In re New England Oil-Refining Co.

9 F.2d 344, 1925 U.S. App. LEXIS 2377
CourtCourt of Appeals for the First Circuit
DecidedNovember 16, 1925
DocketNo. 1894
StatusPublished
Cited by5 cases

This text of 9 F.2d 344 (In re New England Oil-Refining Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re New England Oil-Refining Co., 9 F.2d 344, 1925 U.S. App. LEXIS 2377 (1st Cir. 1925).

Opinions

BINGHAM, Circuit Judge.

This is a petition brought against Circuit Judge Anderson, sitting in the District Court, by the New England Oil-Refining Company, a corporation, and the members of a noteholders’ committee, parties to the receivership proceeding of the New England Oil Corporation, to require him to allow an appeal from a decree entered October 7, 1925, on the ground that it was a final and appealable decree, affecting their rights, and that he had refused to allow an appeal.

It appears that on July 14,1922, a creditors’ bill seeking the appointment of receivers for the New England Oil Corporation was brought in the District Court, in which receivers were appointed July 22, 1922, and that the receivership has not yet terminated; that on January 8, 1923, a decree was entered for the proving of claims on or before January 24, 1923; that on January 8, 1923, the individual petitioners, as a committee representing the holders of notes of the New England Oil Corporation, were made parties in the cause upon their petition, as was the N^w England Oil-Refining Company, all of whose stock was owned by the New England Oil Corporation; that on January 22, 1923, the noteholders’ committee filed a petition for the approval of a plan of reorganization, and on February 17, 1923, the court approved the plan and authorized the receivers to participate in it and take all necessary steps to assist in carrying out its provisions; that the plan contemplated, among other things, a [345]*345sale or transfer of the assets of the New England Oil Corporation, which consisted principally of the entire capital stock of the New England Oil-Refining Company and an equity in all the stock of the New England Oil Company, limited, whieh it had pledged, a refinancing of the New England Oil-Refining Company, and the payment of the creditors of the New England Oil Corporation in new preferred and common stock of the Refining Company; that on February 26, 1923, Ernest Wiltsee was allowed to file a petition to intervene and file a petition for late proof of claim, and on June 27, 1923, was adjudicated to be a creditor in the sum of $176,000, which decree was later affirmed by this court; that thereafter, on May 8, 1924, Wiltsee filed a petition asking information as to the reorganization effected by the note-holders’ committee; that upon this application the court ruled that Wiltsee was entitled to such information from the committee, as they were “fiduciaries for all parties in interest in the receivership proceeding”; that thereafter the noteholders’ committee filed two written reports, the first one dated August 27, 1924, and the second May 19, 1925; that on March 13, 1925, Wiltsee filed a second petition, asking for further information, upon which hearings were had, at whieh the noteholders’ committee submitted oral testimony in addition to the second report; that toward the close of these hearings, on July 31, 1925, Wiltsee filed a creditors’ petition in behalf of himself and other creditors, which was allowed nunc pro tunc as of May 8;<1924 (1923 error), the date of the filing of his first petition.

In this petition Wiltsee challenged the validity of the reorganization by the note-holders’ committee; that in presenting to the court and in carrying out said plan said committee assumed a fiduciary duty and relationship to the creditors of the New England Oil Corporation; that, instead of performing their duty with diligence and fidelity, they wasted and dissipated the assets of the Oil Corporation, which, if properly handled, were adequate to pay the creditors in full. The prayers of the petitioner were that it be decreed that the noteholders’ committee had failed in their fiduciary duty, and that, by reason of such failure, they had dissipated the entire assets of the Oil Corporation that were of sufficient value to pay its debts; that said committee be ordered to pay over to the Oil Corporation a sum of money equal in value to the assets wasted, and that the receivers of the Oil Corporation be ordered to pay the petitioner the amount of his debt and expenses of litigation; or, in the alternative, in case no other creditors appeared and joined in the petition, that the note-holders’ committee be ordered to pay Wilt-see directly. The petition did not ask that the decree of February 17, 1923, approving the plan of reorganization, be vacated.

October 3, 1925, Judge Anderson filed an opinion (8 F.[2d] 392) in which he found, among other things, that the noteholders’ committee obtained the decree of February 17,1923, approving and authorizing the plan of reorganization, through fraudulent representations, and were guilty of fraud in carrying out the plan, and on October 7, 1925, he entered the decree from which the present petitioners desire to appeal.

In the decree of October 7, 1925, after finding that the decree of February 17, 1923, approving the plan of reorganization, was obtained by fraud, the court made the following orders, among others:

“(1) Said decree of this court, made on February 17, 1923, approving the plan of reorganization submitted by said committee, is hereby rescinded and vacated, so far as such decree may affect the rights of Wiltsee and/or of any other creditors of said receivership estate who may hereafter join in these proceedings and be held entitled to rescind the settlement of their debt claims made by them with said committee under said plan of reorganization, but saving all rights which may have accrued to bona fide purchasers and holders of the general or second mortgage bonds, issued as a part of said plan of reorganization; saving, also, all other rights whieh may have accrued under said reorganization to any other parties acting in good faith and without notice of any invalidity in the proceedings of said committee with relation to said reorganization.”

And, after instructing the receiver to send to all former creditors of the New England Oil Corporation, whose claims have been approved and allowed, an order of notice (prescribing what it should contain), the court further ordered:

“(8) The expenses incurred by the receiver in printing the opinion, decree, and order of notice, and mailing the same, shall, as soon as may be, be presented by him to the New England Oil-Refining Company, whieh shall forthwith pay the same in accordance with the order and/or stipulation of September 24, 1923, referred to on page — of the opinion of October 3, 1925. The court will entertain an appropriate application of the receiver for compensation for services to be rendered by him, and for orders for [346]*346like payment from the Refining Corhpany. The question of the committee’s ultimate liability for all such expenditures is, as set forth in said opinion, reserved. But it will be the duty of the receiver to bring this matter to the court’s attention seasonably before final decree in this court.”

It is the orders or decrees embraced in clauses (1) and (8) above stated that the present petitioners claim are final orders or decrees from which they are entitled to appeal. The “order and/or stipulation of September 24, 1923,” above referred to as being sét out in the opinion of October 3, 1925, is explained on page 94'of the record in this ease, as follows^

“The receiver has now no ■ assets in his possession.

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Cite This Page — Counsel Stack

Bluebook (online)
9 F.2d 344, 1925 U.S. App. LEXIS 2377, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-new-england-oil-refining-co-ca1-1925.