Heesch v. Pittsburgh Steel Co.

40 F. Supp. 243 | W.D. Pa. | 1941

SCHOONMAKER, District Judge.

This is a class-action brought by plaintiffs as a committee, suing in behalf of all holders of 7% cumulative preferred stock of defendant-corporation, attacking the validity of this corporation’s plan of capital readjustment.

The plaintiffs allege in a petition filed herein that the defendant-corporation is now seeking a compromise of the matter here in litigation by the offer of 5%% prior preferred stock to the holders of the outstanding 7% cumulative preferred stock. The plaintiffs allege that this proposal is a compromise of this suit, which requires the approval of this court under Rule 23(c) of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c.

This rule reads as follows: “23 * * * (c) Dismissal or Compromise. A class action shall not be dismissed or compromised without the approval of the court. If the right sought to be enforced is one defined in paragraph (1) of subdivision (a) of this rule notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs. If the right is one defined in paragraphs (2) or (3) of subdivision (a), notice shall be given only if the court requires it.”

Up to the present time there has been no proposal filed in this case either to dismiss it or to compromise it. Until that is done, there is nothing before the court upon which to act. It is only when a proposal to compromise is filed in a class-suit that the provisions of this rule apply with reference to notice to all members of the class. Then only will the court be called upon to approve or to disapprove the proposed compromise.

The plaintiff’s petition for an injunction will therefore be denied. An order may be submitted accordingly.