Document: 399 U.S. 392 90 S.Ct. 2054 26 L.Ed.2d 691 NEW HAVEN INCLUSION CASES.* Nos. 914—917, 920, 921, 1038, and 1057. Argued March 30, 1970. Decided June 29, [Syllabus from pages 392-397 intentionally omitted] Whitney North Seymour, New York City, for Manufacturers Hanover Trust co. Lester C. Migdal, First Mortgage 4% Bondholders Committee. Joseph Auerbach, Boston, Mass., Richard Joyce Smith, Trustee of the Property York, Haven Hartford Railroad Co., et al. Leonard S. Goodman, Washington, D.C., United States Interstate Commerce Commission. Hugh B. Cox, Penn Central Co. Mr. Justice STEWART delivered opinion Court. 1 These cases represent latest state litigation arising merger Pennsylvania railroads, which we upheld two Terms ago in Penn-Central Merger N & W Inclusion Cases, 389 486, 88 602, 19 723. A condition that was Central's promise to take Company as an operating entity—a fulfilled on December 31, 1968, 11 months after its own formation. The ultimate question presented by now before us is price must pay assets Haven.* 2 * 1. Central. proposed combination railroads first came under consideration parties Commission more than 12 years ago, a decade prior eventual consummation.1 formally sought permission merge Act, 49 U.S.C. § seq., 9, 1962.2 On April 6, 1966, authorized roads.3 union carriers largest railroad history Nation,4 bringing together companies 'dominate rail transportation Northeast.'5 In 1965 component roads enjoyed total revenue excess $1,500,000,000 net annual income over $75,000,000.6 held some $72,000,000 working capital $1,242,000,000 combined investments.7 With about 19,600 miles road 'sprawling between Great Lakes north Ohio Potomac Rivers south,'8 at inception nearly twice size next system East three times third largest.9 3 predicted economies effected were likewise enormous; it thought within eight they would exceed $80,000,000 annually.10 Those savings represented value, capitalized 8%, $1,000,000,000. 4 1967, considerable involving protective conditions various affected competitors,11 issued modified order authorizing merger.12 October 19, court judges, convened District Court Southern review Commission's pursuant 28 §§ 1336, 2284, 2321—2325, action.13 January 15, this affirmed with minor modifications, thereby sustained validity merger.14 Two weeks later, February 1, merged. 5 2. Haven. division system. At time merger, however, independent Class I 1,500 line Commonwealth Massachusetts Rhode Island, Connecticut, York; such, sixth northeast region England.15 operations area extending Boston connecting nine other served cities greater 100,000 population, well number important defense establishments.16 1964 employed 9,800 people paid them wages amounting $70,000,000.17 About 30,000 commuters used every day reach work City alone.18 As described Commission, 6 'The has both large passenger freight business. It fourth carrying States, second highest commuter all such roads. volume business substantially greater. England ranks tenth traffic among eastern district. Its service considered be extreme importance industrial well-being southern England.'19 7 financial decades vicissitudes. company's decline fall, passage into, out of, back into reorganization, have been chronicled elsewhere.20 went reorganization 77 Bankruptcy 205, 23, 1935. Due measure difficulties including formerly leased lines reorganized road, elapsed filing debtor's petition Connecticut court's approving consummation plan reorganization.21 8 emerged 1947 vastly simplified debt structure only most senior holders secured interests survived.22 But following company again deteriorated, prompting seek partial then discontinuance former Old Colony Massachusetts.23 By 1959 render chance surplus earnings 'slight best.'24 Through late 1960 early 1961 management expended great efforts stave off bankruptcy obtaining loans or grants Federal State Governments.25 middle 1961, current liabilities exceeded $36,310,000,26 losing cash rate $18,000,000.27 9 Finally, July 7, petitioned step later find had far too long delayed: 10 '(I)n interest creditors, employees public (the railroad) should did. grave problems best much less acute infinitely manageable if not put until almost entirely depleted, credit practically gone, maintenance down respects bottom barrel.'28 Immediately upon their taking Haven, trustees appointed obliged borrow $8,000,000 meet payroll.29 situation did improve time. spite spartan sizeable reduction numbers employees, costs operation offset eroded away accumulated cash.'30 1964, 13a(2) 13a(2), authority discontinue suburban train area. There followed hearing, adjournment afford authorities opportunity—ultimately unavailing—to negotiate contract continuation service, motion expedited disposition 'by reason critical nature Haven's finances, irretrievable drain impose resources, increasing adverse effect creditors *.' granted trustees' application, concluding period beginning four continuing thereafter, 'critical' 'drastically weak *.'31 evident verge collapse.32 year-end amounted $20,521,000, $16,685,000 plus long-term payments due coming year. obligations payable one year totaled $189,042,000. retained account showed deficit $81,672,000; account, $16,700,000. For railway $16,000,000, overall $1,000,000 less. default principal debt.33 view trustees, 'absolutely faced economic obsolescence continues independent, short-line, terminal railroad.'34 13 11, 1965, notified 13a(1) 13a(1), intention interstate trains effective 1966.35 If carried effect, drastically curtailed Massachuetts, ended completely Island.36 spring 1966 noting 11-year experienced 'an unending succession reverses,' concluded '(t)here totally lacking any hope future survival carrier, except trunkline railroad.'37 acceded part notice discontinuance, but invoked statutory power keep many ground 'passenger N(ew) H(aven) national necessity termination either lead distress Massachusetts, severely damage Nation generally.'38 14 gave way deteriorated still further. 1967 'the prospect continued very dim.'39 lacked even expense fund satisfy 'six months' 'highly unlikely there ever will one.'40 found become 'desperately critical'; depletion 'so serious that, present loss continues, insufficient left September payroll approximately $1,400,000 per week.'41 15 end, so reserve. August 31 balance fell $4,500,000—a precarious requiring $1,750,000 week simply expenses.42 estimated $3,100,000 fall $850,000.43 position thus point where shutdown 'imminent *.'44 16 3. inclusion negotiations. From outset proceeding charged conservation dwindling recognized 'a trunk promising feasible means viability re N.H. H.R. 289 F.Supp. 451, 456; cf. 281 65. After filed application 1962, new company, private negotiations 26, 1962. See 378 F.2d 635, 636; Report, 327 I.C.C. 475, 480. said, 'apparent salvation see also 304 793, 800. 17 noted, 1966. doing, '(w)ithout radical change circumstances, denied, face insuperable task itself bankruptcy.' I.C.C., 522. combination, 'without complete H(aven), consistent Id., 524. Accordingly, required 'all included applicants' transaction,' conditioned approval inclusion, id., 524, 527. spelled obligation toward unequivocal language. Condition Report stipulated follows: 18 Transportation shall include transaction fair equitable terms may agree subject Within date report served, file approval, inclusion. event are unable agreement (and Court) impose. 'Jurisdiction hereby reserved purposes. Consummation applicants indicate full assent these requirements.' 553. 20 reiterated 21 'Consummation approved herein constitute Company, successors assigns, acquiescence stated appendix attached report.' 555. 22 Having determined require remitted negotiation side, other, already bargaining time, having drafted preliminary documents, dated 22, 5, provided assumption operations. Oscar Gruss Son v. 261 386, 393; Discontinuance Case, 151, 175 n. 6. 21, executed Purchase Agreement transfer U.S., 508, S.Ct., 613; F.2d, 636.45 properties Central, exchange consist stocks bonds Central.46 23 reciting background growing deficits, insufficiency internally generated demands. view, afforded practicable Debtor interested Debtor's estate They submitted continue possible, grant leave press basis Agreement. 637. 24, goal preserving 'has policy proceedings Three days 24 November 16, ratified R. Co.—Merger—New 331 643 ('Second Supplemental Report'). looked fact able indication though selling no value entity, nevertheless degree virtue requirement merger. 667. '(W)here bargained arm's length,' said 'each side presumably capable determining interest, our primary function discover whether interest.' 656. undertook analysis properties. Although 'carrie(d) probative force values involved, (was) controlling.' 657. determine 'on evidence pertaining thereto, merely supporting evidence.' 660 12. 25 Upon record, asset transferred given $125,000,000. payment sum 'just reasonable' 'fair equitable' Act. Unwilling defer could place recognizing danger end 'very real,' 654, aid prop up debtor during interim ensure functioning acquisition 509, 613. 4. litigations. juncture determination subjected simultaneous judicial separate forums. Court's itself, bondholders commenced five actions set aside order. three-judge reconvened hear shortly thereafter consolidated one. certified Haven—the sale Central—to court.47 Pursuant 77(e) 205(e), objections court. Thus, identical same single-judge Connecticut. 27 10, court, extensive briefing argument numerous issues underlying question, several major respects. therefore vacated just reasonable remanded cause further proceedings. Bondholders' Committee 418. 13, argument, independently returned 451. overriding price, courts accord: fixing worth $125,000,000, understated transferred. understatement $45,000,000 $50,000,000; $33,000,000 $55,000,000. F.Supp., 440, 465. Meanwhile, reserves called for—and received—drastic action. remanding 77, ruled unless ordered 1969, entertain dismiss proceedings, resulting service. 459. recommended direct purchase deferring resolution. 466. 29 remand, reopened record reception accordance instructions reviewing courts. revaluation properties, announced 25, resulted increase $37,700,000, yielding $162,700,000 334 53 ('Fourth 'other pricing considerations' taken report. Application considerations $22,081,000 newly calculated leaving $140,600,000—$15,600,000 initial estimate, $17,400,000 lowest range suggested Courts. addition, $5,000,000 expenses and, directive 74, 76. 30 revised 2, 1968. objections. released without failure result immediate once pressed evaluation. pending representatives refunding mortgage against York. Chase Manhattan Bank, bonds, defendants.48 intervention—to plaintiff defendant. 32 May 28, rejected accepted determinations issues, overruled respect valuation Harlem River Oak Point yards added deductions introduced remand. instituted 'underwriting' equivalent common stock &. 793. An implementing decision entered 1136. 33 18, bondholders' judge dissent, adopted underwriting devised 305 1049. decree judgment 1969.49 34 Courts agreement, rounds review, substantial come them, disagreement matters $28,000,000 took appeals appealed Appeals Second Circuit. cross-appealed certiorari advance judgment, 1254(1) 2101(e), Rule We noted probable jurisdiction accelerating permit Term. 396 1056, 757, 751.50 II 35 consider dual questions destined Act.51 Confronted duplicate litigation, asked enjoin certification Counsel urged 'if restrained, complaint Section 5(2) Act denied injunctive relief. convenience tilt(ed) heavily favor allowing proceed extent advised,' since injunction delay 36 ruling correct. open question. acquired 'exclusive property wherever located 77(a), 205(a).52 Subject control, whom empowered 'to operate debtor.' 77(c)(2), 205(c)(2). responsibility conserving benefit ongoing interest. Bartlett, 384 819, 821, cert. 390 1003, 1245, 103; Collier 77.02, 469—470 (14th ed. 1969).53 goals statute bestowed 'broad general' trustees. Cf. Palmer 308 79, 85, 60 34, 37, 84 L.Ed. 93. provisions 'doubtless suffice(d) confer (reorganization court) appropriate adjusting rights rights, beyond ordinary proceedings.' 85—86, 37; Collier, supra, 77.11, 498—499. Together, 'unquestionably' 'full property, also, corollary, (might) asserted it.' Callaway Benton, 336 132, 147, 69 435, 444.54 One precisely propose exercise—the confirm providing 77(b)(5), 205(b)(5). To certify proposal prerequisite approval. 77(d), 205(d). Injunctive intervention disrupted essential phase reorganization. 37 avoid by-passing rather federal commencement suit Government moved complaints lack subject-matter jurisdiction. support argued (1) pledged satisfied yet reviewable; (2) aspects case, exclusive court; (3) jurisdiction, stay hand matter equity unnecessary interference 38 Government's opposed bondholders. Significantly, oppose motion. Indeed, agreed 'most 'and perhaps all) raised plaintiffs reviewable Reorganization Court,' conceded concurrent awkward, least theory,' tentatively scope would, practical matter(,) Court.' dismiss. actions, letter statutes orders overlap' forums, nothing decisional law superseded arrangement. 424 39 correctly observed ordering properly exercised preclude exercising power, passing third. 5(2)(d), 5(2)(d).55 can undoubtedly carry simultaneously Benton 140, 440. Here 77. 40 Moreover, neither nor 'complete.' hand, coercive Central: approve disapprove qua compel assets. So concerned, stood potential purchaser, willing buy 137, 439; Group Institutional Investors Chicago, M., St. P. P.R. 318 523, 550, 63 727, 742, 87 959; Cir., 161 413, 434 (Frank, J., dissenting), sub nom. Protective Bonds 858, 67 1754, 91 1865; 54 595, 619. conveyance do consent 41 Moved largely concern might entire forums Given complexities jurisdictional merits, produced understandable solution problem insofar ensured case risk spent litigating wrong forum. 42 circumstances inexorably command test 77(e)(1) yield results different those 5(2)(b) mergers 'equitable' inclusions 5(2)(d). 440.56 mandates 'inconsistent purposes' 77(f), 205(f), requisite findings acts equivalent.' R.I. 168 587, 594, Texas Brown, 335 855, 82, 93 402. This stressed incorporates elements Joe Paper Atlantic Coast Line 347 298, 310, 74 574, 581, 98 710, proposes act 'in requirements restrictions applicable mergers' 309; Ecker Western Pacific 448, 481, 692, 711, 892; Coal Coke Rutland 143 179, 186. demonstrated awareness interrelationship, specifically devising 654. 43 suppose adjudicate expressed certain loss-sharing arrangement lie reached without, discloses, party. 44 confronted questions, recourse standards '(N)ot involve duplication labor (accept) might'—and did—'result contradictory rulings issue(s).' Warren, 108 164, 167, aff'd 310 865, 1118. stayed traditional principle res, draws claims supra; Oklahoma Texas, 258 406, 66 771; 212 118, 126, 129, 230, 232, 233, 435; Wabash Adelbert College, 208 38, 54, 182, 187, 52 379; Farmers' Loan Lake Street Elevated 177 51, 61, 564, 568, recognize commonly applied assert rem dispute, here personam character. conflict nonetheless 'between coordinate concurrent, overlapping belonging class paramount categorically particular other.' supra. And conflict, settled proposition '(t)he through possession vested, while holds possession, controversies relating thereto.' Lion Bonding Surety Karatz, 262 89, 480, 484, 871. 45 Surely vesting comports basic purpose Congress enacted prevent notorious evils abuses receiverships,' 184, egregious ancillary appointment district property. 467. course, technical sense, ultimately going resurrect discredited practice receivership—it 'would tend greatly foment conflicts protection interests, ride circuit, demonstrating positions successive courts.' 23. 46 need decide exclusively grounds out. course virtually decide. 'registered adjudicated law.' 511, 614. permitted postponement acceptance requirement, 613, because 'perforce accept respecting 510, 47 'completeness' earlier referred, cured; remained irrevocable whatever confirm, appeal here, bind commitment. Of themselves 5. involved accorded transferred, resolution issue essence process. heart (of reorganization) finding property.' 147 40, 49, 325 884, 65 1577, 89 1999. 77.14, 538—539; Consolidated Rock Prods. Du Bois, 312 524—525, 61 675, 684—685, 85 982; National Bank Cincinnati Flershem, 290 504, 527, 307, 78 465; 652. short, courts, estate, congruent litigation.57 48 Prior decisions appeal, lend deferred Chicago N.W.R. a. 65, brought Northern Illinois, seeking three-judge-court previously 'limited power' 66. 'seemingly language' 'any Commission,' 'appeal connection lies judge) sitting bankruptcy, judges) assembled Urgent Deficiencies Act.' 67.58 summarily judgment. 320 718, 64 369, 422. Even closer arose Railroad—Group Providence Corp. Stockholders ICC, 133 488. Shareholders Providence, undergoing refusal provide joint rates Providence—exclusively function. 1(4), 15(6), 15(6). shareholders contravene revenue-allocation formula Supreme operated lessee lessor *, pass accounting operation.' 493. Again, affirmed. 350 926, 76 300, 100 810. 50 hold estate.59 III 51 turning passed rulings. amended, recanvass objectives statute—the preservation generally 469—470. objective should, emerge 'living, dying enterprise,' Van Schaick McCarthy, 116 987, 993, understanding (is) like insolvent estate.' 86, 38. (Footnote omitted.) adds oversight agency 'specially system.' Ibid. contemplates functions administrative (will) cooperatively reorganizations.' Warren Palmer, 138, 867. structuring cooperative endeavor 'placed hands development suitable plan' railroad. 468, 705. ratio stock, amount fixed distinguished contingent kind needs survive vicissitudes cycle—all expert respect.' 545, 740. 604. wherein 'public interest,' does refer apart adequate system, Lowden, 225, 248, 251, 208, includes restricted sense,' ibid., character capitalization corporation,' 473—474, 707; 'adequacy economy efficiency, provision use facilities.' 292 522, 531, 824, 1402; Securities 287 12, 45, 48, 138. clear legislative deference initiator stems 'recognition everyone advantages utilizing facilities investigation many-sided finance reorganizations experience fields appraisals public, stockholders.' draftsman entails abdication workings agency. occasion say describing work, "Congress purport unbounded discretion regulatory body." Burlington Truck Lines, Inc. 371 156, 83 239, 245, 207. Far displacing function, strikes 'balance court.' chancellor remains necessary factor reorganization'; 'attained coordinated action 474—475, 708. ascertain each element concerned over-all appraisal, wrongly decided legal allotment securities 420. 55 more. Under 77(c)(13), 205(c)(13), special master hearing desire—a permits 'building group men (entirely Commission) thoroughly informed matters.' H.R.Rep. No. 1897, 72d Cong., 2d Sess., (1933). 77(e), hearings received supplementary unknown conventional deemed exercise extraordinary 'cram down' powers.60 S.Rep. 74th 1st (1935); 1283, (1935). appoint masters evidentiary reflects unique powers possessed 56 sum, confided 'power material conclusions.' Reconstruction Finance Denver R.G.W.R. 328 495, 1282, 1290, 1384, 1400; 498—499, 608—609. reposes satisfies 507. determination, Here, elsewhere look conclusion 472—473, 706—707; Freeman Mulcahy, 250 463, 356 939, 781, 813; 600. often entail statement mathematical certainty estimate what market when speaks subject. 'But based embraces relevant facts 526, 685. 'estimate' mere 'guess' rests appraisal variance command.' 473. performing valuation, make, calls "informed, judgment" own. 520, 682; Coriell, 426, 436, 678, 681, 1300. 57 That appellate alter 'our limited.' 498, 608. myriad factual trying de novo. 'It enough reverse appraised somewhat differently. warrant Court, end.' 749. IV 58 negotiated Pennsylvania, rested liquidation earning entity. recognition reality desperate situation, upset' 77(b)(5) negotiators' approach determinant 'long dry power.' 'If thing undeniable,' concluded, 687. 59 light chronic character' operation, 658, understandably valuation. concept 'going value' fictional Haven,' 'because ignores Railroad's operations.' 455. Before studies consisting assets, funds, investments, real it, 'Liquidation realized liquidation, cost dismantling discounting proceeds worth.' 697; 797—798. study, made nine-month persons who, found, familiar railroad, area, study valued 1966; Both revealed half consisted holdings estate. gross Grand Terminal $230,290,000; $150,321,000. 62 Consistent hypothesis, deducted incurred place. but, bridges, trestles, culverts, removal conversion realty nonrailroad use—costs negative value. hypothesized six-and 10-year period, taxes aggregating $59,481,000 $76,847,000, respectively; $62,172,000. arrived deducting along discount reflect hypothesis receipts six-or period. embarked sale, dispose quickly practicable; accordingly bulk completed years.' 663. 6% challenged low conservative themselves. 664. conveyed 'is $125 million 1966.' 688. earlier, $125,000,000 figure, consequent remand round review. won here. items, $200,000,000, items turn. dispute complex consists parcels midtown bounded 42d south, Madison Avenue west, 60th north, Lexington east. Included Barclay, Biltmore, Commodore, Roosevelt, Waldorf-Astoria hotels; Pan American building office buildings Park Avenue; Yale Club. assessed $227,225,000. right run 1848, tracks predecessor extend lives respective charters companies. 1848 easement legislation App.D.C. 403, 1028, 1030. underlay subsequent contracts 1870's, '80's, '90's 1903 1904 placement below 15-block stretch Terminal. entrepreneurs realize compliance edict vast development. 1907 built. instrument recited rebuild Terminal, tracks, proper conduct railroads. promised needed land rights-of-way; make demolition old station construction new. contained impair agreement. 'doth demise, let lease' 'Railroad terminal' defined 'mean land, improvements thereon , ways abut 68 Paragraph contributions parties' car locomotive usage station. paragraph obligated minimum $160,179.92 regard percentage manager enterprise rentals compensation charges applicable.' 1909, began financing referred 1913, supplemental express fully intent hereto construction, use' user join holding, leasing Terminal.' 1913 amendment detailed sharing reimbursement costs, reaffirmation procedure established credited enterprise. hundreds subagreements leasing, financing, constructed Income charges, itself. 70 None agreements expressly 'excess income' satisfaction expenses. century academic only, annually revenues. succeeding year, accounts income. demanded refused. protect 71 When Dentral, non-operating excluded takeover, final outcome then-pending litigation. insisted got absolute title thereupon advice counsel. told fee leasehold cessation monies advanced lawsuit participate income, alternative risking 'tremendous delay' 462, sufficient transferring be, exchange. 72 dissociated Some claimed $20,000,000—the unreimbursed advances books. Others $50,000,000—the one-half 5%. Still others itself—nearly $115,000,000. 73 eschewed claim. Confronting relationship unpredictability unwilling completion possible parties, claim $13,000,000. figure average unrelated sums: $5,000,000, representing nuisance claim; $20,000,000, share proportional Faced disclaimer controversy Draconian properties.61 Based his contractual relations touched above salient features, Special Master 'joint venture partnership kind.' dismissed untenable sole ownership acquire right, title, partner undivided fee. 1907, realty, perpetual legislation. 'not table posture supplicant.' joined design requirements; undertaken 'major years'; ends usage, committal revenues project. 'There mutual pooled apply operational 75 akin partnership, expenses, belonged equally car-use ceased met equality partners dealt he entitled income; terminated (New Haven) Terminal.'62 Master's incorporated reference opinion. Terminal's requested 'consider any, attaches defraying terminal.' 463. Fourth liquidation. 30—31. Following office-building hotel projected $4,550,000 50% share, $28,438,000. 39. awarded round. complied request access buyer it; sight bid Terminal; accordingly, valueless. 344 32. access, demand free 11. stand station.63 79 Many dropped contention.64 longer reduced status grantee retaining privilege entry All income.65 What remaining meeting Yet central unrefuted: devoted expenses; residue available distribution sure, customarily shares allocated bases convenience. 'resulted, purposes, corresponding proportion entering Accounting being treated railroad's relieved pro tanto liability 80 argue somehow 'freed up' ejected theory. 81 'Both committed pouring Account 1907. enter expended, superior individual regardless wheter utilized cent fifty facilities, all. contemplated discontinued saddled larger expenditures 82 Nevertheless, argues commitment creature construed Master, 1968 'wiped out' existence,' says Chase, (basic) (both share) restriction sees fit.' Stated fashion, self-defeating: derives solely 'wiping necessarily leaves obligation. But, importantly, true occasioned source. Since definition was, matter, equal surendered gain: costs. token, gained matching arrangements valuable compensating too, merit. misnomer describe 'free.' entry, privilege, sense owner edict. legislature 'upon (have) hereafter between' predecessor. N.Y.Sess.Laws c. 143, Thus never imposed 'free' elimination whether, offered party event, pertinent applies force. succeeded Conversely, relief attributable activity, lost exchange.66 gone shown anyone penny deficit-ridden operation. nobody liquidating lose money, is, again, worthless. moving preserve Whether us. it. State's paying depends contingencies: liquidation; exclude bestow similar unused; assignment; State, anything choose instead subway connections Bronx Manhattan. imponderables speculative defy reasoned attribution 86 yards. 160 acres south Bronx, Major Deegan Expressway Bruckner Boulevard other. yard occupies 4,000,000 square feet across Queens; qualified appraiser facility heavy concern.' mile yard, connected existing trackage Division line, characterized 'one desirable City.' worthy note. Hunts Market, yard. $100,000,000 municipal installation wholesaling produce metropolitan promontory flanked Rivers, spur track owned city. receiver plans expansion. 43—44. Port Morris situated midway lying athwart connects linked branch Branch division, System. interchange runs border estimates testimony who bring $32,000,000 residential $26,000,000 use; another showing $22,650,000 $18,090,990, use, $15,585,000. lower witness—$18,090,990. 668. 'there show unfair inequitable,' clarification desirable. 464. centered witness. soon became valuing pursued vengeance. higher witness premise occupancy, electrical presence commanded 10% premium values. witness' assumed strip depressing incurring removal. 42. Adoption $4,000,000 value.67 adhered estimates, reiterating reliance premise. justified dismantle rest scrapped, link connections. running division. point, acknowledged arriving yards, unaware Morris. attributed significance unawareness connection, 'extremely doubtful' Once vanished, reasoned, perform switching incentive unprofitability perishable absence clearances classifying facilities. 44—45. 92 erred rejecting appraisals. undisputed abandon 807. cease enterprises 160-acre Market well. feeding millions residents point. assume idly life huge costly cut, midst planning enlargement, effectively pressures bear steps absurd 807—808. 94 least, error overturn matter. makes evident, startling deny adherence uprooted According justify carrier connect latter Point, liquidated.' 47. (Emphasis supplied.) forced build areas, noncontiguous carrier. cry activities adjoining changed hands.68 construct place, market.69 presuppose 'On record,' reiterated, H(aven)'s serve, compelled industries, Maket.' shred rational managers hypothetical debtor, ignored stripped value.70 95 deductions. recalculated directed $162,700,000. 'A sort inheres assets,' immediately shut begin 6-year program parcel-by-parcel, tie-by-tie.' 53. declined debtor. 96 exceeds $125,000,000), obliging fair. 97 establishment floor liquidated parcels. Such theory assumes opportunity heard. wholly inconsistent absorb public's H(aven). Any broken inequitable conceive break going. demands conceiving constitutional foregoing abandonment portions repeated services assuming devote use. serve public. premised outright rejection awards windfall supported 54—55. 99 reasoning, proceeded considerations'—costs Acts. alleged abandon; limitations limit creditors' entitlement computed instructions. section 1(18) right.' 57. 101 'pricing elements: one-year securing operations; bulksale purchaser sell, commanded. Together $22,081,000. 102 (a) delay. certificate abandonment, precipitated lengthy process one-year's actual freeze sell-off Report. delay, $4,940,000 $2,500,000 taxes, $7,946,000 worth. 103 concept, deduction violated valued. Neither postulated imposed, presupposed lawful 798. presupposition rooted hard kept alive, despite hopeless condition, name anticipation 104 'By 1963 Trustees courses open: accomplish obviously not. followed; stretched originally forecast, 'interim' seven years; 'losses reasonably incident interest' $60 million. 105 'Like Laban old, servitude debtor—in creditors. duty suffer losses fairness demand.' 106 disallowance not, broad concept. draw insist obtain operations: quarrels process, expertise gauging diminution rather, narrow initially assignment amounts unwarranted double deduction. 107 urge account. governing first. world occurred, say, competent project incidental delays. refined parties. re-examination surely comes predicting likelihood puts uniquely finder *.'71 'refinement' rationale confronts imposing obstacle making original considered—and rejected—Penn 'that allowance earliest anticipated constant assets.' 698. implied proceeding, weigh balance. deal, round, deliberately before. Justification, realization mind midstream. 109 selected 1966—represented six-year sale. doing so, relied shift reports. 'but adoption started, certainly 801. presided inception. 'In judge's familiarity especial weight us.' 533, 1282. Not erroneous; how conclusion. 110 challenge Instead, urging 'hear communities abandonment. takeover segments, allow plans.' 58. notion 'sheer speculation,' 507, 612, argument. 111 'During years, government, states, general inability And, merged engaging holding bodies, guardians act—to adopt measures Response tax assistance covered 1/3 losses. Otherwise attention highly prospect, states municipalities slightest segment 112 bankrupt standby legislation, through, (except west-end services); governmental bodies incorporating 800—801.72 113 think correct that: 114 burden losses, responsible agencies arrange furnishing opportunities. amply bite apple; another.' 115 attribute self-interest. is,' options, risks therein, heard ascribe someone else selection action, inaction.' depleted $60,000,000. fail self-interest bettered Nor substance contention failing waived object imposition shows viable demonstrates resigned bearing contains consented $15,000,000 top tens bear. '(S)uch superimposed first, Pelion Ossa, imagined cannot Act.73 117 (b) bulk-sale discount. 25,000 rights-of-way States. realty. prepared agent, instances outside appraisers. agent drew experience, department engaged nonoperating trusteeship 853 sales $13,900,000. past 'firm base' estimate. 118 sell lots normal-sized He specific zone-by-zone basis. valuations, adaptability discounted whenever records indicated questionable title; $15,971,000 department; prices, $8,178,000. 119 120 price. appears services.' 60. 121 avoids, assumes.' 61. testified 'single turn, probably users profit resale.' testimony, 10.5% return investment, 75% borrowing 9% 25% self-financing internal charge 15%, investment additional 4.5% reduced. $6,695,000 61—62. 122 'improper reason.' 805. 123 'Value, plant piece existed Their give seller, *. difference wants develop item 124 answered reflected nonsale seller pointing purpose. 'That pay, implicit standard i.e., trustee less.' 806. 125 protests duplicated discounts taken; previous argued, absorption caused mass marketing 1,700 depression operations—factors says, quantifying undertaking realty; attract owning disposing land.' insists constituted 'simply analytical device approximating occur retailed promptly 126 analysis, 127 'overlooks namely principles parcels, perparcel Our answer certificate, therefore, 128 '* appropriate.' 129 setting forth compulsory 'completely independent' single 130 lawfully bulk-transfer reducing per-parcel assets.74 devoid improvement, zero rationally deus ex machina spend 131 professional developer operator. extra levy, entrepreneurial activity retailing His undertake him handsome hardly turn entrepreneur, himself forbid do—dismantle rid railroad-connected talents 132 factors. projection six years. value—a $17,563,000. 661. although these, be. 461; 427—428. concurred. close discount, $3,800,000 figure. 39—40. changes netting $6,600,000 worth, failed adjust inapplicable formulation computation proceeds, opinion.' 810—811. submit form short brief, comments, formulations computations own, brief. calculations, replied. adjudging paid, '(t) $2,415,899 inasmuch improperly applying 1136, 1137. 134 brief calculate detriment $8,177,633 last unsold written sides sheet, wash eliminated computing neither: books, column. result, Committee, $2,066,488. shortcoming ties rails, $1,474,057. Third, erroneously spread months; overstatement $118,000 proceeds. $47,121,400 equipment, materials entirety $1,372,646 correction $130,000 adjustment 135 errors sold reply concedes miscomputations' favor. existence conflicting joins timely objection mistakes. 136 better witnesses differed amounts. 40. bypassed unpersuaded 17. persistent corrective submission adjustments suggested, untimely claims, presentation instruction court—an straighten reports, boundholders frankly concede aggregate $5,000,000. doubt, context cases. resolve accuracy useful stage resolved oral issue. affirm finding. 137 loan-loss formula. projecting three-year short-term lease appropriate, $25,000,000 first-priority certificates. 702—706.75 100% second, third, $5,500,000 718—719. sliding-scale aspect disapproved improper deterrent assertion 444, suggestion Douglas 557—558, 637—638 (separate opinion), abandoned 71—72. 138 ceiling derived assumption, calculations massive $5,400,000 Coupled formula, loss. abrogation sliding scale, 'should percentage.' 139 ability contain deficits optimistic. drawn $14,000,000 loan supposed year; exhaust months. 72. grim: $15,672,000, $8,200,000. Despite $2,800,000 prediction, prorating 11-month 74. discussion. 140 Now bondholders, out.76 141 denies blame door litigious insistence event. notes formation, envisaged 142 While letting stand. Without ascribing fault party, note unfairness portion lease. countervailing assured control drop bucket; 61% figured one-third contribution received; (e)ither loss.' all-or-nothing approach. represents pragmatic compromise competing controlling contrary disturb investments. complains concerns Connecting Railway Express Agency jointly 50—50 basis, 20, subsidiary company. REA railroads; outstanding stock. 144 hypothesis. whose accepted, $18,000,000 funded whatever. REA, little tender offer stock77 recent permissible parcel post packages. 678. 145 attack worthless, Were argues, bids shares, pleased. 146 Committee's overlooks worthless consideration, pausing assess correctness placed foreclosed res judicata. Committee—as bondholders—took directing value.78 7. 'Going-concern' 'going-concern' stressed, calculated, supplement universally over, display temerity pressing prove, figure.79 148 going-concern physical $55,075,000 intangibles organizational replacement defunct overlooked probability rebuilt form. More fundamentally, repudiated antithetical proceeded. realistic bleak prospects future.' 686—687. 149 intangible treat others, depending happens Nothing expense, worlds.80 150 8. disputes 950,000 stock.81 stated, '(O)ne length or, instruments options claimants Estate benefits merger.' confirming anywhere $75 $100 closing average, $87.50, 688—689. $87.50 reasonable. 689—690. 151 calculation trustee, expert.' saw 'no why fluctuations 462. 152 cursorily unfamiliar plans, undue neglected 153 renewing prophecy erroneous, pointed performance date, 3/8, points suspect sell-offs, throughout fluctuated 1/2 1/2, mean 1/2. contended, bundle turned $17,000,000 $23,000,000 154 date. 155 '(T)he effort assure transfer. all, using tap expected fruition ten upward trend 156 giving intrinsic achieved, assists relieving divest crippling cash, prejudicial program, affords profits.' 808—809. 157 'at assurance gain.' nub inequity getting sure gamble Central.' 809. necessitate valuations 'To equitable, fulfilling $83.1 conveyed.' 158 reaches maintains Stock Exchange consecutive (not counting closed trading) 1978, conclusively presumed has, shares. If, maintain aforesaid, high prices preceding actually forthwith liable successor successors, 809—810. 159 inure follow third-party buyers. option 1978 manner: option, operative discharge underwrite blocks 50,000 designated date.' 162 series features. First, guide stock; merger; secure inclusion; fourth, appreciations enjoy. assessment gain. possibility package 163 order, hesitancy accepting findings, conclusions, evidence. impact events assessing propriety entered. Aluminum America, 416, 445. unrealistic. 164 fraction purported full, particularly remembered objected receipt 165 determines implements sum. Further shareholder creditor V 166 finally quite go violates Fifth Amendment compensation. 167 seller's hypothesizes reasons length, lesser today reassessment accord theirs liens. uncompensated violation Amendment. presses amassed $70,000,000 pre-bankruptcy priority 126. "losses million.' impaired security unclear, undeniable 1960's, uncertainties engendered doubtful depressed interests. 613.82 169 disregard injurious consequences suspension enforce lien claim, 'presents addressed discretion—a improvidently exercised.' Continental Illinois 294 648, 677, 1110. duties Constitution. 170 before, solution, Penn-Central, out-flow foreseeable future, finds erosion clearly consequently constitutionally impermissible, approved.' 171 doubt consumed bar result. absolute. 172 'cannot sacrifice depression-proof created. invested utility owe (B)y enterprise, (they) theirs.' 535—536, 1400. 173 Only quoted approvingly '(i)t fundamental expect use.' added: 174 'While respect, Procrustean measures. dictate vital jettisoned availability alternative. pawn sacrificed strategic purposes 510—511, appraise worked unconstitutional room receive assests depreciation 1961. tell prevaluation are. bondholder foreclosure liens 1967—well date.83 176 creation contributed recompense meant dismissal salvaging appeared achieve. groups application; endorsed creditors; jettison everything achieved glimmer begins dark tunnel,' carries aura unreality borders fantastic.' 68. reject lingering sense. glance seeming anomaly liquidate operate, state-created obligations. recover $1,000,000,000 produce. 178 'Calling unreasonable meaning 5(2). (which dollar applicants) ward remain relies H(aven).' 687—688. 179 clarity force: 180 whole which, merge, tremendous benefits, helplessly sick do. merge. granted, paid.' 465—466. 181 opinion, reviewed writs 914, 916, 1057, part. 915, 917, vacated, abstain 182 ordered. 183 Judgments 1057 part; 917 921 184 DOUGLAS 185 MARSHALL BLACKMUN 186 BLACK, HARLAN joins, dissenting. 187 cases, easily fear 98-page my briefly stated. N. W. 723, difficult Railroad, 1336(a), 2321 2325, orders. examine decisions. same: requirements? dramatically different. substituting ideas method appraising increased sharp contrast, 'severe limitations' matters, 1049, 1053, carefully examining plan, agency's determinations.1 Judge Friendly, writing threejudge court: 188 'Essentially, disagreements concerning liberty substitute notions sincere comply tasks assigned remand.' 1065. 189 today, judgments, Friendly's indicates, sustain turns inquiry determination. narrowly limited ensuring standards. included, position, elaborated follows, abuse sustaining them. excellent compelling idea acted discretion. myself Friendly substituted views Commission.2 190 conclusions odds affirms mistaken abstained peculiar offers make-weight arguments reaching questions. fulfill mandate valuation's dignity exist. rule opposite. disposes abstained, adopts deferential clears affirmance intimately related, regret either. 191 identical, circumscribed flexible standard: equitable,' (d) 'equitable.' important, findings. 472, 892, emphasized 'Valuation (bankruptcy) way: 192 valued, dollars, otherwise. objects bill obstructive chosen approached near seemed draftsmen legally possible. Judicial reexamination language think, standards.' 707. 193 508—509, 1289—1290, 536—542, 736—739, 959. delegated conform 194 'are guard unfairness.' 621. 'conclusions rational,' seems me 'second-guess deliberation.' 195 restraint inherent uncertainty 'An intelligent indeed ones, approximation. margin fluctuation uncertainty.' Dayton Power Light Public Utilities 290, 647, 1267. inevitable magnified have, happened, know scarcely happened imaginary 1056. extremely determinations, impossible approximated Because enhanced uncertainty, unusually wide, upset clearest abuse. 196 criteria becomes believe abused deciding exceedingly discussed principles, whole-hearted fine wrote aware limits scrutinize significant '(i)f demonstrable errors, *,' unlike refused re-examine better.' sets adequately disputed points, repeating 197 affirming attempts submit, erroneous assumptions. 198 205; 2325. really conclusion, 'primary jurisdiction' citing inapposite dealing alternatively, 'abstained' process.' Ante, 428. Actually, issuing Review conclusory. 'unfortunate duplicitous conferred 418, 425. B 199 errs, reasoning behind novel times, role somewhere trial hybrid strenuously briefs case. arguably justifies attitude provides justification novo estimates. However, weighing reorganizations, areas 1289: 200 affecting Constitutional 201 Fleming, 241, Pacific: 202 allowed wide 203 factfinding interest-weighing viewing quasi-trial 204 Alternatively, majority's determinations. confidence exist involves standard, 205 poised unsatisfactory alternatives. powers, precluded 206 Today's burdening owes $28,000,000. deterioration seriously compromised position3 reduce chances success stake. establishing maintaining efficient services. eye welfare 535, 1303. 614—615. soundness vitally obligation, overvaluation unnecessarily jeopardize fairly debatable justifiable guarantee 'Congress entrusted formulating 'will compatible 77(d).' 544, 740, struck discretion, unwise borne consumers Treasury. 207 above, al.; N.A. al., Smith Circuit 1970, Eastern Pennsylvania. modification deals. 494, 606; Baltimore 386 372, 379, 1100, 1103, 159. 479 ('Merger 392, 493, 605. 380, 1104. 489. 447, 1140 Douglas, J.). 605; 501. prescribed indemnity Delaware Hudson, Maine, Erie-Lackawanna 'protected carriers' recently formed Norfolk Western, sheltering disposition. 531—532. abrogated protected reconsider decision, modifications retroactive effect. ('Reconsideration 4, declined, dissenting, enforcement 259 964. Later, 386. 27, reversed 1100. reconsideration Ohio, 776, 1478, 520. Ensuing developments recounted text. 330 ('First 279 316. 602. 381, 1104; Passenger Service, 79—80 ('Suburban Case'). Trustees, Trains, ('Interstate 163—164. 169. Suburban 80. 452—454, 1142—1144 J.); L. Brandeis, Financial Maine (1907); Other People's Money 129—136 (1933); Joint Governors 53—73 (1923); E. Sunderland, Brief History 1—5 (1948); Capture Fortune Magazine, 1949, p. seq. 337, 338 Mulcahy 867, 412. 640. Department Utilities, etc. 559, 339 943, 796, 1359; 59. 278 592, 606, aff'd, 405 50, Abex 394 999, 1592, 776. 606. 601. 52. 65—66. 80, 106. levels. explained 'Southern food, fuel, raw industry. serving economy, haul unbalanced flow equipment. faces deadheading foreign cars move lines. regional shifts, England's outbound products increasingly high-value lightweight expansion modern, comprehensive highway especially susceptible diversion for-hire trucking service.' I.S.C., 170. 164. 175. 152. 172, 173. 612. 333. findings: 'No contested forecast NH 1967; source funds beleaguered Penn-Central. devastating hardship temporary NH's sections country proceed; so. *' 355. '(W)ith serious, good patient die quest best.' 335. 643, 651 653. encumbrances, exceptions. encumbrances negotiating elected attempt recapitalization enlarged corporate survive, 'immediately merger,' negotiators reported loanloss formulas. 334; 648. Subsequent 1967. bound behalf memoranda provision, embodied 11.7 statement, stipulation document Pennsylvania-Central thereof, (i) (ii) provided, Agreement.' impropriety appear repudiation contract's) spirit.' 333; 393 394. pursue 'two-step' specification holders. authorization pertinent, postponing merits prematurity presented. 639. reconstituted closed-end, nondiversified withheld 'distributive' 1121, 1123—1124. indenture mortgage, 464, bonds. 70. Faith prepare reflecting 1969. adjustments, $990,000 stocks, relative percentages originated 528. accompanying undergone rate, moot judgments Reports. 919, Worcester 555, 758, 748, 918, 1062, 759, 756. companions main plenary Courts' commence 1(18), Worcester's charter revision eliminate voting shareholder; limiting Worcester, personam, latter's 300 (opinion court). embraced variety eventually multiple avoided. 323—324, 497, 503, 505 'since conjunction herein.' 525; 527; 142, 441, 553; Meyer 161, 382, 384, 595; Thompson Magnolia Petroleum 309 478, 483, 628, 630, 876; 662, 600, 1110; Ex parte Baldwin, 291 610, 615, 551, 553, 1020; Isaacs Hobbs Tie Timber 282 734, 737, 270, 271, 645. 676, 992. Callaway, estate: 'Clearly, dissipation suffered lessor's recoupment lodged supervising 144, 442. 5(2)(d) provides: (merger) transaction, require, terms, territory requesting text 55, part: reasonable, (an subdivision statute) conditions, abstention participation 'party proceeding; participated questioned litigant there, Appeals, writ adjudication plan. 67. noteworthy evidently 409, equitable'—language instinct statute. Case Los Angeles Lumber 106, 115—119, 7—9, 110; 77(e)(1), 205(e)(1). Commission.' 'such impose, Repeated references art meaning. studied omission mention significance. two-thirds stockholders plan; acceptances procured forbidden law: Provided, That, stockholders, finds, treatment facts; conforms (statutory) 'present(ed) 422, 1865. specialized skill extend.' 429 (L. Hand, concurring). unquestioned. 205(e). 1912 erected Hotel Biltmore subsidiary, supplying reimbursed 1957. 1958 controlled objection. sign lease, forfeited Misc.2d 414, N.Y.S.2d 605, modified, A.D.2d 309, 216 928, curiam, N.Y.2d 1077, 230 226, N.E.2d 194. paralleled Master. credits survived Misc.2d, 428, N.Y.S.2d, 618. Appellate agreed, had, converted owners together' lands exploitation covering tracks. (properties) A.D.2d, 318, 936. sums money 'except docilely 319, 937. fee, encumbered vis-a -vis partner. 320, principally nor, did, assigned. directly indirectly, availing furnish burdensome mitigation measurable case.' books base extrapolate capitalized, site $700,000 $8,750,000 predicated profits constant. regard, this, calling prediction decrease, augmentation decrease benefited accrued 806—807. asks award payment. doubtless owed ruling. discussion authority. toll value; nothing. newspaper articles arguments. evidence, example so-called Building specially built center floor. higher, $675,000 provided. dismantled. reconstruction type tenant. rental $400,000 appraisal. Differences tenant-occupied procedures appraisals.' 43. 'provide therefor,' switch shippers business, 1(9), 1(9). clearance line. refuted contention. intimate error, 'doubtless' enable industries someone, Market; via connection. month summer 2,300 44. 'At appraisals, downward $461,000. duplication, implicitly examiner saying: proffered processing knowledge unnecessary.' 29. comport observations service: states. 'Far indifferent indulged prevail interval, produced. conditioning equipment commutation levels underwritten, lash strength Tax Island continued, incurred. urgently continuance seem suddenly discovered, stopped taxing ago. Commuters passengers service; burden—everyone ounces blood corpse; gives transfusion badly needs. talk saving accumulating ahead forcing ladder priorities, today. grow otherwise relieved, wish goes necessary.' Entirely explanation, leads happen; Absent explanationWe expedite shorten pause enabled accelerate fifth explanation tacit assumptions viewed shifting chosen. pause, increases $15,386,000 deducted. proof 'constant assets' occurrence land,' 'We diminish. increase.' how, Fourth. frequently requires abandoning (typically authority) typically salvage acquired.' See, e.g., Abandonment, 317 393, 425; N.S. M.R. 191, 200, 213 83, 373 378, 1313, 420; Fort Dodge, D.M. S.R. 708, 712; A. E.R. 537; Arkansas O.R. 501, 505. certificates cancellation contend unfair. excludes rent $2,600,000. 'more 718. attacks disbursement place; category. 387 485, 905. beneficial Railroad. revived responded $100,000,000. inapposite. 212, 273 52, 219 410, Coach Lines 778, 1480, city condemned Lines. reproduction depreciation. capacity profitable rates, excluding 'intangible addition tangible 220, 221, N.E.2d, 412, 413. disclose yielded Authority Trans-Hudson Corp., 457, 285 231 Hudson Rapid Tubes 1002, 1244, 103, tunnels 'dim N.Y.2d, 465, 736. tunnels, $88,000 build, $400,000,000 replace; plugging up. 467 470, 737 739. depreciated concern. 471—472, 32, Rather, properties—precisely 689. satisfactory mortgage. General Refunding between. 442 18. concurred corrected subsequently Apart ante, 488—489, concur differ handling disagreed. footnote 399,

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