Robinson v. Wangemann

Arthur Wangemann sold 500 shares of stock back to his own company, W-R Co., in exchange for a promissory note, at a time when the company was solvent and could have paid him in cash without becoming insolvent -- but it never paid on the note's due date, instead issuing renewal notes over time as the balance shrank. The company later renamed itself and entered bankruptcy while several notes to Wangemann, since deceased, remained outstanding, and his estate's executrix (plaintiff) sought to share equally in the bankruptcy distribution alongside the company's other, non-stockholder creditors. The bankruptcy referee allowed the claim on equal footing, reasoning the original transaction was made in good faith and would have been fine had it simply been paid on time.