Task: songer_weightev

What follows is an opinion from a United States Court of Appeals. You will be asked a question pertaining to issues that may appear in any civil law cases including civil government, civil private, and diversity cases. The issue is: "Did the factual interpretation by the court or its conclusions (e.g., regarding the weight of evidence or the sufficiency of evidence) favor the appellant?" This includes discussions of whether the litigant met the burden of proof. Answer the question based on the directionality of the appeals court decision. If the court discussed the issue in its opinion and answered the related question in the affirmative, answer "Yes". If the issue was discussed and the opinion answered the question negatively, answer "No". If the opinion considered the question but gave a mixed answer, supporting the respondent in part and supporting the appellant in part, answer "Mixed answer". If the opinion does not discuss the issue, or notes that a particular issue was raised by one of the litigants but the court dismissed the issue as frivolous or trivial or not worthy of discussion for some other reason, answer "Issue not discussed". If the opinion considered the question but gave a "mixed" answer, supporting the respondent in part and supporting the appellant in part (or if two issues treated separately by the court both fell within the area covered by one question and the court answered one question affirmatively and one negatively), answer "Mixed answer". If the opinion either did not consider or discuss the issue at all or if the opinion indicates that this issue was not worthy of consideration by the court of appeals even though it was discussed by the lower court or was raised in one of the briefs, answer "Issue not discussed".

EVANS, Circuit Judge.
These eighteen appeals arise out of the reorganization proceedings of the Chicago & North Western Railway Company, instituted pursuant to Section 77 of the Bankruptcy Act, 11 U.S.C.A. § 205. The Interstate Commerce Commission’s plan of reorganization has been accepted, with one exception, by more than two-thirds of the creditors, of each of the groups, who voted on the reorganization plan, and it has been confirmed by the District Court, after full hearing. We have the benefit of the District Court’s findings and opinion, In re Chicago & N. W. Ry. Co., D.C., 35 F.Supp. 230, and an elaborate and informative report by the Examiner of the I. C. C., as well as a complete discussion and ultimate findings by the Commission. The appeals are chiefly from the trial court’s orders of approval and confirmation of the plan of reorganization.
The Debtor operates in nine states, over 8,290.533 miles first main track and 13,047.-127 of all tracks. A subsidiary of the Debtor, the Chicago, St. Paul, Minneapolis & Omaha Railway Company, owns 1,577.171 miles of first main track and 2,438.047 miles of all tracks. It is operated and renders reports separately from Debtor but its lines complement those of Debtor.
The Debtor’s obligations, generally, comprehended seven divisional mortgages, two system mortgages, R. F. C., R. C. C., and bank loans, equipment trust obligations, and other miscellaneous indebtedness.
To give a succinct idea of the basic facts of this reorganization and the Debtor’s financial structure, this chart is appended:
The following is a brief description of the securities involved in this reorganization:
Milwaukee & State Line bonds, 3%% bonds of 1941, $2,500,000, a lien on 51 miles of double track main freight line between Chicago and Milwaukee, original cost of which was $3,870,817, and reproduction value of $3,574,820.
Manitowoc, Green Bay & North Western Ry., first mortgage, 3%% bonds of 1941, amounting to $3,750,000, a first lien on 113.5 miles of railroad in Wisconsin; original cost, $4,673,102, reproduction cost $4,-278,949.
St. Paul Eastern Grand Trunk Railway first mortgage, 4%% bonds of 1947, amounting to $1,120,000, first lien on 56.1 miles of track in Wisconsin, original cost, $1,212,352, reproduction cost, $1,161,111.
Milwaukee, Sparta & North Western first mortgage, 4% bonds of 1947, amounting to $15,000,000, are a first lien on 177.3 miles of track in Wisconsin; original cost of $15,405,431, and cost of reproduction new, $15,348,864.
DesPlaines Valley Railway first mortgage, 4%% bonds of 1947, amounting to $2,500,000, are a first lien on 19.7 miles of double track, and some equipment; the original cost was $2,921,237, and the cost of reproduction new, $2,884,955.
St. Louis, Peoria & North Western Ry. first mortgage, 5% bonds of 1945, amounting to $10,000,000, a first lien on 112 miles of track and equipment; the original cost was $10,787,269, and reproduction cost, $9,-803,745.
Sioux City & Pacific Rd. first mortgage, bonds matured 1936, amounting to $4,000,000, are a first lien on 118.2 miles of road, costing $4,932,716, and reproduction cost of $5,960,031.
The general mortgage bonds (varying from 3% to 5%), amounting to $132,-011,500 outstanding, and $23,896,000 pledged (total of $155,907,500) a first lien on 4,-876.1 miles of road and equipment. The original cost was $326,335,801, and the cost of reproduction, $359,264,801.
The First and Refunding Mortgage (4%-5%, 2037) amounting to $47,822,000 outstanding, and $65,615,000 pledged (total of $113,437,000) a first lien on 2,749.8 miles of road, and some equipment. The original cost was $103,806,572, and the cost of reproduction was $100,935,498.
Equipment obligations of $14,973,000 are outstanding, and an additional $117,000 pledged, and are first liens on equipment costing $63,414,791.
Serial Collateral Notes, 4%, to Public Works Administration, amounting to $1,-360,000, secured by $1,350,000 first mortgage bonds, and $50,000 capital stock of the Escanaba Co.
The 15-yr., 6%% bonds, matured in 1936, amounting to $14,775,000, secured by pledge of $17,730,000 of general mortgage 5% series E bonds of 1987.
The R. F. C. notes, maturing in 1936, amounting to $14,947,200, are secured by $101,813,800 principal amount of various debtor and other securities. Other notes to the R. F. C. which matured in 1935 and 1936 amounted to $27,302,933.
Bank Notes, 5%, matured in 1936, amounting to $4,439,690, were secured by $18,193,000 of principal amount of Debtor’s securities.
Railroad Credit Corporation notes, maturing in 1935 and 1936, amounting to $653,-681, were secured by $7,021,000 principal amount of Debtor’s securities.
Twenty-Year convertible 4%% Series A, bonds of 1949, amounting to $72,335,000, issued in 1929.
The preferred stock of Debtor, amounting to $22,395,000, and the common stock, amounting to $158,440,300.
The financial structure of Debtor is vexatiously involved. Its obligations, including interest, total $615,742,758. (Unpaid interest to January 1, 1939, amounted to $59,156,409 — of which $1,160,916 has since been paid.)- Its cost of reproduction new, less depreciation, plus land values, is $676,793,588. A valuation, based on earnings (including earnings of the Chicago, St. Paul, Minneapolis & Omaha Ry. Co.) capitalized at five percent, for the period 1926-1930, is $508,969,360; for the period 1931-1935, it is $159,324,640. The I. C. C. believed (and so found) the earnings for the normal prospective year to be $14,625,-000.
The confirmed plan of reorganization provided for a $450,000,000 capital structure comprehending:
$117,000,000 fixed interest debt
105.000. 000 contingent interest debt
107.000. 000 preferred stock
121.000. 000 common stock.
This would result in $3,382,079 fixed interest charges and $9,046,324 contingent interest charges — an annual total of $12,-428,403. The I. C. C. held there was no equity for the present common and preferred stockholders.
In brief, the confirmed plan of capital structure provides for: (1) undisturbed status of P. W. A. and Equipment obligations ; (2) new divisional mortgages for the “Des Plaines” and “Sioux City” lines, at 100% and accrued interest, but the interest rate of the former to be decreased from 4% to 4% and of the latter to be increased from 3y2 to 4%; (3) issuance of new First and General Mortgage 4% bonds on the system with 2%% fixed and 1%% contingent commutated interest, and the issuance of a Second Mortgage Convertible 4y2% income bonds; (4) issuance of new preferred and common stock.
These securities — the new general mortgage, the second mortgage, the preferred and common stock, were apportioned in varying percentages to the respective security holders.
There are three vital, determinative questions (and numerous less important questions) presented by this appeal.
(a) The finding, and' the sufficiency of the evidence to support it, that the common and preferred stock of the old company are without value.
(b) The sufficiency of the evidence to support the finding that the estimated future normal income of the Debtor will not exceed $14,625,000 and will not support a capitalization, on reorganization, in excess of $450,000,000.
(c) Tlie effect of the favorable vote of the creditors upon the objections advanced by mortgage trustees and others to the plan, and the alleged failure of the Commission to make necessary specific findings of values, which are required by the opinion in the case of Consolidated Rock Products Co. v. Du Bois, 312 U.S. 510, 61 S.Ct. 675, 85 L.Ed. 982.
Other questions, but not so sharply pronounced in this case, as in the recent case of Chicago, Milwaukee & St. Paul Ry. reorganization, In re Chicago, M., St. P. & P. R. Co., 7 Cir., 124 F.2d 754, decided December 4, 1941, are: (a) The attacks on the fairness of the allocation of the securities among the various groups of lien holders. (b) The alleged preference shown the R. F. C. in the plan of reorganization, (c) The position of the so-called State Line Bonds, and the finding of the District Court as to the fairness of the plan as to these bondholders, (d) A consideration of the wisdom of selling the assets back of this mortgage.
In our approach to the approval (or rejection) of the plan which the I. C, C. has submitted, and which bears evidence of much study and thoughtful consideration of a mass of facts and figures, by this body, which is peculiarly well qualified to analyze and digest said statistics, we have assumed to occupy the role of guardian and umpire. We act as umpire or arbitrator so far as the sharply conflicting claims of different groups of bondholders are concerned. And we assume to act as guardians or trustees for the thousands of small security holders who, because their claims are small, could not be expected or required to go to Washington to present their claims, and protect them before the I. C. C., against the urge of groups which, before the I. C. C. and now before this Court, have insistently advanced and pressed their arguments in favor of larger allowances to their group members and smaller and less desired allocations to others.
It is unfortunate that this court may not have the benefit of advice of counsel appointed by it and representing all the interested parties, — the secured and unsecured creditors, the stockholders, and the public. As the law stands, counsel are limited in the scope of their employment.
True, we have had the advantage of helpful briefs by attorneys representing a large group of holders of bonds of different kinds, who have taken a broader view than could be expected from one who was employed to press the claims of a single group only. We are duly appreciative of this assistance. For, in a case where the assets are fixed in amount and not sufficient to pay all the secured creditors in full, the urge for a greater allowance to one must, necessarily, be at the expense of the allowance to another. In other words the sum of all claims — a, b, c, d, e, and f, etc., is X. Inasmuch as X is a fixed and unchangeable quantity, we cannot increase the amount represented by “a” without reducing the amount'represented by one or more of the other elements, b, c, d, e or f. It thus becomes apparent that before beginning our study of the details of the plan, we must ascertain and fix the amount represented by X. Dispute over it is at the bottom of all other conflicts.
Common and Preferred Stock. In as much as the outstanding obligations exceed $450,000,000, it follows that there is no equity for the holders of the old stock.
Unless the $450,000,000 figure can be raised, the common and preferred stockholders must be eliminated.
Vulnerability of the Commission’s figures must be limited to its finding that the probable income for the future normal year is $14,625,000. The importance of this link in the Commission’s finding seems to be fully appreciated by that body, for we have been benefited with compilations of charts and earnings which run the gamut of possibilities.
The following statement is made, of the earnings of the company for 1930-1940—
1930............... $22,837,630
1931....... 7,614,983
1932............... 2,384,574
1933............... 9,412,771
1934............... 8,356,854
1935............... 5,524,417
1936............... 9,060,616
1937............... 153,007 (deficit)
1938............... 1,053,247
1939............... 7,701,603
1940............... 11,675,027
Likewise, we have the earnings from 1913 to 1923, which are:
1913............... $20,382,666
1914............... 19,108,281
1915............... 19,393,742
1916............... 27,714,458
1917............... 23,762,324
1918............... 12,441,437
1919............... 12,678,750 (deficit)
1920............... 1,609,231
1921............... 6,651,136
1922............... 17,036,306
1923............... 15,843,375
Likewise, there are many facts and statistics showing the change from 1920 to 1930 and more particularly from 1930 to 1940. To illustrate, the following tables are submitted :
Debt Outstanding Inclusive Short Term Notes But Not The Collateral Pledged Thereunder.
December 31, 1919.......... $223,150,000
December 31, 1929.......... 351,646,400
July 1, 1935................. 384,963,420
December 31, 1938.......... 431,390,104
December 31, 1941.......... 469,518,043
Increase in Debt — $246,368,043, or 110.40%
Freight Traffic, Ton Miles.
(Thousands)
1920......................... 9,582,620
1929......................... 8,902,865
1935......................... 4,994,324
1938......................... 5,200,389
1939......................... 5,793,766
Decrease in Freight Traffic — 3,788,854 or 39.62%
Passenger Traffic (Passengers Carried One Mile).
(Thousands)
1920......................... 1,444,559
1929......................... 953,462
1935......................... 554,209
1938......................... 684,877
1939......................... 696,071'
Decrease in Passenger Traffic — 748,488, or 51.81%
The Commission found that the earnings of the normal prospective year are $14,-625,000. The approved plan provided for fixed interest obligations of $3,382,079, as follows:
The tables and charts which have been submitted in abundance, to show the income, estimated and required, the revenue trends, etc., are informative, but need not all be set forth. A study of them justifies the following conclusions:
The indebtedness of the debtor increased more than 110% in twenty-two years, 1919 to 1941.
The freight traffic decreased 39% in twenty years, 1920 to 1940.
The passenger traffic declined 51% during the same period.
There have been large annual deficiencies for more than a decade.
Had the debtor’s income available for interest (without payment of any Federal income tax) equaled $14,625,000, the sum which the Commission has estimated to be the income of the normal year of the future, it would have been insufficient to meet the interest charges during the last ten years. Deficits would have accumulated at a rate in excess of eight million dollars per year.
Fixed
Fixed interest obligations Principal Interest
Undisturbed obligations..,...............$ 12,698,000 $ 470,095
10-yr. serial note to R. C. C............ 663,000 26,520
.15-yr. serial note to banks............... 3,296,000(a) 82,400
15-yr. secured notes to R. F. C............ 25,000,000 (a) 625,000
Sioux City divisional bonds.............. 4,000,000 160,000
Des Plaines divisional bonds............. 2,500,000 100,000
First and Gen. mtge. bonds A........... 55,762,556(a) 1,394,064
First and Gen. mtge. bonds B @ 4%..... 12,100,000 524,000
$117,019,556 $ 3,382,079
Charges or
Other Requirements (contingent) Principal Dividends
Sinking fund (divisional bonds)........ 32,500
Additions & Betterments fund (minimum) 2,500,000
15-yr. serial notes to banks............. (a) 49,440
15-yr. secured notes to R. F. C............ (a) 375,000
First and gen. mtge. bonds, A........... (a) 836,438
Second mtge. income bonds, A.......... 105,058,904 4,727,651
Sinking fund (income bonds).......... 525,295
9,046,324
Total fixed and contingent...........$222,078,460 $12,428,403
Preferred stock........................ 106,996,076 5,349,804
Common stock......................... 120,899,773
Total capitalization................. $449,974,309
Total charges ahead of dividends on
common stock.................. $17,778,207
Ratio of debt to total capitalization. 49.35% 49.35%
With outstanding securities limited to $450,000,000, and with interest reduced to and in part made dependent upon income, a revenue of $14,625,000 will leave little for preferred stockholders under the new plan. Nothing could have been paid to either common or preferred stockholders under the existing set up.
Prior to 1929 the spread between the operating revenues and costs and the proportion of net operating income to total operating revenues had been reduced more than 50%. In other words, the percentage of net operating income to total operating revenues was, in 1900, 32.4%. In 1929, it was 19.9%. in 1936 it had dropped to 9.6%. It rose in 1937 to 14.1%.
The conclusion is unavoidable and also most important that the debtor can not continue to operate with an evergrowing indebtedness and a decrease in revenues, unless there is a radical change for the better in gross and net income.
First, and foremost in a plan of reorganization, is the ascertainment of a maximum of securities which may be issued. The amount for all securities, to-wit, $450,-000,000, is the I. C. C.’s answer to this inquiry. It meets our approval, not only because it is supported by evidence and is the finding of the I. C. C., but our independent study of the reports convinces us that a larger sum could not be sustained by the company’s future business.
The I. C. C. said:
“Competing forms of transportation, loss of export trade, and shifts in sources of traffic appear to have brought about a continuing change for the worse, as regards any reasonable expectation of the ability of this property to produce earnings sufficient to support a capitalization in which the present stockholders might be recognized as possessing equities of any value. Definitely a short-haul carrier, and one looking to passenger traffic for a large part of its business, results show that the debtor has proved particularly vulnerable to high-way competition. Capture of traffic by pipe lines has also been a serious factor, and the pipe line system is expanding.”
In reaching our conclusion we must admit that we have been compelled to depend upon the I. C. C.’s estimated income of the debtor in the future. We have not and can not give much weight to original or reproduction cost of the company’s properties, although we have not ignored those factors. There is more certainty that the fair value of all assets does not exceed $450,000,000 on an estimated net revenue of $14,625,000 than there is of the correctness of the estimated annual net income figure of $14,-625,000. At best the latter figure must have the uncertainty common to all prophecy. While the urge to raise this item, in order to give the old stockholders something for their stock, is strong, the necessity of certainty of interest and dividend payments upon the new securities is quite as important. Moreover, good faith and honesty to all concerned demand a plan which may be reasonably expected to measure up to the expectations of its sponsors. Failure so to do and a return of the debtor to the court for another major operation by the I. C. C. may well witness the demise of the patient.
A valuation is necessary for two purposes. Not only is it necessary to ascertain the presence of value in the old common and preferred stock, but for the purpose of an accurate and wise allocation of new securities. An ascertainment of the productive qualities of the road as a whole, and of the individual branches is quite essential to a fair allocation of new, to holders of old, securities.
It is seriously, and we think legitimately argued, that the Commission should consider reproduction cost in determining value. Section 77 sub. e. While accepting this urge, it must be remembered that reproduction value is but one of many factors which must be considered in determining value. In one case, it may be a material factor; in another it could be rather inconsequential. To illustrate, — an investor’s estimate of the value of a timber or mining tract, not in use, but held as reserve, might well be taken at a large percentage of original cost. Where, however, a property is being used to its full extent as a revenue producer, its original cost, and the cost of reproduction, must surrender their claim of importance to the dominance of earnings. In re Chicago, Milwaukee, St. Paul & P. Railway Co., supra; Consolidated Rock Products Co. v. Du Bois, supra. Mr. Justice Holmes, speaking for the Court, said, in Galveston, H. & S. A. Ry. Co. v. Texas, 210 U.S. 217, 226, 28 S.Ct. 638, 639, 52 L. Ed. 1031, “the commercial value of property consists in the expectation of income from it.” Consolidated Rock Products Co. v. Du Bois, supra, 312 U.S. at page 526, 61 S.Ct. 675, 85 L.Ed. 982.
While we are not only permitted, but required, to exercise'our judgment upon the soundness of these estimated revenues in a normal year, we must concede the superior ability and opportunity of the I. C. C. to pass judgment on such a factual question. It is unfortunate that the soundness of estimates must be incapable of demonstration to a mathematical certainty. But prophecy is ever subject to such criticism. Nevertheless, the difficulty and the uncertainty as to correctness of estimates, do not relieve the I. C. C. (or us) from meeting the obligation. Consolidated Rock Products Co. v. Du Bois, supra.
The unusual and extraordinary increases in revenue of carriers during the last year have made the Commission’s estimate the subject of determined and vigorous attack by the stockholders. This has caused us no end of anxiety and concern. This radical change (for the better) in the past year can not and should not be ignored. Nor can we dismiss it as undisclosed by the record which deals with a more distant past. It is something we can, and should, and do, take judicial notice of. It is, we believe, temporary, and like a crop failure year, in the Northwest — which this Debtor serves — not to be taken too seriously when viewing the long future of this railroad. In making this statement we are aided by the experiences of railroads during and after the last war.
It must, however, be a fact of vital importance that a substantial increase in revenue and a corresponding increase in value of assets would still leave nothing upon which the old stockholders could predicate a value for their stock.
Were it not for the provision of the statute which requires the I. C. C. to consider the reproduction cost in determining value, we would look for even greater guidance, to the earning power of the company, than was done by the I. C. C.
The finding which determined the absence of value in the common and preferred stock must be, and is, approved as fair to the creditors, to the stockholders, and to the public.
Relying on our holding in In re Chicago, Milwaukee, St. Paul & P. Railway, Debtor, supra, that the I. C. C. failed to make findings of values, sufficiently detailed to permit us to pass intelligently on the fairness of the plan and the reasonableness of the allocation of new securities among holders of old securities, the various appellants ask us to reverse and remand the case for further evidence and more detailed findings by said I. C. C.
This case differs from the Milwaukee case in this respect. Here, the creditors have received the plan and voted, almost unanimously, their approval of it. Our question then is not restricted to the sufficiency of findings to support the plan, but it is a review of a plan which has the approval of the various groups of creditors. The stockholders are eliminated. The creditors alone are entitled to the assets of the debtor. They are also entitled to a fair allocation of new securities in view of the value of their old bonds, having due regard to the value of the liened property and the future earnings of the road.
While fairness is a somewhat relative term and is not measurable, in its practical application, with mathematical certainty, courts will not go beyond the expressed assent and approval of the bondholders to ascertain whether fairness in distribution attained the goal of perfection. If the creditors „who are to share an insolvent estate understandingly agree on a division thereof, the problem of the court has been solved.
The creditors are divided into 21 groups, 14 of which passed upon the plan. They and the percentage of acceptance of their vote, are herewith set forth.
Table on Vote of Various Class of Creditors on Plan:
% of vote
Total in favor
Class Name of Security Outstanding Amt. Voted* of plan
(5) Preferred claims................ 25,823.49 $ 25,823.49 100.
(6) General mortgage bonds.......... 132,019,000 100,610,500 96.06
(7) Sioux City & Pac. bonds............ 4,000,000 3,464,000 100.00
(8) Mil. & State Line bonds............ 2,500,000 2,150,000 50.37
(9) Manitowoc, Green Bay bonds.....,. 3,750,000 3,169,000 • 100.
(10) St. Paul Eastern bonds............. 1,120,000 796,000 83.79
(11) Mil., Sparta & N. W. bonds........ 15,000,000 9,794,000 98.28
(12) Des Plaines Valley bonds........... 2,500,000 1,872,000 98.66
(13) St. Louis, Peoria & N. W. bonds.,.. 10,000,000 7,223,000 99.56
(14) 1st and refunding bonds............ 47,822,000 24,642,000 97.75
m 15-year 6%% bonds................ '14,775,000 8,641,000 98.43
(16) Convertible 4%% bonds.......i.... 72,335,000, 21,358,000 87.10
(18) Collateral promissory notes......... 47,313,882 47,049,192.55 100.
(21) General claims..........'.......... 1,017,375 203,941.47. 98.66
Total..................... $230,998,457.51 96.2
*Additional defective ballots: Class (6), $2,760,500; Class (7), $10,000; Class (9), $27,000; Class (10), $7,000; Class (11), $457,000; Class (12), $3,000; Class (13), $128,000; Class (14), $1,145,000; Class (15), $159,000; Class (16), $669,500; Class (21), $3,277.50.
As to the classes omitted, it should be said the plan was not submitted to them, either because they were not affected, were paid in full, or as in the case of stockholders, it was believed they had no interest under the absolute priority principle applicable in this case.
Four groups representing claims which aggregate approximately $54,000,000 and interest, have voted unanimously in favor of accepting the plan. Five other groups voted more than ninety-eight per cent for accepting the plan. These bond issues aggregate $27,000,000 and interest. Two groups, whose total outstanding bonds aggregate $180,000,000, voted more than ninety-six per cent for the plan. All groups, save one, overwhelmingly favored the plan. The one exception is the Milwaukee and State Line Group. The total of this issue was $2,500,000, and 50.37% favored acceptance. The Equitable Life Assurance Society of the U. S., and an affiliate, the Equitable Credit Union, voted their holdings of $1,003,000 against the plan.
, This single exception to the strong approval, which the plan evoked from the creditors, necessitated separate treatment.by the District Court, as' it does here! Section 77 provides for approval of the plan without the approval of twó-thirds of the creditor's of á class, provided the court, after hearing, finds that the plans make adequate provision for fair and equitable treatment of the interests or claims of those rejecting it; that such rejection is not reasonably justified in-the light of the respective rights and interests of all parties, including particularly the group affected.
The District Court squarely met this issue and made a finding of fairness, etc., which avoided the necessity of a two-thirds vote of approval by this group.
The District Court’s finding is here assailed as contrary to the evidence, and as having been made to avoid an adverse group vote in the otherwise perfect record of approval.
We will consider this phase of the case later, for we are now interested in the effect of the approval of the plan by the vast majority of the creditors, of different groups, on the various objections which have been raised.
As to those groups which have, without opposition of a single bondholder, expressed approval, we have no doubt the plan should be approved. Surely, the parties have a right to settle their law suits, to compromise their claims, and, in a bankruptcy proceeding, to stipulate as to the division of the estate among themselves.
As to those who represent better than ninety-six or even ninety-nine per cent, the question is not quite the same. The question then becomes, — To what extent may a creditor exercising his nuisance value right, defeat the long awaited and carefully worked out plans of the constituted authorities and approved by practically all who have taken the time to study and analyze it?
The Bankruptcy Amendment of 1932 was intended to defeat the efforts of nuisance value makers. They were no more popular with Congress than they had been with the courts. Case v. Los Angeles Lumber Co., 308 U.S. 106, 129, 60 S.Ct. 1, 84 L. Ed. 110. To both, they were looked upon as parasites. By permitting railroads to reorganize under the Bankruptcy Act, it was hoped their efforts would be frustrated. This was the object of Congress, the purpose, of the Amendment, Sec. 77. The instant case raises the question, — May the Congressional objective be frustrated by a group which represents one-fourth of one per cent of the creditors?,
It is not a question of a necessary majority (two-thirds). The majority in each group, in the case before us, was far greater than the minimum requirement. It is a question of whether the report of the I. C. C., which was full and complete,. fair and open, but lacking in one respect, — failure to make specific findings of values,— may, or should, be approved without said findings. In fact, the issue may be stated even more strongly against the minority. Does not the vote of approval supply the proof that the report of the Commission contained the evidence, and the Commission’s finding sufficiently state the facts, to justify us in holding that separate and more detailed findings are unnecessary? We think it does.
We have no doubt that if the decision in Consolidated Rock Products Co. v. Du Bois, 312 U.S. 510, 61 S.Ct. 675, 85 L.Ed. 982, had been announced before the findings of the L- C. C. in this case, the evidence which was before the I. C. C. would have been collected and stated in formal findings rather than in explanatory statement and fact assumptions. The story, factual and statistical, however, was all told. Its more important features were related in reports of an examiner and later, in the report of the I. C. C.
Doubtless, the creditors and the counsel who helped the I. C. C. solve this problem, obtained a rather clear idea of the difficulties of measuring the relative weight of the contentions of two claimants, each holding a thousand dollar bond — one on one division, and the other on another division— each the direct obligation of the Debtor. Each division was somewhat dependent on the other for its profit producing ability. Each was, and had been for years, in default as to interest. Each division had both advantages and disadvantages over the other and both were suffering in increasing intensity from hard road truck competition. Likewise, these creditors who voted affirmatively (practically all who voted) also learned that it was no simple arithmetic problem to appraise accurately the value of the securities which each bondholder received in the reorganization.
. Could these bondholders not waive a requirement that the I. C. C. fix value of the property covered by each mortgage? We think they could. Could they not waive the necessity of the I. C. C.’s making more specific findings? They could, and did. No objecting creditor, at the time, objected to the I. C. C.’s failure to separate its findings or to make separate coverage of specific property. If they felt the task was too great, or the results no better than the deductions which the apportionment of new securities indicated, we would not condemn them for their neglect, but say they were practical men who realized that additional specific findings would not change the result nor make the court’s study much more intelligent.
In short, we hold, the approval of the plan differentiates this case from the Milwaukee case

Question: Did the factual interpretation by the court or its conclusions (e.g., regarding the weight of evidence or the sufficiency of evidence) favor the appellant?
A. No
B. Yes
C. Mixed answer
D. Issue not discussed
Answer:

Answer: A