Court Opinion

ID: 6899613
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:53:34.556269+00
Date Added: 2024-06-11T16:06:07.671059
License: Public Domain

On Petitions for Rehearing and Answers Thereto
Petitions for rehearing, answers thereto, and cross-petitions for rehearing have been filed in these cases. The petition of the Commission by Note 1 asserts that if the Commission is bound by the District Judge’s determination “as to amount” to be paid to the preferred stockholders of Engineers “no remand to the Commission would be necessary, because the Commission [by its amendatory order of February 11, 1947] has already contingently approved an alternative allocation of cash to preferred stockholders at the amount of the liquidation preference if as a result of the processes of review in the District Court and on appeal therefrom this should be judicially determined fair and equitable.” The cross-petitions assert that the proceedings should not be remanded to the Commission for a somewhat different reason, specifically because by the amendatory order referred to the Commission approved payment to the preferred stockholders of $100 per share, and of any additional amounts which might be *740decreed “by the District Court of any appellate court * * * ”, It is also pointed out by the cross-petitions that the Commission approved the terms of the escrow agreement and joined in presenting it to the court below for an appropriate order and also that counsel for the Commission before the District Court indicated his belief that those portions of the plan of reorganization which were not subject to attack, should be carried out as has been done.
We are not unmindful of the delay, perhaps of short duration, which necessarily must ensue upon the return of the record to the Commission pursuant to our decree but we are of the opinion that neither the Commission, nor the District Court, nor this court possesses the power to waive the provision of Section 11(e) providing for approval of a plan of reorganization as fair and equitable by the Commission and by the District Court. Moreover, we cannot treat the Commission’s amendatory order of February 11, 1947 or its approval of the escrow agreement as a rejection of the role imposed on the Commission by Congress. The correctness of our position in this regard is demonstrated by the fact that the amendatory order of the Commission provides that the escrow agent may make payment to the preferred stockholders only when the order of the District Court has become final and not subject to appeal. What the Commission intended to effect by the order was nothing more than the establishment of a means for expediting the execution of the plan of reorganization when the approval required by the statute had been attained.
The Commission approved the plan as amended by it, requiring amounts equivalent to redemption premiums to be paid to the preferred, finding this to be fair and equitable. Thereafter it presented the plan to the District Court. The District Court found the plan to be unfair and inequitable and rejected it. We affirmed that decision for the reasons stated in our opinion. The Commission must now proceed to a reconsideration of the problems presented in the light of our opinion or procure the review thereof by the Supreme Court.
The loss which will occur to the common stockholders by reason of the remand may be lessened to some extent by appropriate investment of the escrow fund. An order will be entered authorizing the court below to take appropriate action on an application for investment of the fund, if such be made to it.
Other questions raised by the petitions for rehearing do not require discussion. Orders will be entered denying the prayers of the petitions and of the cross-petition.