Guaranty Trust Co. v. Williamsport Wire Rope Co., 959.

• Decision Date: 29 December 1952
• Docket Number: No. 959.,959.
• Citation: 107 F. Supp. 762
• Parties: GUARANTY TRUST CO. OF NEW YORK v. WILLIAMSPORT WIRE ROPE CO. GEHRON et al. v. BETHLEHEM STEEL CO.
• Court: U.S. District Court — Middle District of Pennsylvania

107 F. Supp. 762

GUARANTY TRUST CO. OF NEW YORK v. WILLIAMSPORT WIRE ROPE CO.

GEHRON et al. v. BETHLEHEM STEEL CO.

No. 959.

United States District Court M. D. Pennsylvania.

December 29, 1952.

Charles Bidelspacher, Jr., Charles F. Bidelspacher, Lester L. Greevy, Daniel F. Knittle, Williamsport, Pa., for petitioners.

Robert T. McCracken, Philadelphia, Pa., William J. Fitzgerald (of Fitzgerald, Kennedy, Eckersley & O'Brien), Scranton, Pa., for respondent.

WATSON, Chief Judge.

This is a suit by present and former shareholders and former bondholders of the Williamsport Wire Rope Company to set aside the sale of the assets of the Williamsport Wire Rope Company to the respondent, Bethlehem Steel Company, in a receivership and foreclosure proceeding. The matter was referred to a Special Master who recommended, inter alia, that the decrees of foreclosure and sale be vacated because of fraud. Respondent filed motions for a new trial and to amend the findings of the Special Master which were confirmed and adopted by this Court on October 14, 1952, and reported in 107 F.Supp. 759.

The evidence in these proceedings supports the conclusion of the Special Master that the fraudulent acts and conduct of court-appointed officials in and in connection with the Williamsport receivership and foreclosure proceedings, to which the Special Master made particular reference in his Report, were such as to require that the sale of the Williamsport properties to Bethlehem Steel Company be set aside, leaving for future disposition, after further hearings on valuation and other issues, the equities in such properties of the several interested parties. While the above motions were pending and undetermined, the respondent and counsel for the petitioners informed the Court that they were in full agreement that though such evidence was sufficient to set aside the sale because of fraud, it does not support the conclusion that Bethlehem Steel Company or any of its agents or representatives participated in any fraud, but that Bethlehem Steel Company was an innocent victim of circumstances over which it had no control. The Court, after a re-review of the evidence, and in light of such agreement by counsel for the petitioners, finds that though the evidence of fraud was sufficient to set aside the sale, it does not support the conclusion that Bethlehem Steel Company or any of its agents or representatives participated in the fraud, but rather that Bethlehem Steel Company was an innocent victim of circumstances over which it had no control.

While the above-mentioned motions were pending and undetermined, the parties also reached an agreement to compromise and settle the litigation. This being a class action, the offer of settlement was submitted to the Court for approval, and pursuant to Rule 23 of the Federal Rules of Civil Procedure, 28 U.S.C., an order was made directing that a hearing be held before this Court upon the fairness and reasonableness of said offer of settlement, and directing that notice of such hearing, in the form prescribed by the Court, be given to all stockholders of Williamsport Wire Rope Company. Proofs of publication of said notice were filed and a hearing was held, and the Court afforded all those appearing a full opportunity to be heard in respect of said offer of settlement. After due consideration thereof, this Court is of the opinion that the offer of settlement made by Bethlehem Steel Company is fair and reasonable and that the approval thereof is in the best interests of all persons who retained their ownership of stock certificates of Williamsport Wire Rope Company and those persons who sold their shares of stock of said Company to Bethlehem Steel Company from and after July, 1936.

An appropriate order, judgment, and decree will be filed herewith, and an order appointing a Special Master for distribution purposes will be filed forthwith.

ORDER, JUDGMENT and DECREE

NOW, December 29, 1952, this cause having come on further to be heard before this Court upon (a) motions of respondent Bethlehem Steel Company, filed October 24, 1952, to amend the findings of fact, conclusions of law and order of this Court entered herein on October 14, 1952, and to set...