185 F. 542 | E.D. Pa. | 1911
It may be that the proposed plan — which is not a composition, but a somewhat elaborate plan of reorganization- — offers the unsecured creditors their only opportunity of obtaining any payment whatever upon their claims. Assuming the plan to be judicious, the question remains: Has the District Court any authority to enforce it? The fact that it has been approved by a large majority of the creditors is not decisive. Unless the bankruptcy act (Act July 1, 1898, c. 541, 30 Stat. 544 [U. S. Comp. St. 1901, p. 3418]) empowers the court to take up the plan and make it effective, the creditors must do this by concerted, action among themselves and cannot have the sanction of a judicial order. The only section of the act to which I am referred for the necessary authority is section 27:
“The trustee may, with the approval of the court, compromise any controversy arising in the administration of the estate upon such terms as he may deem for the best interests of the estate.”
There is no precedent for such an order as is now asked for. The compromise that was substantially approved by Judge Holland in Re Linderman (D. C.) 166 Fed. 593, had no resemblance to the present plan, and in no sense supports the referee’s conclusion. The case of In re Woodend (D. C.) 12 Am. Bankr. Rep. 768, 133 Fed. 593, is in some respects like the present controversy. See, also, In re Lockwood (D. C.) 4 Am. Bankr. Rep. 731, 104 Fed. 794, and In re Frear (D. C.) 10 Am. Bankr. Rep. 199, 120 Fed. 978.
The order of the referee made December 16, 1910, is therefore set