97 F. Supp. 918 | D. Or. | 1948
There has come before the Court the report of Estes Snedecor, appointed as Special Master to hear applications for allowance of compensation and reimbursement of expenses to various persons, firms and corporations who were interested and who may have aided the reorganization of this debtor. The report was filed on the 8th day of June, 1948, and notice was sent to all parties concerned. The Rules of Civil Procedure, which are applicable to this proceeding, provide that exceptions to such a report must be filed within ten days after the party has been served with the report.
As far as Morris C. Kessel is concerned, there is no doubt but what he was acting in his own interest and in the interest of clients who had bought these securities upon the recommendation of the firm with which he was connected. Mr. Delzell, in his testimony, gave full credit to the brilliancy of the suggestion which was made. He did not himself claim credit for this idea, but attributed it in his testimony to Mr. Tipton, who was an associate of Mr. Kessel. In a telegram, a copy of which Mr. Kessel has placed on file, Mr. Delzell has reiterated this position. The trustees and their attorney have indicated on many occasions that this was one of the vitally contributing factors to the final conclusion of the reorganization. While the Court did not disapprove the suggestion that Portland General Electric Company should offer to pay a dividend under such circumstances because it was believed to be in the interest of the community and of Portland General Electric Company itself that it be restored to the active business world as a dividend paying corporation, it must be remembered that not only Mr. Kessel himself, but all of the persons represented by his house profited largely by this immediate cash payment. While it did help to convince the bondholders represented by this house that they should vote for the plan, the Court is not of the opinion that anyone should be paid for making this suggestion which was so- highly profitable to these clients.
As to Mr. Beckett, his objection was filed within proper time, and, while it is not detailed and specific, the Court has thoroughly considered the merits of the claim and taken into- consideration all of the suggestions which were made at the hearing. The Court is of the opinion that the Master properly appraised in general the number of hours spent and value of the services of Mr. Beckett and Mr. Powell in connection therewith, and specifically approves this appraisal. The difficulty with the situation as regards Mr. Beckett was that the matters upon which the least time was spent according to the record are those which were probably the most valuable in the consummation of the reorganization. The attempt of Bonneville to acquire the properties of Portland General Electric Company at a junk or salvage value without the slightest regard for the continuation of the corporation as a community asset or for the interests of the thousands of local stockholders who had put their money in the securities of this utility was attacked by Mr. Beckett with ferocity. His services in bringing this, in connection with other matters, to the attention of the Securities and Exchange-Commission and of the Court were commendable and should be compensated outside the simple allowance for hours spent-Likewise, his services in furthering the final consummation of the plan and in attempting to get a dividend declared by Portland General Electric Company in the final stages, were of note and are also worthy of compensation above and beyond the amount of' hours noted in the schedule. However, his-greatest contribution was in bringing to the-attention of the Court the defects in the-prior reorganization of this corporation.. While the Court never finally ruled that these matters could be considered, the-course of the prior reorganization and the-concealment of certain of the transactions, therein from this Court, together with the-transfer o-f the Portland General Electric-Company stock out of the hands of the-Portland Electric Power Company just pri- or to the reorganization proceeding were-sufficient to permit the Court to order Portland General Electric Company into reorganization also.
All of these three factors had some tendency to assist the reorganization which has now been consummated. These factors, however, are all intangible, and it is difficult to weigh them with any accuracy. If the reorganization had not been presently consummated, then the third factor would have been of great importance, and the contribution to the success of the reorganization would have been outstanding.
As a result of these considerations, the Court determines that Mr. Beckett should he compensated further by an additional allowance of $4,500.
In all other respects, the report as filed is confirmed.
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Fed.Rules Civ.Proc. rule 53(e) (2), 28 U.S.C.A.