Court Opinion

ID: 8875715
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:59:16.779724+00
Date Added: 2024-06-11T17:06:20.525832
License: Public Domain

KNOX, District Judge
(concurring in part).
With one exception, I am in entire accord with the conclusions of the majority of the Court. I feel that the payment presently to be made upon the outstanding bonds should be fifteen, instead of ten, per cent of the indebtedness. To my mind such payment would be beneficial — not only to the bondholders — but to the petitioners as well. In my judgment, their cash resources are amply sufficient to enable the increased payment to be made, and without detriment to the road. Certainly, I have no desire to cripple the efficient operation of a railway carrier. In my belief, railroads are the country’s most necessary public utilities, and they should not unnecessarily be hamstrung.
Nevertheless, for years and years, debt has been the bane of railway existence. For reasons that to me are inexplicable, many managements are reluctant to reduce debt as and when they are able. To this reluctance, many of the ills that beset the nation’s carriers can properly be attributed. But, be this as it may, a majority of the court has outvoted me on the amount of the principal payment now to be made. In view of this, a recapitulation of the figures that will support my views would be noth*768ing more than a gesture. I refrain from the effort of making it. I desire merely to add one comment.
Were the principal of the bonds to be reduced by a payment of fifteen percent, they would, with the additional security that the Court’s decision affords them, enjoy a market value considerably in excess of going prices. In other words, the added value of the securities would be reflected in the market place. Holders desiring to sell their securities, instead of having to await the operation of the sinking fund — the establishment of which I favor — over the next twenty years would probably obtain higher prices for their bonds than will be possible under the decision of my colleagues.
For these reasons, I record a dissent from the decision of a majority of the Court.