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General Stores Corp. v. Shlensky, 350 U.S. 462 (1956)
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General SummaryThis case is from a collection containing the full text of over 16,000 Supreme Court cases from 1793 to the present. The body of Supreme Court decisions are, effectively, the final interpretation of the Constitution. Only an amendment to the Constitution can permanently overturn an interpretation and this has happened only four times in American history.
General Stores Corp. v. Shlensky, 350 U.S. 462 (1956)
General Stores Corp. v. Shlensky No. 170 Argued January 18, 1956 Decided March 26, 1956 350 U.S. 462
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
Syllabus
Petitioner instituted proceedings under Chapter XI of the Bankruptcy Act, alleging inability to pay its debts as they matured. It had been converted from an operating company to a holding company with the shares of the subsidiaries pledged to creditors; and it had heavy short-term loans. It had no publicly held debts, but had over 2,000,000 shares of common stock listed on the American Stock Exchange and held by over 7,000 shareholders. A shareholder owning 3,000 shares, and the Securities and Exchange Commission, moved that the proceedings be dismissed unless the petition be amended to comply with Chapter X of the Bankruptcy Act.
Held: in deciding that proceedings under Chapter X, rather than Chapter XI, were appropriate, the discretion exercised by the District Court and the Court of Appeals did not transcend allowable bounds, and their judgment is affirmed. Pp. 463-468.
(a) In determining whether Chapter X or Chapter XI affords the appropriate remedy, the question is whether, on the facts of the case, the formulation of a plan under the auspices of disinterested trustees, as assured by Chapter X and the other protective provisions of that Chapter, would better serve the public and private interests concerned, including those of the debtor, than the simpler arrangement under Chapter XI. Pp. 465-466.
(b) The essential difference in the choice between Chapter X and Chapter XI is not between the small company and the large company, nor in the nature of the capital structure, but between the needs to be served. Pp. 466-467.
(c) The record in this case supports the view of the two lower courts that petitioner may need a more pervasive reorganization than is possible under Chapter XI. Pp. 467-468.
222 F.2d 234 affirmed.
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Chicago: U.S. Supreme Court, "Syllabus," General Stores Corp. v. Shlensky, 350 U.S. 462 (1956) in 350 U.S. 462 350 U.S. 463. Original Sources, accessed November 22, 2024, http://originalsources.com/Document.aspx?DocID=DSKXQXI7AMTZTIT.
MLA: U.S. Supreme Court. "Syllabus." General Stores Corp. v. Shlensky, 350 U.S. 462 (1956), in 350 U.S. 462, page 350 U.S. 463. Original Sources. 22 Nov. 2024. http://originalsources.com/Document.aspx?DocID=DSKXQXI7AMTZTIT.
Harvard: U.S. Supreme Court, 'Syllabus' in General Stores Corp. v. Shlensky, 350 U.S. 462 (1956). cited in 1956, 350 U.S. 462, pp.350 U.S. 463. Original Sources, retrieved 22 November 2024, from http://originalsources.com/Document.aspx?DocID=DSKXQXI7AMTZTIT.
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