FRANK, Circuit Judge.
Since appellant did not appeal from the order confirming the modified arrangement, we may not consider defects in that order, although it >vas more or less coupled [854]*854with the order authorizing the sale.1 We turn, then, to the sale order.
Under Chapter XI, a sale of all the debtor’s assets may be authorized, pursuant to § 313(2), 11 U.S.C.A. § 713(2), only “upon cause shown”. This section is worded the same as § 116(3), 11 U.S.C.A. § 516(3), relative to such a sale in a Chapter X proceeding. It has been held that to prove “cause” for a sale under § 116(3) it is necessary to show that the assets are, in effect, “perishable”; such a sale must “be confined to emergencies where there is imminent danger that the assets of the ailing business will be lost if prompt action is not taken.” In re Solar Mfg. Corp., 3 Cir., 176 F.2d 493, 494. See also In re V. Loewer’s Gambrinus Brewing Co., Inc., 2 Cir., 141 F.2d 747, 748, where we stated the facts as follows: “There was no working capital on hand sufficient to operate the business and the creditors ánd stockholders were unwilling to furnish any. With the approach of warm weather the vats, kettles and other brewery machinery would deteriorate rapidly and lose substantially all their value, while both real and personal property would be absorbed by the mortgagee.” We think § 313(2) must be similarly interpreted.
The debtor here, therefore, was obliged to allege and had the burden of proving the existence of an emergency involving imminent danger of loss of the assets if they were not promptly sold. The petition for sale fell far short of alleging such facts. Nor is there a finding of fact, based upon evidence; supporting the conclusion that “cause” had been shown. Such a finding is required.
Section 216(10), applicable to a Chapter X proceeding, provides that a plan may authorize the sale of all the assets “at not less than a fair upset price” and the distribution- of the proceeds among the creditors. Although Fidelity Assurance Ass’n v. Sims, 318 U.S. 608, 63 S.Ct. 807, 87 L.Ed. 1032, throws some doubt on the scope of that section, the Sims case has been held to authorize a sale in pursuance of a Chapter X plan, at least where the original Chapter X petition was filed in good faith2 But Chapter XI, 11 U.S.C.A. § 701 et seq., contains no provision such as- § 216(10) ; and Section 101, part of Chapter X, 11 U.S.C.A. § 501 et seq., states: “The provisions of this chapter shall apply exclusively to proceedings under this chapter.” A report of the Senate Judiciary Committee, in connection with the 1938 revision of the Bankruptcy Act, said that § 101 “prevents the extension and application of any provisions of Chapter X to other chapters of this bill.” 3
There are good reasons why Congress, provided that a sale of all assets may be-part of a Chapter X plan but did not so-provide with respect to a Chapter XI arrangement: In Chapter X, under § 167, an independent trustee ordinarily investigates, all matters relating to the property of the company, examines the officers of the debtors and others concerning.such matters;, under § 169, the trustee prepares and presents the plan which the judge considers together with objections or alternative plans-proposed by any creditor; under § 175,, only after the judge approves the piando the creditors vote on it; under § 176, consents to a plan can ordinarily not be-[855]*855obtained until the judge has approved it; and under § 216(10) the sale must be “at not less than a fair upset price”. The difference between a Chapter X and a Chapter XI plan is the more striking when, as here, the Chapter XI petition is filed under § 322, for then no trustee is appointed to administer the estate before confirmation of the arrangement.4
It is true that § 306(1) defines a Chapter XI arrangement as “any plan of a debtor for the settlement, satisfaction, or extension of the time of payment of his unsecured debts, upon any terms”. It is urged that this section imports into Chapter XI something the equivalent of § 216 (10)— i. <?., that it authorizes a plan for a sale of all the assets and the liquidation of the unsecured debts. This would mean that a Chapter XI plan could bring about the same result as ordinary bankruptcy proceedings but minus the protective provisions which are part of the latter, especially as to a sale of all the assets.5 We cannot accept that interpretation of § 306(1). It must be read together with § 356 which provides that “An arrangement * * * shall include provisions modifying the rights of unsecured creditors”. We agree with the following comment :6 “But notwithstanding the breadth of the definition of an arrangement under Chapter XI, the arrangement must comprehend something more than a mere surrender by the debtor of all his assets for liquidation and distribution to creditors; an arrangement is defined as a ‘plan of the debtor,’ but there is no ‘planning’ by a bankrupt in proposing that his creditors be given what the law provides in liquidation under straight bankruptcy. The requirement that an arrangement shall include provisions modifying the rights of creditors clearly means some modification devised by the debtor, not by Congress.” From the facts meagerly appearing in this record, we assume that, in ordinary bankruptcy, the merchandise creditors, with claims aggregating $4,605.34, and the salary claims aggregating $6,600.00, would have been entitled to priority over the other unsecured creditors, with note claims aggregating $49,920.00.7 The only difference between the confirmed liquidation arrangement and ordinary bankruptcy is, then, that holders of salary claims, aggregating $6,-600, have consented that their claims are to be subordinated to the $4,605.34 of claims of the merchandise creditors. That subordination of those salary claims, with the result that they cannot be paid in full, would have been invalid without their consent, either in ordinary bankruptcy or under Chapter XI, at least without the consent of a majority in number and amount of that class, § 362, 11 U.S.C.A. § 762. The mere consent to such subordination by one small group of creditors does not (at least in a case, like this, where no emergency is pres[856]*856ent) validate a Chapter XI liquidation plan which deprives any other non-consenting creditor (who will not be paid in full) of the benefits of the provisions safeguarding a sale in ordinary bankruptcy. Accordingly, the sale here cannot be justified as a part of a valid Chapter XI arrangement. The fact that the great majority of the note-holders consented to the invalid sale is immaterial.8
We conclude, therefore, that the order authorizing the sale was in error and must be reversed.
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FRANK, Circuit Judge.
Since appellant did not appeal from the order confirming the modified arrangement, we may not consider defects in that order, although it >vas more or less coupled [854]*854with the order authorizing the sale.1 We turn, then, to the sale order.
Under Chapter XI, a sale of all the debtor’s assets may be authorized, pursuant to § 313(2), 11 U.S.C.A. § 713(2), only “upon cause shown”. This section is worded the same as § 116(3), 11 U.S.C.A. § 516(3), relative to such a sale in a Chapter X proceeding. It has been held that to prove “cause” for a sale under § 116(3) it is necessary to show that the assets are, in effect, “perishable”; such a sale must “be confined to emergencies where there is imminent danger that the assets of the ailing business will be lost if prompt action is not taken.” In re Solar Mfg. Corp., 3 Cir., 176 F.2d 493, 494. See also In re V. Loewer’s Gambrinus Brewing Co., Inc., 2 Cir., 141 F.2d 747, 748, where we stated the facts as follows: “There was no working capital on hand sufficient to operate the business and the creditors ánd stockholders were unwilling to furnish any. With the approach of warm weather the vats, kettles and other brewery machinery would deteriorate rapidly and lose substantially all their value, while both real and personal property would be absorbed by the mortgagee.” We think § 313(2) must be similarly interpreted.
The debtor here, therefore, was obliged to allege and had the burden of proving the existence of an emergency involving imminent danger of loss of the assets if they were not promptly sold. The petition for sale fell far short of alleging such facts. Nor is there a finding of fact, based upon evidence; supporting the conclusion that “cause” had been shown. Such a finding is required.
Section 216(10), applicable to a Chapter X proceeding, provides that a plan may authorize the sale of all the assets “at not less than a fair upset price” and the distribution- of the proceeds among the creditors. Although Fidelity Assurance Ass’n v. Sims, 318 U.S. 608, 63 S.Ct. 807, 87 L.Ed. 1032, throws some doubt on the scope of that section, the Sims case has been held to authorize a sale in pursuance of a Chapter X plan, at least where the original Chapter X petition was filed in good faith2 But Chapter XI, 11 U.S.C.A. § 701 et seq., contains no provision such as- § 216(10) ; and Section 101, part of Chapter X, 11 U.S.C.A. § 501 et seq., states: “The provisions of this chapter shall apply exclusively to proceedings under this chapter.” A report of the Senate Judiciary Committee, in connection with the 1938 revision of the Bankruptcy Act, said that § 101 “prevents the extension and application of any provisions of Chapter X to other chapters of this bill.” 3
There are good reasons why Congress, provided that a sale of all assets may be-part of a Chapter X plan but did not so-provide with respect to a Chapter XI arrangement: In Chapter X, under § 167, an independent trustee ordinarily investigates, all matters relating to the property of the company, examines the officers of the debtors and others concerning.such matters;, under § 169, the trustee prepares and presents the plan which the judge considers together with objections or alternative plans-proposed by any creditor; under § 175,, only after the judge approves the piando the creditors vote on it; under § 176, consents to a plan can ordinarily not be-[855]*855obtained until the judge has approved it; and under § 216(10) the sale must be “at not less than a fair upset price”. The difference between a Chapter X and a Chapter XI plan is the more striking when, as here, the Chapter XI petition is filed under § 322, for then no trustee is appointed to administer the estate before confirmation of the arrangement.4
It is true that § 306(1) defines a Chapter XI arrangement as “any plan of a debtor for the settlement, satisfaction, or extension of the time of payment of his unsecured debts, upon any terms”. It is urged that this section imports into Chapter XI something the equivalent of § 216 (10)— i. <?., that it authorizes a plan for a sale of all the assets and the liquidation of the unsecured debts. This would mean that a Chapter XI plan could bring about the same result as ordinary bankruptcy proceedings but minus the protective provisions which are part of the latter, especially as to a sale of all the assets.5 We cannot accept that interpretation of § 306(1). It must be read together with § 356 which provides that “An arrangement * * * shall include provisions modifying the rights of unsecured creditors”. We agree with the following comment :6 “But notwithstanding the breadth of the definition of an arrangement under Chapter XI, the arrangement must comprehend something more than a mere surrender by the debtor of all his assets for liquidation and distribution to creditors; an arrangement is defined as a ‘plan of the debtor,’ but there is no ‘planning’ by a bankrupt in proposing that his creditors be given what the law provides in liquidation under straight bankruptcy. The requirement that an arrangement shall include provisions modifying the rights of creditors clearly means some modification devised by the debtor, not by Congress.” From the facts meagerly appearing in this record, we assume that, in ordinary bankruptcy, the merchandise creditors, with claims aggregating $4,605.34, and the salary claims aggregating $6,600.00, would have been entitled to priority over the other unsecured creditors, with note claims aggregating $49,920.00.7 The only difference between the confirmed liquidation arrangement and ordinary bankruptcy is, then, that holders of salary claims, aggregating $6,-600, have consented that their claims are to be subordinated to the $4,605.34 of claims of the merchandise creditors. That subordination of those salary claims, with the result that they cannot be paid in full, would have been invalid without their consent, either in ordinary bankruptcy or under Chapter XI, at least without the consent of a majority in number and amount of that class, § 362, 11 U.S.C.A. § 762. The mere consent to such subordination by one small group of creditors does not (at least in a case, like this, where no emergency is pres[856]*856ent) validate a Chapter XI liquidation plan which deprives any other non-consenting creditor (who will not be paid in full) of the benefits of the provisions safeguarding a sale in ordinary bankruptcy. Accordingly, the sale here cannot be justified as a part of a valid Chapter XI arrangement. The fact that the great majority of the note-holders consented to the invalid sale is immaterial.8
We conclude, therefore, that the order authorizing the sale was in error and must be reversed. As there was no stay or supersedeas bond, and as the district court had jurisdiction, if the sale was completed and confirmed before the appeal, the sale cannot be undone, if the purchase was bona fide, i. e., not made indirectly for the debtor or for some other party or parties to the Chapter XI proceeding.9 “But whether or not the sale in this case was bona fide, and should stand, is not a question which can be determined now, or which should be allowed to affect the character or scope of our action on the appeal.” 10
If on the remand it should appear that the sale was not bona fide,10a then, as the debtor will presumably be unable to deposit the funds pursuant to the previously confirmed arrangement, this will follow: The Chapter XI proceedings must be dismissed or transferred to ordinary bankruptcy,11 unless the debtor either (1) reverts to the arrangement originally proposed in the original petition or (2) offers a new valid modified arrangement. If either (1) or (2) occurs, then the court (pursuant either to § 334 or § 365) should promptly call a creditors’ meeting, at which the debtor will be examined; before confirming either the initial or a new modified arrangement, the court must see that all the requirements of § 366 are met.
Reversed and remanded.
. See General Order No. 37, 11 U.S.C.A. following section 53, which makes the procedural rules, including Rule 52(a), 28 U.S.C.A., applicable to Chapter XI proceedings. 1 Collier Bankruptcy (14th ed.) Section 2.81, 8 Collier, Sections 1.35, 1.37: Kelley v. Everglades Drainage District, 319 U.S. 415, 418, 63 S.Ct. 1141, 87 L.Ed. 1485; Rosenberg v. Heffron, 9 Cir., 131 F.2d 80-82; In re Stein, D.C., 43 F.Supp. 845, 847.