In proceedings under Section 77 B of the Bankruptcy Act for the reorganization of the Philadelphia Rapid Transit Company, a special master was appointed by the court, to ascertain and classify the creditors. Interested parties petitioned the court to instruct the master to require the "underliers," the class of creditors composed of the former owners of the various car lines taken over by the debtor Transit Company, to produce their books and papers to establish the fair amount of their claims, asserting that their properties were acquired by the debtor at grossly inflated prices; that their real value did not exceed $30,000,000, as against the $87,000,000 claimed, and that the "underliers" will have an unfair voting weight in the approval or rejection of a plan of reorganization if such inflated claims are allowed. Held, that this question was being raised prematurely; that the consideration before the master was simply whether the corporation had a. defense against the claims as presented. If not, the claims should be allowed for voting purposes only, further consideration of allowing the claims in the reorganization being reserved for the court upon consideration of the plan. In re Philadelphia Rapid Transit Co., (D. C. Pa. 1935) 11 F. Supp. 865.
BANKRUPTCY - REORGANIZATION UNDER SECTION 77 B - DETERMINATION OF AMOUNT OF CLAIMS FOR PURPOSE OF VOTING ON APPROVAL OF REORGANIZATION PLAN,
Mich. L. Rev.
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