In re Western Pac. R. Co., 26591-S.

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
Citation34 F. Supp. 493
Docket NumberNo. 26591-S.,26591-S.
PartiesIn re WESTERN PAC. R. CO.
Decision Date15 August 1940

Pierce & Greer, of New York City, and C. W. Dooling, of San Francisco, Cal., for debtor.

Cravath, de Gersdorff, Swaine & Wood, of New York City, and Morrison, Hohfeld, Foerster, Shuman & Clark, of San Francisco, Cal., for Institutional Bondholders Committee.

Pillsbury, Madison & Sutro, of San Francisco, Cal., and Davies, Auerbach, Cornell & Hardy, of New York City, for Irving Trust Co., substituted trustee under general and refunding mortgage.

Whitman, Ransom, Coulson & Goetz, of New York City, and Garret W. McEnerney and Andrew F. Burke, both of San Francisco, Cal., for A. C. James & Co.

C. M. Clay and Florence de Hass Dembitz, both of Washington, D. C., and Brobeck, Phleger & Harrison, of San Francisco, Cal., for Reconstruction Finance Corporation.

Edward G. Buckland, of New Haven, Conn., for Railroad Credit Corporation.

Sloss, Turner & Finney, of San Francisco, Cal., for Western Pac. R. Co.

Leroy R. Goodrich, of Oakland, Cal., for Western Realty Co.

Chickering & Gregory, of San Francisco, Cal., and Milbank, Tweed & Hope, of New York City, for Crocker First Nat. Bank of San Francisco and Samuel Armstrong, trustee of first mortgage.

Pillsbury, Madison & Sutro, of San Francisco, Cal., and Milbank, Tweed & Hope, of New York City, for Chase Nat. Bank of City of New York.

ST. SURE, District Judge.

This is a proceeding under section 77 of the Bankruptcy Act1 for the reorganization of the Western Pacific Railroad Company.

On August 2, 1935, the Debtor filed a petition stating that it was unable to meet its debts as they matured and that it desired to effect a plan of reorganization. The court approved the petition and authorized the Debtor, pending further order of the court, to continue in possession of and operate and maintain the railroad and its properties, and to manage and conduct its business as a railroad company. Trustees were appointed and ratified by the Interstate Commerce Commission. "The judicial functions of the bankruptcy court and the administrative functions of the Commission work cooperatively in reorganizations."2

Thereafter, all necessary legal steps required by the Act were taken, and on February 8, 1936, Debtor filed a plan of reorganization with the Commission. In addition, plans were filed on behalf of the Institutional Bondholders Committee, and on behalf of A. C. James Co. On August 1, 1937, the Bureau of Finance of the Interstate Commerce Commission issued a proposed report containing a recommended plan of reorganization to which exceptions were filed by the Debtor, the Institutional Bondholders Committee, the First Mortgage Trustees, the Refunding Mortgage Trustee, A. C. James Co., Reconstruction Finance Corporation, and the Railroad Credit Corporation. Hearings were had before the Commission, and on October 10, 1938, the Commission issued its original report and order approving a plan of reorganization.3

On December 9, 1938, the Debtor, the Institutional Bondholders Committee, the Refunding Mortgage Trustee, A. C. James Co., Reconstruction Finance Corporation and the Railroad Credit Corporation filed their separate petitions with the Commission for rehearing and modification of the original report and order and the plan of reorganization approved therein. Answers to certain of said petitions were filed by the First Mortgage Trustees and the Railroad Credit Corporation. Proposals for modification of the Commission's plan were attached to or contained in such petitions. A rehearing on the basis of these petitions was granted by order of the Commission entered December 30, 1938.

On June 21, 1939, the Commission issued its "Report and Order on Further Consideration"4 (hereinafter referred to as the supplemental report and order) approving a modified plan of reorganization (hereinabove and hereinafter referred to as the Commission plan). By its report and order of June 21, 1939, the Commission modified the original report and revoked and rescinded the original order.

On or about August 1, 1939, and prior to the certifying to the court of the Commission plan and the record before the Commission, the Debtor filed a petition for rehearing and modification of the Commission plan. Answers thereto were filed by certain parties. Said petition was denied by the Commission by a report and order entered September 19, 1939.

Pursuant to the requirements of subsection d of section 77, the Commission on or about September 28, 1939, certified to the court the Commission plan together with a transcript of the proceedings before it and a copy of the supplemental report and order approving the plan, which were filed in this proceeding on October 3, 5, and 6, 1939.

On November 8, 1939, the court, pursuant to the provisions of subsection e and of clause 8 of subsection c of section 77, entered its order fixing the time within which objections to the Commission plan and claims for equitable treatment might be filed herein, fixing the time within which applications might be filed for expenses and fees incident to the reorganization, and fixing December 8, 1939, as the date for the filing of such objections and claims for equitable treatment and petitions for an allowance for compensation for services rendered or for expenses (including reasonable attorneys' fees) incurred, in connection with the proceeding and plan of reorganization up to and including October 31, 1939, and providing for the giving of due notice by the Debtor's trustees to creditors and stockholders, or their representatives, and all other parties in interest.

Petitions for intervention were granted to several parties in interest, and pursuant to the order of November 8, 1939, objections to the Commission plan and claims for equitable treatment were filed by or on behalf of the Debtor, the Institutional Bondholders Committee, the Refunding Mortgage Trustee, A. C. James Co., Reconstruction Finance Corporation, the Railroad Credit Corporation, the Western Pacific Railroad Corporation, and the Western Realty Company.

On December 18, 1939, the court, pursuant to Rule 16 of Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, held a pre-trial conference of the attorneys for the parties in interest. At the conference the parties agreed upon substantially all the facts upon which depend the decision of the issues raised by the objections and claims for equitable treatment, and accordingly, on December 20, 1939, filed a "Stipulation as to Facts Not in Dispute." The parties failed to agree upon a stipulation as to the issues. On December 21, 1939, the court made its order fixing January 22, 1940, as the time for hearing objections to the plan of reorganization. On December 29, 1939, the court made its order reciting the action taken at the pre-trial conference and ordered "that the issues for trial of said hearing on January 22, 1940, shall be the issues raised and presented by said objections to said plan of reorganization and by said claims for equitable treatment."

The Debtor owns or operates 1,207.51 miles of standard gauge railroad. A main line extends eastward 924.17 miles from Oakland, California, to Salt Lake City, Utah. The Northern California Extension extends northward 111.81 miles from Keddie to Bieber, California, with operating rights from Bieber to Hambone, California — 46.38 miles — over the Great Northern Railway. In addition to said main line mileage and the Northern California Extension, the Debtor has approximately 131.66 miles of branch line mileage springing from the Oakland-Salt Lake City line.

Reference is hereby made to the original report and order of the Commission5 for more detailed descriptions of the property owned and controlled by the Debtor, its corporate and financial history, financial structure, traffic and revenue, earnings available for charges, classes of creditors and stockholders, and the proposed plans of reorganization. Such reference is made for the purpose of shortening this opinion and because the data contained in the Commission's original report is in the main correct. However, it is to be understood, unless otherwise stated herein, that facts and figures stated in this opinion, and upon which it is based, are from the "Stipulation as to Facts Not in Dispute," the record certified to the court by the Commission, and additional proof offered in open court.

The essential, undisputed facts with respect to the Commission plan necessary for the court's determination of the issues are set forth in the following summarization, taken from the brief of the Institutional Bondholders Committee, because concisely stated. The Commission plan, which by its terms is to be made effective as of January 1, 1939, provides the following capital structure for the reorganized company:

                                                                                                  Interest
                                                                                                  Dividends
                                                                                                  or Other
                                                                                   Presently      Income
                                      Title of Issue                               Issued         Charges
                Undisturbed Existing Equipment Trusts, Baldwin Lease and
                 Pullman Contract ...............................................  $ 2,750,050    $   94,202
                First Mortgage 4% Bonds, Series A, due January 1, 1974 ..........   10,000,000       400,000
                                                                                                  __________
                        Total Annual Fixed Charges ..............................                 $  494,202
                Mandatory Capital Fund ..........................................                    500,000
                Income Mortgage 4½% Bonds, Series A, due January 1, 2014
                 Interest cumulative to 13½%, otherwise noncumulative ....   21,219,075
...

To continue reading

Request your trial
7 cases
  • Western Pac. RR Corp. v. Western Pac. R. Co.
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • 9 Julio 1952
    ...C. C. 409) a proposed plan of reorganization, which was thereafter submitted to and approved by the district court in 1940. In re Western Pac. R. Co., 34 F.Supp. 493. In the plan it was determined, inter alia, that the capital stock of the subsidiary, owned by Corporation, was without equit......
  • Ecker v. Western Pac Corporation Crocker First Nat Bank of San Francisco v. Same Western Pac Co v. Ecker Reconstruction Finance Corporation v. Western Pac Corporation Irving Trust Co v. Crocker First Nat Bank of San Francisco
    • United States
    • U.S. Supreme Court
    • 15 Marzo 1943
    ...101. The plan and a transcript of the proceedings before the Commission were duly certified to the District Court. Re Western Pac. R. Co., D.C., 34 F.Supp. 493, 495. The plan in complete form and a detailed discussion of the history, property and business prospects of the debtor appears in ......
  • Matter of All Products Co.
    • United States
    • U.S. Bankruptcy Court — Eastern District of Michigan
    • 29 Agosto 1983
    ...In 1939, the Interstate Commerce Commission approved a plan of reorganization, which was approved by the court In re Western Pacific Railroad Co., 34 F.Supp. 493 (N.D.Cal.1940). Since the subsidiary was insolvent, the parent's stock was worthless and, therefore, the plan did not provide for......
  • In re Western Pac. R. Co., 9714.
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • 16 Febrero 1942
    ...petitions for rehearing of the Irving Trust Company, as trustee, and Western Pacific Railroad Company for other relief are denied. 1 34 F.Supp. 493, 505-509. 2 233 I.C.C. 409, 3 9 Cir., 122 F.2d 807. 4 As of January 1, 1939, the effective date of the plan. 5 Irving Trust Company succeeded T......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT