheet all who came to withdraw their funde. The Hae of anxious faced women mostly those who do not speak English and who were led to believe their savings were in danger, by malicious stories circulated in their neighborhood, thinned out rapidly and this afternoon the line had entirely vanished. In the mean time many who were quick to withdraw their savings yesterday, returned today and redeposited their money. They were chagrined when they learned that they had lost their interest. They could not understand why this was necessary but were informed that while the officials regretted the action, the state laws compelled it. It is a credit to the good sense of the majority of the depositors that they were unalarmed by the turn matters took and many of the (solid citizens of the town spent time in reassuring those who seemed frightened by the harmful reports which did much to disturb many of that class of depositors who are unaccustomed to the banking laws of the state. The recent failure of Burr & Knapp, a private banking house with a branch In the West End, did much, it is said to cause uneasiness among a certain plass of the depositors. If the uneasy ones could have been persuaded against their rashness they would not today have their life's earnIngs at the mercy of the speculator who is always quick to prey upon those who are unfamiliar with the laws and customs of the state. Now that the foolish run is over It is earnestly to be hoped that the friends of the people who were led to withdraw their savings will do all that Is possible to encourage them to re-

Article Text

Although Attorney John C

Chamberlain is said to have votes representing the majority of creditors of the defunct banking firm of Burr & Knapp, there is a report that a man not hitherto mentioned will be named trustee. Attorney Chamberlain claims to represent claims to the amount of $225,000. This would give him control, but Referee Banks has the power to disqualify any candidate and appoint any person he thinks best fitted for the place, So many claims were received this morn ing that Referee Banks declared the voting for trustees would not start until 3 this afternoon. Three nominations were made this morning, when the hearing started in the presence of a crowd that completely filled the superior court room. Justice Bacon Wakeman of Fairfield, nominated Attorney John C. Chamberlain. He said Mr. Chamberlain, because of his long association with Burr & Knapp and his familiarity with conditions, was best qualified for the position, Attorney L. S. Finklestone proposed the name of Attorney C. S. Canfield. He referred in glowing terms to Attorney Canfield's high standing in the community, his widely known legal ability and his reputation for integrity. He thought the best interests of the creditors would be served by the appointment of Attorney Cangfield. He told abou the manner in which Attorney Chamberlain has acted as receiver, but Referee Banks said the time for those remarks was after the nominations had been closed. Attorney R. C. Mallette nominated the American Bank & Trust Co. of East Bridgeport, for trustees. Then Attorney Finklestone arose again and began his arraignment of Attorney Chamberlain. He said Receiver Chamberlain had been lax in his methods. He had allowed certain books to get out of his possession so the City Title & Guarantee Co. had been able to gain advantages, The speaker opposed Mr. Chamberlain for trustee because he had been so closely connected with Burr & Knapp both socially and in a business way. He even charged that Mr. Chamberlain had given H.M. Knapp money to get away.

Article Text

BURR & KNAPP'S AFFAIRS NOW IN FEDERAL COURT Chamberlain Completes Duties As Receiver and Continues As Trustee COURT ALLOWS HIM $1,200 FOR SERVICES Cash Balance of $1,193 On Hand When Expenses for Two Months Are Paid The report. of Receiver John C. Chamberlain of Burr & Knapp, which has been accepted by the superior court, shows that after conducting the business for two months, he has $1,183 to. turn over to himself as trustee. After this report had been accepted by Judge Burpee he discharged Attorney Chamberlain as receiver. This proceeding formally takes the firm's affairs from the superior court. About a month ago some of the credItors threw the firm into bankruptcy so that from this time the United States' court will have jurisdiction. Receiver Chamberlain reported that during the two months he acted as receiver / the receipts were $75,131.50. The disbursements were $74,748. The latter included all expenses of conducting the business. Receiver Chamherlain presented a bill for $1,200 for his services which the court allowed. This sum also included counsel fees. Mr. Chamberlain remains in charge of the affairs of the involved banking house, by virtue of his appointment as trustee in the proceedings in the bankruptcy court. The effect of the discharge of Receiver Chamberlain is to take the affairs of the estate from the state court into the federal court.

Article Text

to run and also to dispose of an automobile. This will be by private sale. Another petition granted was for the sale of the insurance business. This will be at public auction to be held December 19. 'There was some discussion about the $10,000 bond which Burr & Knapp were required to deposit with the state. It is claimed by some that this bond should be turned over to the estate for the benefit of the depositors. The state treasurer will not turn over this bond unless he gets an order *from the court. It is thought this matter will be adjusted later,however. Referee Banks authorized the engagement of an expert accountant to go over the company's books and see just what the assets are. There was some complaint because certain real estate could not be located and it was thought best to have everything in good order. Another topic of discussion was certain mortgages held by the FirstBridgeport National cbank on which partial payments have been made. These are not the name mortgages mentioned in the $120,000 proceedings. It is said that in some cases a man signed a mortgage for $10,000 but had actually received only $5,000. This mortgage was subsequently assigned to somebody else who could demand the face value of the mortgage, although the borrower had not received the full amount. Referee Banks was asked to sign an order authorizing the release of these mortgages upon payments of the amounts actually advanced. He took the matter under advisement. There was a large crowd at today's hearing, although not so many as at previous hearings. The appraisers will file another inventory later. They are Frank T. Staples, D. Fairchild Wheeler and Adolf Sherman. - The next hearing will be subject to the

Article Text

MOREHOUSE HAS BILL REGULATING PRIVATE BANKS Stratford Representative Wishes to Prevent Failures Like Burr & Knapp (Special to The Farmer) Hartford, Jan. 18 As a direct result of the recent failure of the firm of Burr & Knapp in Bridgeport and to prevent further financial collapses of this sort Representative Ivan Morehouse of Stratford will introduce a bill this week, bringing all private banking institutions under the rigid supervision of the state banking commission. Representative Morehouse's bill in its preliminary draft provides that all private banking houses shall maintain a reserve fund of 15 per cent of the aggregate deposits, four-fifths of this amount to bei in currency and one-fifth of bonds approved by the banking commission. At present no reserve fund is required of private banking institutions, a bond of $10,000 being the only surety to depositors. The bill further provides that should the reserve fund in any private bank fall below 15 per cent of the aggregate for a term of thirty days, no loans or discounts may be made and no dividends declared on capital stock. "All private banks will be required to make exhaustive reports of their financial status five times annually, on demand of the banking commission. Should a bank commissioner deem it necessary, the bill provides, in order to prevent the public from being defrauded, he or the state's attorney, for the county in which the bank is located, may apply to a judge of the superior court for the appointment of receivers. The bill provides that private banks shall bear their share of the expenses of the banking commission. Representative Morehouse says he expects there will be considerable opposition to his measure from private banks. He cites the recent failure of the Burr & Knapp concern in Bridgeport as a good argument in support of his bill. The fact that no reserve fund has been required of private banks leaves for the depositors in the Burr & Knapp bank practically the $10,000 bond as their only surety for deposits.

Article Text

Creditors Threaten Criminal Action In Burr & Knapp-Case (Continued From First Page.) "In other words," inquired Attorney Klein, "if a man deposited $1,000 today, the firm would use it for its own purposes and the man might not be able to get his $1,000 tomorrow?" The witness admitted that was about the true situation. "How long have you been with Burr & Knapp?' asked the lawyer. "Since 1899," she replied. "You've been well schooled," said Attorney Klein. Referee Banks was then asked to consider the case of William Shaughnessy of this city, who claims he was the last person to deposit in Burr & Knapp's before the firm failed September 10 last. He deposited $300 about 10 a. m. and the bank closed a few minutes later. When he returned at 4 in the afternoon and demanded his money he couldn't get it. He testified that a woman clerk pointed to an envelope containing his money but said she couldn't give it to him unless he got an order from the receiver. Shaughnessy claimed two other depositors on that fatal morning returned and got their money. Mrs. Rahm said she couldn't explain it unless it was because Shaughnessy's money, being the last, was placed on top of a pile in the drawer and was used to pay other claims. Receiver Chamberlain said there was just $164 cash in the bank when he took charge at 4 p. m. September 10. Attorney Thomas M. Cullinan, counsel for Shaughnessy, claimed his client is entitled to this sum. Referee Banks said he would reserve decision on all matters that came before him today.

Article Text

COIN IN TILL AS BANK FAILS GOES TO SHAUGHNESSY William Shaughnessy of this city, who deposited $300 with Burr & Knapp within one hour of the time a receiver was appointed for the defunch banking firm,is entitled to $141.39, all that was in the till when the received took charge. This decision was handed down today : by Referee in The refBankruptcy John W. Banks. eree finds Burr & Knapp accepted the deposit from Shaughnessy knowing they were insolvent at the time. The referee says no one else claimed money deposited in the last hour of Burr & Knapp's business career and he finds the $141.39 was part of the Shaughnessy deposit. Trustee John C. Chamberlain is ordered to pay the money to Shaughnessy. The latter was represented by former City Attorney Thomas M. Cullinan. Referee Banks denies the petition of the Hungarian Sick Benefit association to recover $4,033.34 given to Burr & Knapp to forward to Hungary. It was found the bankers did not forward the money but instead deposited it in their own account in a local bank. This account was afterward found to be overdrawn $400. The referee denies the petition because the association's trust fund has not been traced or identifled in any specific fund or property in the hands of the trustee. Referee Banks on the same ground enies petitions of D. B. Bradley and

Article Text

Creditors Who Press Burr & Knapp Get Cash BackFunds of Depositors Helped Pay Household Expenses - Knapp Defends Action. Hearing of Bankrupt Is Reopened Before Commissioner Today - Comley Challenges Bowers' Motive in Investigation-Find Ridiculous Sales on Books. Herbert M. Knapp, head of the former banking firm of Burr & Knapp, was called upon the witness stand before Referee in Bankruptcy John W. Banks today to be examined by Spotswood D. Bowers, counsel for several creditors, as to his acts for the defunct company and many entries that appear on the books. Among the facts disclosed at this morning's session, a continuance of which is on this afternoon are these: Mrs. H. M. Knapp drew $1,800 for her household expenses in addition to her regular division of profits from the business and moneys paid to her by her husband. Knapp, though many times "worried about the finances of the company, believed up to the day of the receivership, that something would come up which would permit the concern to go on." A court award of $187,000 to the Watervliet Hydraulic Co. came too late to prevent catastrophe. That the Fairview Lawn property, recently sold for less than $1,000 was, as previously testified by Hervie Burr, worth between $50,000 and $60,000 and that other securities of the company appraised at ridiculously low estimates have since been sold for large, sums of money. The Burr & Knapp Co. was accustomed to "kite" checks upon the Georgia Loan & Trust Co. through the First-Bridgeport National Bank and that shortly before the failure the practice was called "irregular" and Burr & Knapp were called upon to deposit $125,000 worth of securities with the local bank. The special account with the Georgia Loan & Trust Co. under which these check operations were held, was disclosed to show totals of $392.000 worth of such transactions during May and June, 1914. An effort to disclose whether these check transactions had had the countenance of the directors of the Georgia Loan & Trust Co. or had been done by Knapp personally was abortiye and Knapp declared that he is not now a director of the company and if he were he would not disclose a list of the stockholders to the investigators. Although $130,000 in drafts were returned to Bridgeport in 1914 with checks aggregating $109,500 the investigation showed that no records were to kept of the securities turned over the Bridgeport bank. An attempt to show that a divided not was kept at one of the local banks for the express purpose of covering overdrafts was not clearly accounted for in the investigation today. Efforts to show that Mrs. Mary H. Burr was aware of transactions being made by the Burr & Knapp firm brought forth the assertion from the witness that if any criminal transactions should be uncovered in the investigation he was alone responsible and would accept the blame. It was disclosed, however, that in the summer of 1913 the concern was much worried by financial conditions and that Mrs. Burr saved the day by having a Mrs. Penfield journey to Boston (Continued on Page 2.)

Article Text

HELD IN $110,000 THEFT Bridgeport Banker Misappropriated Funds, Is Charge. Bridgeport, Conn., May 29.-Misappriation of $110,000 of funds of the private banking firm of Burr & Knapp was charged to-day with the arrest of Herbert M. Knapp, partner in the bankrupt firm. Knapp also is charged with complicity with Solomon Lavozsky in appropriating $4,033 belonging to the Hungarian Benefit Society's Confederation. A warrant for Lavozsky's arrest was granted by Judge Curtis. Knapp was made a prisoner later and immediately released on $6,000 bonds. Lavozsky was not arrested, however. It. is expected that he will be served with the warrant to-morrow. The bank failed several weeks ago, with liabilities of $800,000. The receiver asked to be discharged yesterday, but the creditors objected, insisting upon an investigation.