Petition: For Ancillary Proceedings And Arrest Under Sec. 10 Of the Bankruptcy Act (December 16, 1952)

IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF PENNSYLVANIA

In the Matter of THE HUBBARD DIANETIC FOUNDATION, INC.

In Bankruptcy
Ancillary Proceedings
Bankrupt No. 23747

Filed Dec 1952

PETITION FOR ANCILLARY PROCEEDINGS
AND ARREST UNDER SEC. 10 OF THE
BANKRUPTCY ACT

TO THE HONORABLE THE JUDGES OF THE SAID COURT:

The petition of FRANK E. McMULLAN, by his attorneys BERTRAM K. WOLFE and BENJAMIN FERTIK, respectfully represents:

1. On or about February 21, 1952 the above named bankrupt filed its voluntary petition in bankruptcy in the United States District Court for the District of Kansas, Cause No. 379 B-2, whereupon an adjudication was duly entered and the cause referred to a Referee in Bankruptcy.

2. Your petitioner was thereafter appointed Trustee in Bankruptcy, duly qualified and is so acting.

3. From an examination of the parties and witnesses in said matter it appears that one L. Ron Hubbard was Chairman of the Board of Directors of the Bankrupt Corporation from May, 1951 to February 12, 1952, that during said period of time the said Hubbard completely dominated the affairs of the corporation and extracted from the funds of said corporation cash in the sum of $20,359.99. It further appeared that of’ this sum said Hubbard was entitled to withdraw $5,473.00 but that the balance of said sum, to wit, $9,286.99 was withdrawn wrongfully and fraudulently by him and should be returned to the Trustee.

4. It further appeared that the said Hubbard wrongfully removed from the possession of the bankrupt certain tape recordings, two sound scribers, one filing cabinet, two desks and two chairs which should also be returned to the Trustee.

5. Petitioner further avers that by appropriate proceedings before the Referee in Bankruptcy in case and after a full hearing thereon the Referee entered an order, dated October 22, 1952, directing said Hubbard to forthwith turn over and deliver to the Trustee said sum of $9,286.99 in cash and said physical personal property above described.

6. Petitioner further avers that upon review of side, order of the Referee the same was affirmed by the United States District Court of Kansas on December 4, 1952.

7. An exemplification of the record of said orders presently on file in the United States District Court of Kansas, duly certified as provided by Act of Congress is attached hereto and made part hereof.

8. Petitioner further avers that said Hubbard has failed and refused to abide by the order of the United States District Court of Kansas and has fled its jurisdiction.

9. Your petitioner is advised and believes and therefore avers that said Hubbard is presently located in the City of Philadelphia, Pennsylvania, within the jurisdiction of your Honorable Court.

10. Your petitioner is advised, believes and therefore avers that the record of said Hubbard indicates that he is a person who has no permanent home or residence, travels from one place to another promoting “dianetic” treatment which appears to be a method of practicing psychiatry without  having the required medical training, that he is presently teaching such a course in Philadelphia, which is scheduled to continue for only the first three weeks of this month and that there is every reason to believe that he will leave the  jurisdiction of this Court at the end of that time.

11. Your petitioner is further advised, believes and therefore avers that said Hubbard has liquid assets with him in Philadelphia, a 1951 Chrysler Convertible Automobile and perhaps a temporary bank account.

12. Petitioner further avers that an examination of said Hubbard is immediately necessary in order to enable your petitioner to determine whether he has presently in his possession or under his control belonging to the bankrupt estate and if not what disposition has been made by him of the aforementioned assets.

13. Your petitioner avers that Ancillary Proceedings in your Honorable Court are necessary in aid of the Court of primary jurisdiction in order that the orders and decrees of the said Court may be enforced and the assets of this bankruptcy estate be recovered and preserved for the benefit of creditors.

WHEREFORE your petitioner prays that your Honorable Court take ancillary jurisdiction in this matter, appoint an  Ancillary Receiver to take charge of the assets and property of said bankrupt estate found within the territorial limits of this Court and issue to the United States Marshall for the Eastern District of Pennsylvania a warrant directing him to bring the above named L. Ron Hubbard forthwith before the Court for examination and such other and further relief as may be just.

FRANK E. McMULLAN
By /S/BERTRAM K. WOLFE
Attorney

COMMONWEALTH OF’ PENNSYLVANIA
COUNTY OF PHILADELPHIA

BERTRAM K. WOLFE being duly sworn according to law, deposes and says that he is Counsel of Record for the petitioner herein and duly authorized by him to present the foregoing petition; that the petitioner himself is unable to execute the petition due to the fact that he is in Wichita, Kansas and there is an immediate necessity to file said petition forthwith and that the facts set forth in the foregoing petition are true and correct to the best of his knowledge, information and belief.

/S/BERTRAM K. WOLFE

[Notarized]

Notes