In proceedings for reorganization under Section 77B of the Bankruptcy Act, the debtor held real property valued at $245,025, while outstanding against the property there were first mortgage bonds of $445,000, second mortgage notes for $40,250 and a third mortgage note for $27,000. The court confirmed a plan which made no provision for junior lienors or stockholders, and to which they had not given their consent. On certiorari, granted by the Supreme Court, it was held, that since there was no equity in the property above the first mortgage, the claims of the junior lienors and stockholders had no value. Therefore they were in no way deprived of property without due process by a plan, confirmed without their consent, which made no provision for them. Nor was the statute violated, for the protection of claims provided for is only "for the realization of the value of the interests" affected. In re 620 Church St. Bldg., (U. S. 1936) 57 S. Ct. 88.
Erwin S. Simon,
BANKRUPTCY - CORPORATE REORGANIZATION - PLAN - ADEQUATE PROTECTION OF CLAIMS - DUE PROCESS,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol35/iss6/11