Young v. Higbee Co., 324 U.S. 204 (1945)

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Young v. Higbee Co.

No. 342

Argued February 1, 1945
Decided February 26, 1945
324 U.S. 204

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Syllabus

From a decree confirming a plan of reorganization under Chapter X of the Bankruptcy Act, an appeal was taken by P and B, holders of preferred stock. The appeal was based largely upon objections to allowances made to junior claimants, and, had it been successful, the preferred stockholders as a class would have benefited. For a consideration paid to them, P and B transferred their stock to junior claimants and agreed to abandon the appeal. Petitioner, also a holder of preferred stock, sought to intervene and prosecute the appeal. The Circuit Court of Appeals denied leave and dismissed the appeal. Petitioner thereupon filed in the bankruptcy court a petition, on behalf of himself and all other preferred stockholders, seeking an accounting by P and B to the debtor or to the preferred stockholders, for the excess of the amount which they had received over the fair value of their stock.

Held:

1. The Circuit Court of Appeals’ dismissal of the appeal over petitioner’s attempt to intervene did not bar petitioner’s subsequent petition for an accounting. P. 208.

2. The fruit of the appeal by P and B belongs to all of the preferred stockholders. P. 213.

3. The bankruptcy court has jurisdiction to award the relief prayed. P. 214.

4. The alleged improper motive of the petitioner does not warrant denial of the prayer for relief, which was made on behalf of all the stockholders. P. 214.

142 F.2d 1004, reversed.

Certiorari, 323 U.S. 689, to review a judgment which affirmed the bankruptcy court’s dismissal of an application for relief.