Court Opinion

ID: 6900015
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:53:59.312732+00
Date Added: 2024-06-11T16:06:08.376482
License: Public Domain

FRANK, Circuit Judge
(dissenting).
Although with some doubts, I agree with my colleagues’ conclusion that, under § 77, sub. c(6), the reorganized New Haven may validly continue to operate the lines of the B & P (Boston and Providence) until such time as the Interstate Commerce Commission otherwise orders. I agree, too, that the court below properly retained jurisdiction of claims by the B & P against the Bankruptcy Trustees of the New Haven arising from the operation, by those Trustees, of the B & P Lines.
I think, however, that it was error to “retain” jurisdiction of claims of the B & P against the reorganized New Haven arising from its operations of the B & P lines after the discharge of the New Haven Trustees. What I consider the fatal flaw in my colleagues’ reasoning in disposing of that issue is, I think, revealed in their statement that it is “contrary to the fact” to make “the assumption that the reorganization proceedings [in the court below] have been terminated with respect to the lines of the Boston and Providence.”1 That statement necessarily rests on the implied proposition that the court below has had within its jurisdiction the “reorganization with respect to the lines of the B & P,” and has not yet “terminated” that jurisdiction. But that proposition is contrary to fact: The “reorganization” with respect to the lines of the B & P has never been within that court’s jurisdiction. It has been, and is now, in the exclusive jurisdiction of the federal district court for the District of Massachusetts. The court below therefore had no authority to deal with the reorganization of the B & P or with any sale or other disposition of its properties. For that reason, the New Haven Plan did no more- than this concerning those properties: it contained an offer to the B & P for the acquisition of those properties by the reorganized New Haven. In other words, the B & P was nothing but an offeree. That Plan recognized that the acceptance of the offer required the approval of the Massachusetts District Court. It follows that that part of the New Haven Plan will never become operative if the Massachusetts court refuses to give that approval, with the result that the offer is not accepted. In that event, if the reorganized New Haven still desires to acquire the B & P properties, it will have to make the B & P a better offer. As such a revised offer may perhaps necessitate a revision of the New Haven Plan, the court below had authority to retain jurisdiction of the New Haven, to the extent necessary to permit that court to consider and pass upon an alteration in that Plam But I fail to understand 'how that fact gave that court the power to consider and pass upon claims of the offeree, the B & P, against the reorganized New Haven, arising out of its operation of the B & P properties.
The reorganized New Haven can no longer legitimately be wet-nursed by its reorganization court. Wherefore, the court below, concededly, could not validly retain jurisdiction over claims made by shippers or passengers, stemming from the operations of the reorganized New Haven. See Towers Hotel Corp. v. Lafayette National Bank, 2 Cir., 148 F.2d 145, 148; North American Car Corp. v. Peerless Weighing & Vending Machine Corp., 2 Cir., 143 F.2d 938, 940; In re Flatbush Avenue*342Nevins Street Corp., 2 Cir., 133 F.2d 760, 762; Clinton Trust Co. v. John H. Elliott Leather Co., 2 Cir., 132 F.2d 299, 303, 304; Bakers Share Corp. v. London Terrace, 2 Cir., 130 F.2d 157, 159.
To my mind, claims by the B & P against the reorganized New Haven, because of its operations of the B & P lines, are no different in that respect. If any such claims should arise, the B & P (or its Bankruptcy Trustee) should be permitted to assert them just as if the New Haven had never been in reorganization (i. e., without seeking relief in the court which reorganized the New Haven). Nothing in § 77, sub. c(6) requires the submission of those claims to that court.2 Nor is such “retention” of jurisdiction over the adjudication of such claims — which retention, under my colleagues’ decision, may last for years3 — needed by that court “in order to protect its decree, to prevent interference with the execution of the plan, and to aid otherwise in its operation.” 4 True, those claims might augment the consideration which the reorganized New Haven may have to pay if the present offer to the B & P is rejected and if the New Haven then wants to acquire the B & P properties; true, too, the court below may be concerned with alterations in the New Haven Plan on account of such augmented consideration. But those facts, I think, do not bring the adjudication of those claims within that court’s jurisdiction — any more than if the New Haven Plan had contained an offer to an independent railroad, never theretofore operated by the New Haven, for the acquisition of that independent railroad’s properties.
The “reservation” is objectionable, I think, nc' oecause it aims to keep the New Haven “in tutelage” but because it reaches out to control and puts “in tutelage” another railroad whose reorganization and property-dispositions are not the business of the court below. Such a result finds no justification in what we have said in Towers Hotel Corp. v. Lafayette National Bank, 2 Cir., 148 F.2d 145, 148, or elsewhere.

 This statement appears in. my colleagues’ discussion of the first two contentions made by appellant. But the reasoning implicit in that statement underlies my colleagues’ discussion of the appellant’s third contention which I am here considering.

 I agree that, should the offer to the B & P lines he finally and forever rejected, and should the New Haven Plan be in all respects fully consummated, nevertheless § 77, sub. c (G) would call for operation of those lines by the reorganized New Haven until the Interstate Commerce Commission otherwise ordered. My colleagues seem to me (perhaps I am wrong) to suggest that, in such circumstances, those operations, until the Commission so acted, would still “bo subject” to the court below. I see no warrant in tbe statute for such a conclusion.

 As I understand my colleagues’ opinion, “retention” of jurisdiction over such claims is to continue until the B & P accepts the present offer or some better offer or until negotiations for the acquisition of the B & P lines have ended in a rejection of any offer whatever. That point may not be reached for years.

 Towers Hotel Corp. v. Lafayette National Bank, 2 Cir., 148 F.2d 145, 148.