In re Higbee Co.
| Citation | 164 F.2d 426 |
| Decision Date | 02 December 1947 |
| Docket Number | No. 10337.,10337. |
| Parties | In re HIGBEE CO. YOUNG v. MURPHY et al. |
| Court | United States Courts of Appeals. United States Court of Appeals (6th Circuit) |
Robert J. Bulkley and James A. Butler, both of Cleveland, Ohio (Bulkley, Butler & Pillen, Robert J. Bulkley, James A. Butler and Robert W. Purcell, all of Cleveland, Ohio, on the brief), for appellant.
L. C. Wycoff and Dwight B. Buss, both of Cleveland, Ohio (McKeehan, Merrick, Arter & Stewart, Charles K. Arter, L. C. Wykoff, Kingsley A. Taft, Baker, Hostetler & Patterson and Dwight B. Buss, all of Cleveland, Ohio, on the brief), for appellees.
Before HICKS, MARTIN and MILLER, Circuit Judges.
Our appellate jurisdiction is invoked again in the matter of the reorganization of The Higbee Company; this time on the appeal of Robert R. Young from the denial by the district court of his petition for an accounting on the part of John P. Murphy and the Executors of the Estate of Charles L. Bradley. Young's petition was filed on May 19, 1945, following the promulgation, on February 26, 1945, of the opinion of the Supreme Court in Young v. Higbee Co., 324 U.S. 204, 65 S.Ct. 594, 89 L.Ed. 890, reversing the opinion of this court reported in 6 Cir., 142 F.2d 1004.
The Supreme Court held that Young was not estopped from prosecuting his petition for an accounting by Potts and Boag to the preferred stockholders for the money, in excess of their own interest as stockholders, received by them for dismissal of their appeal and sale of their stock to Bradley and Murphy. The settlement and dismissal of the suit was said not to alter the rights of all preferred stockholders to distribution of the fruits of the settlement.
It was held, further, that the district court had jurisdiction to order an accounting touching the funds in dispute, both because of its express reservation and because of the provisions of section 222 of the Bankruptcy Act, 11 U.S.C.A. § 622, giving the judge power, under the conditions confronted, to alter and modify a reorganization plan even after confirmation. As we construe its opinion, the Supreme Court considered as final, just as this court did, the dismissal of the appeal from the decree of the district court confirming the plan.
The petition of Young presently under consideration asserts that Murphy and the Bradley estate "should account to the Higbee Company for the benefit of its other stockholders for the profit which they derived, or sought to derive, in the form of the new Higbee securities, from their unlawful purchase of the Potts and Boag stock." It is obvious that to grant the relief sought by Young would require the setting aside of the plan of reorganization of the Higbee Company, confirmed by the district court, whose judgment was affirmed on appeal by this court. On December 1, 1942, the district court entered a final decree discharging the debtor, The Higbee Company; terminating the rights and interests of its stockholders, except as provided in the amended reorganization plan confirmed March 12, 1942; and closing the estate of the debtor, except only as to matters in respect to which jurisdiction was retained.
The reservation of jurisdiction concerning Young's application gave him the right, which he exercised, to proceed before the master in his effort to hold liable Bradley and Murphy, as well as Potts and Boag, for the money profit resulting from the sale of their stock by Potts and Boag to Bradley and Murphy for $115,000. Young already had sought unsuccessfully to deprive Bradley and Murphy of the ownership of the junior indebtedness and common stock of the debtor; for the special master, in his ad interim report filed September 10, 1942, rejecting the contentions of Young and his associates, recommended that the claims of Bradley and Murphy to the equitable and legal ownership of the Higbee securities should be allowed; and the objections of Young and his associates to the master's report were subsequently disallowed.
The claims of Bradley and Murphy to the Higbee securities were allowed and sustained by decree of the district court entered March 16, 1943. Bradley and Murphy were decreed to be the legal and equitable owners of the new note of The Higbee Company in the amount of $600,000, and of approximately 14,550 shares of the new common stock of the Higbee Company, subject only to the pledge thereof to the National City Bank of Cleveland as security for the payment of their note. The claims of Young and his associates to the Higbee securities in controversy and to the new note and new common stock were expressly "disallowed and dismissed."
Young and his associate, Kirby, appealed from the final judgment entered in this case on March 16, 1943. On April 21, 1944, this court affirmed that judgment. See Young v. Bradley, 6 Cir., 142 F.2d 658. It would seem to be unnecessary and inappropriate to repeat here what was said in that opinion. As we see...
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... ... " Miller v. Meinhard-Commercial Corporation, 462 F.2d 358, 360 (5th Cir.1972) (citations omitted). See also, In re Higbee Company, 164 F.2d 426 (6th Cir.1947), cert. denied, 333 U.S. 863, 68 S.Ct. 745, 92 L.Ed. 1142 (1948); In re Blanton Smith Corporation, 81 B.R. 440 (M.D.Tenn.1987) ... As further support for finding an order of confirmation to be res judicata, 11 U.S.C. § 1141(a) provides: ... Except as ... ...
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