Court Opinion

ID: 6888624
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:35:45.891195+00
Date Added: 2024-06-11T16:05:47.124907
License: Public Domain

IIICKS, Circuit Judge
(dissenting).
I find myself out of harmony with the decision. It is a well-settled principle of equity jurisprudence that a stockholder has a right in a plenary suit to seek redress for wrongs done to a corporation where the proper officers thereof refuse to do so, but no such case is presented. Here, a dissatisfied stockholder endeavors, in the name of the corporation, to reorganize it under Chapter X of the Bankruptcy Act. This I think he cannot do. I find nothing in Chapter X that gives jurisdiction to the bankruptcy court for such purpose. From my viewpoint the proceedings under Chapter X are not intended therefor. They are intended for corporation reorganization purposes only; and according to Article I, Sec. 101, the provisions of the Chapter apply exclusively to proceedings thereunder. Of course a corporation has the right to file a petition for reorganization pui'poses but I think that the term “corporation” used in Chapter X refers to a coi-poration in the ordinary sense. It means a corporation as defined in the Act itself. I think that to allow Gurney to use the name of the corporation for reorganization purposes would imply jurisdiction in the bankruptcy court nowhere granted. It would require that court, before it reached the reorganization feature, to settle and determine all the complaints which Gurney, purporting to represent a class, makes against the directors, etc. It is rather clear to me that in his affidavit, attached to the petition, he sets forth enough, which, if properly averred in a bill in equity, would constitute good pleading, but for some reason not altogether apparent, he did not pursue that remedy.
From my viewpoint the appeal should be dismissed.