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DECISION IN BANK CASE MAY AFFECT CENTRAL TRUST CO.
(Continued from Page One) entire bench, upheld a ruling of Judge J. J. Louisville, directing James R. Dorman, Banking and Securities commissioner, to approve reorganization plans for the reopening of the Farmers Bank & Trust company, Hardinsburg. One by one the appellate court dismissed as "without legal merit" contentions raised by the banking commissioner against validity of the 1932 statute allowing depositors to work out reorganization plans for the institution. During the period of reorganization liquidation of a closed bank is suspended.
Effect In Owensboro Case It was believed here the decision in the Hardinsburg case also would control in the Central Trust company litigation from Owensboro where a bitter legal fight has been waged for more than year between depositors and the banking commissioner and R. L. McFarland, liquidator for the institution. Questions at issue in the Hardinsburg and bank cases are substantially the same. Liquidation of the Central Trust company at Owensboro has been suspended on orders of Judge Marlin L. Blackwell, Dixon, pending a final decision by Judge Blackwell, the case having been submitted several weeks ago. Attorneys interested in the Owensboro case appeared here severa] weeks ago for the argument of the Hardinsburg case. Wilbur K. Miller, Owensboro, and Paul Basham, Hardinsburg, and John P. Haswell, Louisville, appeared on behalf of depositors' groups. Mr. Miller represents depositors interested in reopening the Central Trust company while Mr. Haswell was interested in the Hardinsburg case.
Sees No Discrimination
Judge Richardson pointed out that in the Hardinsburg case the plan could hardly be said to discriminate against minority depositors of that institution since it provided for full payment over period of several months to all creditors. Discussing the point raised by the Banking that the 1932 legislative act interfered with the "due process" of law provision of the Federal Constitution, Judge Richardson said: "It is only arbitrary restraint and impairment of contracts, not immunity from unreasonable regulations to safeguard the public interests, that the Federal Constitution prohibits.' In such a case the seeming rights of a few must "yield to the public welfare," Judge Richardson declared, although he explained later on that the plan proposed took from no one any of his rights, but, on the contrary, provided for full payment of all depositors within a reasonable period. Judge Richardson explained that the reorganization of a closed bank did not interfere with the rights to impose a double liability assessment on the stockholders. Mr. Dorman raised this point as an ob. jection to feasibility of the plan submitted by depositors of the Hardinsburg bank. Purpose to Retrieve Assets "The ultimate purpose of the law in question is to enable deposi- tors of an institution to retrieve the assets of the bank and avoid the 1088 of claims against it by and through liquidation on the part of the Banking commissioner," the opinion stated. Attorneys for the Banking commissioner in the Hardinsburg case were J. R. Eskridge, the firm of Moorman & Beard: David C. Walls Hardinsburg: Sandidge & Sandidge Owensboro; Attorney General Bailey P. Wootton and his assistant. Overton S. Hogan. Counsel for the victorious depositors were P. M. Basham, Hardinsburg; Mr. Haswell and R. Miller Holland, R. H. Slack and the firm of Cary, Miller & Kirk, all of Owensboro.
