In 1935 the International Paper and Power Company filed an application with the Securities and Exchange Commission to secure permanent exemption from the provisions of the Public Utility Holding Company Act of 1935. While this application was pending, the company formed a plan for recapitalization of its stock, and applied to the commission for an order validating the plan. The report of the commission on this plan was approved by the requisite number of shareholders of the company, whereupon the commission entered an order purporting to exempt from the provisions of the act the stock and the warrants for stock to be issued under the plan. The commission's order was reversed by the Circuit Court of Appeals for the First Circuit on the theory that, until the company registered under the act, the commission could not issue an order concerning the validity of the plan of recapitalization. The commission then granted the company complete exemption from the terms of the act according to the original application; and dismissed a petition of a class of preferred stockholders to have the commission issue an order either allowing the recapitalization plan to become effective on more favorable conditions to the class, or determining what "restitution" the class might have because of reliance on the commission's original orders regarding the plan. On review of this latter order of dismissal before the Circuit Court of Appeals for the Second Circuit, held, that the first circuit had exclusive jurisdiction to construe its mandate regarding the commission's order on the recapitalization plan; but assuming that the second circuit had jurisdiction over the order sought to be reviewed, the question of the commission's jurisdiction to pass on the plan of recapitalization in any way was rendered moot by the commission's order exempting the company completely from the provisions of the act. Morris v. Securities and Exchange Commission, (C. C. A. 2d, 1941) n6 F. (2d) 896.
SECURITIES LEGISLATION - PUBLIC UTILITY HOLDING COMPANY ACT JURISDICTION OF THE SECURITIES AND EXCHANGE COMMISSION,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol39/iss8/19