This is another episode in the protracted litigation concerning the reorganization of the Boston & Providence Railroad. Commenced in 1938, the reorganization appears to be drawing to a close with our recent affirmance of the district court’s confirmation of a plan. In re Boston & Providence R.R.,
In 1966 the Development Group and its attorneys submitted petitions for reimbursement and allowances to the district court for the period between January 1954 and June 1966. Acting under § 77(c) (12), the court referred the petitions to the Interstate Commerce Commission for determination of maximum limits in accordance with the statute. Extensive hearings were held and a report and order were issued by Jhci" Commission’s examiner in December 1967. The Commission modified the examiner’s decision, generally raising the limiíts' áet, in July 1968. Boston & P.R.R. Corp. Reorganization,
Both the New Haven trustee and Attorney Hyman contend that various findings by the Commission are unsupported by substantial evidence. We think, however, that they cannot be permitted to challenge the decision on that ground.
The Supreme Court said long ago that a district court, operating under § 77(c) (12), is to act on the basis of the Commission’s report without “a hearing
de novo
on the issue of the reasonable worth of the services rendered or the propriety of the expenses incurred, or a reappraisal by the court of the facts.” Reconstruction Finance Corp. v. Bankers Trust Co.,
This conclusion is supported by the practice in rate-making cases before the Commission. In Mississippi Valley *162 Barge Co. v. United States 3 a carrier sought to enjoin a Commission rate order, but did not introduce in the district court the evidence presented to the Commission. The Court said:
“The settled rule is that the findings of the Commission may not be assailed upon appeal in the absence of the evidence upon which they were made. * * * The appellant did not free itself of this restriction by submitting additional evidence in the form of affidavits by its officers. For all that we can know, the evidence received by the Commission overbore these affidavits or stripped them of significance. The findings in the report being thus accepted as true, there is ' left only the inquiry whether they give support to the conclusion.”292 U.S. at 286 ,54 S.Ct. at 693 .
The same considerations apply with equal force to the case at bar. 4
The balance of the trustee’s case boils down to the contention that the Commission was not justified in finding that the efforts of the Development Group were of benefit to the estate. The only aspect remaining open is whether the Commission’s findings support its conclusion.
We shall not rehearse the history of the reorganization in detail. Suffice it to say that the Commission adopted the examiner’s finding that the efforts of the Group blocked the 1954 plan. That plan would have given the B & P stockholders New Haven debentures valued at $103 for each share of B & P stock. The plan ultimately adopted called for payment of $110 in cash plus a certificate of contingent beneficial interest (CCBI) representing one forty-thousandth of the net proceeds of any windfall resulting from the disposition of B & P assets through 1978. The position of the Development Group throughout its participation in this proceeding has been that the assets of the B & P were undervalued. The Commission adopted the finding that, but for the Group’s insistence, the principle of the CCBI would not have been adopted in the 1966 plan. If the assets are in fact undervalued, a matter which the Commission can judge better than this court, the inclusion of the CCBIs might well produce significant gains for B & P stockholders. Consequently, we think that the Commission, particularly in light of its expertise in these matters, was justified in concluding that efforts of the Development Group were of benefit to the estate. Moreover, it might also well be that the Commission and the court could have concluded that, irritating as the presence of the Development Group might have been, it had served a constructive gadfly purpose in insuring that all possible courses of action which would benefit the estate were explored and that all feasible steps had been taken.
The points left open in No. 7597 are Attorney Hyman’s contentions that legislative efforts and attempts to develop the value of B & P assets are compensable, contrary to the Commission's rulings. He also maintains that the reduction of allowances to the Development Group *163 petitioners because they were pot a protective committee under § 77 (p) is error and that the Commission’s decision does not comply with 5 U.S.C. § 557(c) (3) (A) (Supp. V, 1970).
We need make no determination with regard to the compensability of the Group’s promotional activities. Attorney Hyman made no claim for compensation for such efforts. He now raises the point’ on the theory that the Cominission must have disallowed part of his'.petitio'n on those grounds, as his petition included only a small claim for legislative lei; forts. The difficulty with his position is that the examiner found, contrary jto- appellant’s petition, that his “primary funcll tion, apparently, was in connection with legislation.” It therefore disallowed‘the bulk of his petition not by finding, that* appellant engaged in non-compensable promotional work, but by concluding' i!hat his legislative efforts occupied ¿'greater*' proportion of his time than claimed in the petition. There is no indication1, thaih the action on appellant’s petition' was premised on a finding that he engaged .in, promotional efforts. Therefore,, any ror the’ Commission may have made in holding promotional efforts to be^non^ compensable did not affect appellant’s allowance and we need not consider the point.
The contentions concerning ’ the compensability of legislative efforts and, the reduction of compensation tó''t'he Group petitioners due to the limited interests they represented must be placed., in context. Congress brought the^Comh.. mission into the allowance-setting process in an attempt to correct widespread-, abuses in ,connection with the allowance--' of legal expenses in railroad reorganizations. 5 Collier on Bankruptcy jf77.28g' at 591 (1969). It has major responsibility in the administration of a rather broad statute and, in the light of its considerable expertise in this area, its conclusions as to proper subjects of compensation are to be given great weight by the courts.
See
Red Lion Broadcasting Co. v. FCC,
With the foregoing in mind, we think the contention that services in connection with legislation are compensable is entirely without merit. It has long been the position of the Commission that such activities do not have sufficient “connection with the proceedings' and plan” to warrant recompense out of the debtor’s estate. Wisconsin Central Ry. Reorganization,
The reduction of allowances of the Development Group petitioners because they were not a protective committee authorized under § 77(p) arose out of the issue of duplication of efforts by the Group and the authorized stockholders’ "committee. The examiner held that each made a contribution to the plan and that, the extent that their efforts were duplicative, the allowances of each should be reduced. The Commission increased )the allowance to the members of the stockholders’ committee and counsel for trustee.
*164 It is Attorney Hyman’s position that the Development Group petitioners should not receive less compensation because of the limited interests they represent. The necessary concomitant of that position, however, is that the debt- or’s estate should be charged with the full cost of all services by any group representing stockholder interests, whether under § 77(p) or not, and irrespective of any duplication of efforts.
We cannot accept the notion that the estate should be charged for all duplicative services in these circumstances. The Act provides that “reasonable expenses * * * incurred in connection with the proceedings” are allowable. “Reasonable expenses” has, in large measure, come to mean expenses for services beneficial to the estate. See,
e. g.,
Warren v. Palmer,
supra
n. 5,
The contention that the Commission’s decision does not meet the standard set by § 8(b) of the Administrative Procedure Act, as amended, 5 U.S.C. § 557(c) ’(3) (A) (Supp. V, 1970), rests solely on its alleged failure to state explicitly whether it arrived at the maximum allowance by disallowing a substantial number of the hours claimed by the petition or by reducing the rate of compensation beneath that requested. We think it is without merit.
The purpose of § 8(b) is to provide courts with a basis for judicial review — with “an intelligible statement of the factors considered, issues decided and reasons supporting the * * * conclusions.” City of Lawrence, Mass. v. CAB,
Affirmed.
MEMORANDUM AND ORDER
Attorney Hyman states to us that the Commission did not find that the majority of his time was spent on legislative matters, and that had it done so, it would have found him guilty of misrepresentation, or that, alternatively, we have done so. As we have said, such record as is before us is not at all clear. We do not intend to suggest any misrepresentation on the part of Mr. Hyman, or that either the Commission or we have so found. We merely say that whatever the basis of the Commission’s findings, we see no sufficient reason to disturb them. The petition for rehearing is denied.
Notes
. For the history of this reorganization see In re Boston & Providence R. R.,
. The Development Group is a group of B & P shareholders controlling a small amount of the company’s stock. It is not an authorized protective committee under § 77(p) of the Act, 11 U.S.C. § 205(p) (1964).
.
. Tins disposes of most of the claims made by the trustee and Attorney Ilyman. The trustee’s argument that the district court could make no allowances without an affirmative showing that the Commission’s report was supported by substantial evidence is without merit. Moreover, its contentions that the allowances were excessive because much of the service rendered by the Development Group petitioners was legislative or duplicative of efforts by the stockholders’ committee must fail. Tbe Commission accepted the 'validity of the trustee’s position as a matter of law. Therefore, the only remaining question is whether the evidence supports the amounts of the allowances fixed, which is plainly foreclosed. Attorney Ilyman argues, assuming the validity of the Commission’s rulings on the compensability of legislative and development efforts, that his allowance was fixed at an inadequate level, as he did not devote enough time to such activities to warrant the reduction in his petition. This position is also foreclosed.
. In re New York. N. H. & H. R. R.,
. The Commission found fault with the examiner’s conclusion that the cost of duplicative services should be charged against both the Group and the § 77(p) stockholders’ committee and increased the allowances of the latter. It did not reduce further the Group petitioners’ allowances. Accordingly, the net effect of actions is that the committee’s compensation was unaffected by duplication, while the Group petitioners’ was reduced by part of the cost of duplication.