Document: 348 U.S. 341 75 S.Ct. 386 349 910 99 L.Ed. 376 1245 SECURITIES AND EXCHANGE COMMISSION, Petitioner,v.DREXEL COMPANY. No. 153. Argued Feb. 9, 1955. Decided 28, As Amended April 18, Rehearing Denied See 913, 598. Mr. William H. Timbers, Washington, D.C., for petitioner. Arthur Dean, New York City, respondent. Justice DOUGLAS delivered the opinion of Court. 1 The question in case is whether Securities and Exchange Commission has jurisdiction to pass on a fee be paid by Electric Bond & Share Co. Drexel connection with reorganization plan filed its subsidiary, Power Light Corp., under § 11(e) Public Utility Holding Company Act 1935, 49 Stat. 803, 15 U.S.C. 79 et seq., U.S.C.A. seq. We hold that does have jurisdiction. 2 problem arises out unraveling vast empire Share, pursuant command Act. present one several phases various plans adopted bring system into compliance.1 instant phase this system's grew filing voluntary Electric. 3 owned operating subsidiaries States Mexico. provided (1) would transfer new holding company, Middle South Utilities, Inc., holdings those subsidiaries, as well certain other assets; (2) preferred stocks retired distributing security holders shares another subsidiary Electric; (3) remaining distributed common stock warrants (4) pay $2,200,000 settlement intrasystem claims. 4 required do three things: first, sell or exchange stock; second, acquire subsidiary; third, cash amount It was not sufficient get approval 11(e). also necessary terms Commission's steps it. 5 Share's securities 'sale' Act, includes 'exchange.' 2(a)(23). registered company. No can made company without approval. That 12 Act.2 obtained, shows,3 procedure which submits fees sale scrutiny Commission. 6 receipt an 'acquisition' within meaning 2(a) (22). subject 9(a).4 could had only submitting 10 supervision 'acquisition.'5 7 payment claim incident 10. And, noted, all transactions were parts 8 therefore, application §§ 10, 11, asking it.6 9 consolidated proceedings involving Electric's heard them together, March 7, 1949, entered order proceedings, approving both. respects said, 'It further ordered application-declaration referred above it hereby granted permitted become effective.' Electric, same gave approval, additional conditions, second reads: 'That specifically reserved determine reasonableness appropriate allocation expenses remuneration incurred said Plan, amended, thereto, than fairness stockholders' actions enumerated Part II amended.' 11 however, reservation 'the cannot supply failure fix reserve matter relation they incurred.' There are two answers argument. First, three. Second, over 'in Plan' but thereto.' latter obviously included matters 12, chief collateral ones before at time. parties so understood it, petitions fee, invoking held hearings fixed Drexel7 neither nor thought adequate.8 applied District Court expense orders. approved. Appeals affirmed, except Drexel; reversed 'for lack Commission'. 210 F.2d 585, 592. 13 see no such infirmity order. plainly power payable Share. To sure, did any when applications 12. merely fees. suggestion possible, least far concerned, since directs approve unless finds unreasonable. But means assuring will Certainly, need entire abeyance until completes reason why Commission, interest orderly administration, defer consideration fees, time view perspective evaluate worth each contribution. read extremely hostile eye deny administrative leeway. 14 error overlooking essential critical role play relying alone. contrast between 11(f) plain, concerned. Section contains express provision concerning subsection, applicable court where receiver trustee been appointed, makes 'to whomsoever paid' Cf. Leiman v. Guttman, 336 1, 69 371, 93 453. provision. plan, if 'fair equitable persons affected'. relevant fair equitable. In re Service Corp. Jersey, Cir., 211 231, 232. Payment excessive historic abuses procedure, whereby utility companies milked, abuse sought correct. Cong.Rec. 4607; S.Rep. 621, 74th Cong., 1st Sess. 33. Questions protective committees special considerations irrelevant here we put aside. supra. Different come individual their own counsel involved. seem, example, stockholder, say, agreed his lawyer representing him proceeding business seem direct bearing plan. 16 affiliate are, may be, different. At Congress so, explicit making them, covered detailed record activities knew many proclivity predatory practices. large; often loaded affiliated companies9 concealed accounts. decided end worst these practices control ones. When came intricacies finance, expressed desire brought light decide who pays what amounts reasonable. faithful statutory design granting asserted here. 17 Reversed. 18 FRANKFURTER, whom BURTON joins, dissenting. 19 Fully aware complicated interrelations holding-company systems, enact scheme severance intercorporate relations among public interests. Instead, specific provisions devised against given authority effectuate defined functions different provisions. Enforcement entailed authorization secure simplification regulation acquisitions dispositions. Duly mindful conduct inter-company affairs, effectively equipped regulate particularized. vest fee-fixing comprehensive dealt distributively. relating particular proceeding. 20 us relates fixing section full condition reorganization. involved parent, confirmation securities. subjected consummation likewise Again, respectively, passing reserving propriety regarding incurred. 21 1935 reticulated statute, hodge-podge. observe respect purpose care formulated. 22 I affirm Appeals. For see: Co., S.E.C. 978; id., 392; 615; 143; 866; 1146, aff'd sub. nom. American 141 606; Id., 329 90, 67 133, 91 103; 191; United Gas 531, affirmed 58 F.Supp. 501; 162 409; 786. 12(d) provides: shall unlawful use mails instrumentality interstate commerce, otherwise, owns publicutility assets, contravention rules regulations orders received sale, maintenance competitive commissions, accounts, disclosure interest, similar deems protection investors consumers prevent circumvention title rules, regulations, thereunder.' Supra, note 2. 9(a) provides part: 'Unless acquisition approved unlawful— '(1) thereof, acquire, directly indirectly, assets business'. 10(b) 'If requirements subsection (f) satisfied, that— '(2) consideration, including remuneration, paid, given, reasonable bear sums invested earning capacity acquired underlying acquired; * *.' A petition rehearing states 'public company' therefore inapplicable. prejudice position opinion, company,' concededly applicable. 12(c) declare dividend retire, redeem protect financial integrity safeguard working capital public-utility companies, dividends unearned surplus, 12(f) negotiate, enter into, take step performance transaction otherwise title, reports, costs, duration contracts, broad powers adequate give old HARLAN participate. asked reimbursed fee. denied reimbursement, saying services 'were designated compliance additionally, primarily, designed simplify itself apex system. '* Any subholding must necessarily toward ultimate resolution overall problems primary concern.' took contest action. $100,000 Drexel. awarded $50,000. reimburse (see 6, supra), following traditional practice using convenient pocketbooks

Category: 7