*1 MAGRUDER, Judge, Before Chief COMMONWEALTH OF MASSACHU- HARTIGAN, WOODBURY and Circuit SETTS v. THOMPSON. Judges. In PLYMOLD re CORP. MAGRUDER, Judge. Chief by appeal This the Commonwealth from an order of Massachusetts Appeals, Court of United States for Dis- District Court United States First Circuit. affirming trict of an order Massachusetts June 1951. stopped of a Referee the running of interest on a tax claim of the Commonwealth as of the date filing petition briefly. essential facts can be stated petition in involuntary was against debtor, Plymold filed Corpora- tion, August 23, on Thereupon, 1947. with- adjudication, proceedings upon pe- out stayed, tition were later that month the petition debtor filed for XI of the Act of amended Chandler seq. Delay ensued necessity occasioned set- tling re-negotiation claim of the United States, plan but an amended ment was January filed on day. was things allowed the next All necessary complete the consummation of having complied amended been Woodbury, Judge, dissented. with on was June days confirmed three later on The Commonwealth of Massachusetts seasonably filed against its claim Employment contributions under its Se- curity Law, St.1941, c. statutory claimed interest thereon at the per rate of annum down to the date of 6% payment. claim, The Referee allowed the but refused to include interest after petition date of the filing of August doing 1947. In so he upon City relied York New Harry Levowich, Counsel, Division of and the court below affirmed relying Employment Security, Boston, Mass. upon the same case. (Francis Kelly, Atty. Gen., E. of Massa chusetts, Brennan, Chief Coun In our the order should af- John Boston, sel, Employment Division of Security, firmed for the reasons stated in United ss. with him appellant. on brief), for States Ma v. General Engineering and Manu- (Friedman, Atherton, Lee Friedman M. facturing Co., Cir., 1951, 188 F.2d 80. Turner, Boston, &King Mass. with him square on This case is a holding point on the brief), appellee. by appellant and, raised in the case at bar

11 ** 11 306(1), unsecured debts by Judge Sanborn think, § the we eventual- the end that 706(1), to City of U.S.C.A. of reasoning § the clear that makes and 328, satisfy his creditors ly can 1949, 336 U.S. New York his busi- unsupervised of control 710, resume involved 554, 93 L.Ed. 69 S.Ct. bury a to bankruptcy is equally The end ness. of bankruptcy is proceeding, straight a Chapter XI business; the end an dead applicable proceeding to one. Bankruptcy arrangement is to cure a sick Chapter XI of the ment under present for- contrary would Act. the of bankruptcy the interest Thus in in the admin- practical difficulties midable wiped involved is property owner the in Chapter of XI. istration out, proceedings arrangement whereas in would Chapter is Indeed it under it not. XI is af- The the District Court order of even interest cannot seem that the owner’s firmed. Co., be U. affected. S. E. C. v. S. 1044, 1940, 84 452, 310 60 S.Ct. 434, U.S. WOODBURY, Judge (dissent- deci- L.Ed. 1293. This difference under ing). Supreme of the to be mentioned sions Court definitely, Certainly Saper the case holds presently require that a seems to me to authoritatively, of that and course bankruptcy distinction be drawn between like claims tax claims are now other proceedings far con- arrangement and so as they the in that bear interest after do not present cerns interest like the on debts holding is of But date that of under 64 the § controlling although not here 874, 104, 11 U.S.C.A. § petition in proceeding this started with a given priority, are and are entitled to involuntary promptly bankruptcy it was paid bankrupt in full in ad- out of estates Chapter arrangement XI converted into payment of vance the of dividends to cred- proceeding which it to be there- continued itors. And, many of tech- although after. the procedures Although recognize I niques administrative and of are involved, proceedings difficulties it me that to arrangement used in under seems to XI, Chapter remains claim nevertheless the fact Commonwealth’s would proceedings bankruptcy have run afoul of the so called “absolute that in priority” rule, entirely purpose different and from sometimes referred to as the aim principle”, “fixed proceedings for an enunciated the Su- preme pur- in Chapter Court Louisville Trust XI. has for its Co. Lou- isville, Ry. Co., 1899, pose orderly, expeditious and N. & economi- C. U.S. 674, liquidation bankrupt’s applied 43 L.Ed. cal of the in available assets, Railway Boyd, Pacific proceeds Northern and the distribution of Co. v. equitable basis they go as far as will S.Ct. 57 L.Ed. firmly creditors, to the to the established in end creditors Case v. Los may possible Lumber realize as from Products much estate, bankrupt may and the be freed U.S. from 110. Ac- cording to or principle, his burden of accumulated that he rule debt so this “the stock- in holder’s can start anew XI interest in the property business. is subordin- rights creditors; proceedings, first, ate of on the other to of hand, purpose liq- creditors”, then of unsecured for their not the secured and have parties “any arrangement a business but its financial re- of the uidation of purpose rights of an arrange- subordinate habilitation. which the interests permit attempted to the debtor to continue are to be ment first of the stockholders prior management expense his of rights business under secured at court, put or it creditors comes supervision to class within either Louisville temporarily management judicial a re- denunciation.” Trust under the Ry. Co., trustee, A. & a Co. v. Louisville N. C. su- ceiver or and second establish settlement, satisfaction, page 684, pra, 174 or “for the * * principle payment 830, 43 L.Ed. 1130. This or rule of the time of extension is included equitable”

“fair as words art used 77B, Chap-

in old now *3 X, seq., ter Case v. Co., supra, Los Lumber Products pages page U.S. at at parity rea- L.Ed. clear also

soning it is included in the 366(3) same

XI. 52 766(3). 11 U.S.C.A. § supra,

See S. E. v. C. U. S. page Hence,

L.Ed. the fact priority interest entitled to the same principal, Consolidated Rock Products Bois,

Co. Du cases cited L.Ed.

it seems to me that to

Commonwealth’s tax claim while permitting

the debtor to ownership continue in

its property and the control its business

would be pri- to subordinate the right of a

ority creditor to the interest owners business, stockholders, in this case run thus counter the “ab- priority”

solute rule.

NATIONAL LABOR RELATIONS BOARD WESTEX BOOT & SHOE CO. Appeals States Court of

United Fifth Circuit. 25, 1951. Alexandre, Atty.,

Maurice A. Norman Somers, Counsel, Asst. Gen. David Findling, Counsel, Associate Gen. National C., Board, Washington, Labor- Relations D. petitioner.