162 F.2d 409 | 3rd Cir. | 1947
Lead Opinion
The narrow question presented for adjudication is the propriety of an injunction issued by the lower court, in connection with approval of a plan submitted in accordance with Section 11(e) of the Public Utility Holding Company Act of 1935, 15 U.S.CA. § 79k(e).
The facts leading to this appeal are fully set forth in the excellent opinion of the court below. 58 F. Supp. 501. For our purposes, it need only be noted that the appellant is a minority shareholder of Electric Bond and Share Company, a public utility holding company with several subsidiary holding companies. The ’proceedings from which the instant case stems involve the United Gas Corporation, an operating public utility, subsidiary of one of the holding companies of Electric Bond and Share. After ' an exhaustive hearing on the various aspects of a plan of reorganization proposed as a means of effectuating the intent of the Public Utility Holding Company Act, the Securities and Exchange Commission submitted the plan as modified to the district court for approval and enforcement. The court carefully reviewed the plan, approved the findings of the Commission, and
“All creditors and stockholders of United (including the holders of warrants to purchase the common stock of United) Bond and Share and Electric and all other persons are hereby permanently enjoined and restrained from doing any act or taking any action interfering with, or tending to interfere with these transactions, or with the carrying out of the Plan or any part thereof, including the commencement or prosecution of any action, suit or proceeding at law or in equity or under any statute in any court, or before any executive or administrative officer, commission or tribunal other than such proceedings before the Commission or this court or the Circuit Court of Appeals as may he appropriate under the Act or the Rules and Regulations promulgated thereunder.”
The appellant contends (a) that the Act permits an injunction to be issued only as specified in Section 18(f), 15 U.S.C.A. § 79r(i), (b) that, even if the court could issue an injunction, such injunction should not have been of a permanent nature; and (c) that the injunction is contrary to Section 265 of the Judicial Code, 28 U.S.C.A. § 379, and Section 19 of the Act of October 15, 1914, c. 323, 28 U.S.C.A. § 383.
The complete answer to the appellant’s first contention is to be found in Section 11(e) of the Act, 15 U.S.C.A. § 79k(e).
The appellant’s second contention points out that the injunction is of a permanent nature, while the court is not exercising permanent jurisdiction over the assets of United Gas.
Finally, the appellant contends that the injunction is in violation of Section 265 of the Judicial Code, 28 U.S.C.A. § 379, and Section 19 of the Act of October 15, 1914, 28 U.S.C.A. § 383
We are of the opinion that the injunction also meets the requirements of Section 19 of the Act of October 15, 1914. By the terms of the injunction the court below retains exclusive jurisdiction, a multiplicity of law suits may be avoided, and there may be a prompt and unimpeded execution of the plan of reorganization. These objectives are plainly within the purview of the Act. These reasons for the terms of the injunction are amply set out in the lower court’s opinion. At the oral argument the appellant indicated to this court that perhaps he objected to the terms of the injunction because it might conceivably prohibit actions which he himself planned to institute. He did not state that he would institute any action or actions or say what would be the subject matter of his suit or suits if he saw fit to bring any. But he hinted broadly and vaguely that he proposed to recapture substantial sums for himself and for the other stockholders of Electric Bond and Share Company by litigation. It is difficult indeed to frame an injunction in nubibus and it would be unfair to require the court below to shape its injunction so as to meet objections which the appellant sees fit not to assert with greater clarity.
The order appealed from will be affirmed.
“In accordance with such rules and regulations or order as the Commission may deem necessary or appropriate in the public interest or for the protection of investors or consumers, any registered holding company or any subsidiary company of a registered holding company may, at any time after January 1, 1936, submit a plan to the Commission for the divestment of control, securities, or other assets, or for other action by such company or any subsidiary company thereof for the purpose of enabling such company or any subsidiary company thereof to comply with the provisions of subsection (b). If, after notice and opportunity for hearing, the Commission shall find such plan, as submitted or as modified, necessary to effectuate the provisions of subsection (b) and fair and equitable to the persons affected by such plan, the Commission shall make an order approving such plan; and the Commission, at the request of the company, may apply to a court, in accordance with the provisions of subsection, (f) of section 79r of this chapter, to enforce and carry out the terms and provisions of such plan. If, upon any such application, the court, after notice and opportunity for hearing, shali approve such plan as fair and eq-uitabie and as appropriate to effectuate the provisions of this section, the court as a court of equity may, to such extent as it deems necessary for the purpose of carrying outithe terms and provisions of such plan, take exclusive jurisdiction and possession of the company or companies and the assets thereof, wherever located * * 15 U.S.C.A. § 79k(e). (Emphasis supplied.)
The court released jurisdiction over the assets of United Gas soon after consummation of the plan on November 27, 1944.
The provisions of Section 19 of the Act of October 15, 1914, 28 U.S.C.A. § 383, are incorporated in Rule 65 of the Federal Rules of Civil Procedure, 28 U. S.C.A. following section 723c.
Concurrence Opinion
(concurring).
While I agree with the conclusions reached by the majority, I deem it desirable to add a comment concerning the scope of the injunction granted by the lower court. It is apparent that appellant’s real objection to this injunction stems from uncertainty on his part as to what it forbids. Confronted with much the same situation, the Circuit Court of Appeals for the First Circuit, in Petition of Blatchley, 1946, 157 F.2d 894 at page 898, said: “It is not at all clear to us that the injunction in its present terms would forbid the commencement or prosecution of the sort of suits which Blatchley has in mind. However that may be, Blatch-ley has not yet asked the district court for either a clarification or modification of its injunction. If the injunction in its present form does forbid the institution of stockholders’ suits seeking an accounting from the alleged wrongdoers, the district court is at liberty to make an appropriate modification of the injunction.” This excerpt is all the more pertinent when it is noted that the injunction in Petition of Blatchley, supra, restrained any action interfering with “these proceedings," whereas the injunction in the instant case forbids any action interfering with “these transactions.”
Recognizing the difficulty facing individuals affected by injunctions of somewhat comprehensive nature, the Supreme Court has stated: “If defendants enter upon transactions which raise doubts as to the applicability of the injunction, they may
Review of the scope of this injunction, in my opinion, is premature, until appellant follows the course of action outlined above.