CORPORATE REORGANIZATION UNDER SECTION 77B OF THE BANKRUPTCY ACT

Authors

Jacob J. Kaplan, Of the Boston Bar

Abstract

In the closing hours of its legislative life the 73rd Congress adopted the amendment to the Bankruptcy Act providing for the reorganization of corporations, and designated as Section 77B. The Act was approved. by the President on June 7, 1934. The statute had had a long and checkered history in Congress. Such legislation barely failed of enactment in the preceding session when Congress first gave to natural persons availing themselves of bankruptcy procedure the right to call themselves "debtors" rather than "bankrupts," and provided a substantially similar method of reorganization for railroad corporations engaged in interstate commerce. The present statute nearly foundered several times during the session of 1934; the principal difficulty was the matter of the participation of landlords' claims in reorganization and in liquidation. The statute was saved from destruction only by a compromise on this question. As it finally emerged, however, it represents an important forward step in the solution of vexing and intricate problems of corporate reorganizations; it brushes aside fictions and disguises under which lawyers have heretofore proceeded in this field, and introduces by legislative fiat a welcome air of reality and substance.

Recommended Citation

Jacob J. Kaplan, CORPORATE REORGANIZATION UNDER SECTION 77B OF THE BANKRUPTCY ACT, 33 Mich. L. Rev. 77 (1934).
Available at: https://repository.law.umich.edu/mlr/vol33/iss1/4