DENMAN, Chief Judge.
These appeals, consolidated for hearing, are from two orders of the district court rendered on July 11, 1950, and November 21, 1950, pursuant to Section 11(e) of the Public Utility Holding Company Act of 1935.1 The order of July 11th approved the principal provisions of a Securities & Exchange Commission order for the reorganization of Market Street Railway Co., but disapproved the plan insofar as it failed to provide an allowance of fees for William J. Cogan as attorney for the Van Kirk Committee for prior preference stockholders of Market Street, and remanded the proceeding to the Commission. The Commission appeals here from the portions of the order of July 11, 1950, which disapproved disallowance of the attorney’s fee. The remainder of the order, which approved the reorganization plan in all other respects was appealed from by Cogan personally but not as attorney for any person affected by the plan — and hence is not considered by us.
Upon remand to the Commission, the plan was ordered divided into two steps. Step One ordered a reorganization in substance as in the reorganization plan approved by the district court’s order of July 11, 1950, other than as to the above fees. For this portion of thé plan the Commission sought approval of the district court which was granted by the court’s order of November 21st. From this order, Jones, a prior preferred shareholder of Market Street, appeals. Step Two ordered reserved the question of the fees awaiting our decision on the district court order disapproving disallowance of Cogan’s fees.
Three issues confront us on this appeal: (a) whether Step One of the Commission’s last order providing for reorganization of Market Street and settlement of all claims made by or against Market Street is fair and equitable within the meaning of Section 11(a) of the Holding Company Act of 1935; 2 (b) whether the Commission acted within its powers in denying Cogan’s fee; and (c) whether the court below gave an adequate judicial review to the Commission’s order.
(a) Appellant Jones .attacks the fairness and equity of the reorganization plan principally because an alleged claim which Market Street had against another corporation was included in a general release of claims which was part of the reorganization plan. The background is this: Market Street is a subsidiary company of Standard Gas and Electric Company (Standard Gas) and of Standard Power and Light Corporation (Standard Power). It carried on its books an open account debt to Standard Gas in the amount of $1,026,-249. The validity of this debt was challenged by certain of Market Street’s shareholders.
On May 20, 1947, the Commission, acting upon a petition filed with it on behalf of the Van Kirk Committee by its attorney, William J. Cogan, ordered that a public hearing be held to inquire into the relationships, past and present, between Market Street and its associate companies, the character of the interests of 'Standard Gas in Market Street, and the facts concerning charges entered on the open account for services done for Market Street by affiliated companies. The Van Kirk Committee contended that these service charges were fraudulently imposed on Market Street by its affiliated companies since no substantial services were rendered to Market Street.
During the period of the hearing, negotiations were had for a settlement of the open account claim of Standard Gas. Early in December, 1947, Cogan and Standard Gas agreed to a settlement of the claim, pursuant to which Market Street would, among other things, pay $550,000 to Stand[80]*80ard Gas and Market Street and Standard Gas would each pay $25,000 to Cogan and $12,500 to the Van Kirk Committee.
On May 3, 1948, Market Street filed with the Commission an application for approval of a proposed reorganization plan substantially embodying the terms of the settlement. The principal modifications of the plan required by the Commission were the elimination of the proposed payments to attorney Cogan and a reduction of the amount payable by Market Street to Standard Gas from $550,000 to $512,500, the net amount which Standard Gas would have received under the plan after proposed payments by Standard to Cogan and to the Van Kirk Committee. The Commission now says that payment of the amount was approved as fair and equitable to Market Street and its prior preference stockholders and to Standard Gas, upon consideration of apparent overcharges against Market Street during the period of 1926-1935 for services rendered by affiliates of Standard Gas. This was indicated in part by payments to Standard Power aggregating $270,000 by one of such affiliates, out of fees billed to Market Street. The Commission also considered the facts that some valuable services were rendered to Market Street and that Standard Gas had made substantial cash advances to Market Street for the servicing of Market Street’s bonds then outstanding.
On October 14, 1949, two weeks after the Commission denied his fee, Cogan filed an action against Standard Power in the name of the Van Kirk Committee and appellant Jones, seeking to recover for Market Street the above sum of $270,000., Standard Power is at present a parent of Standard Gas, but during the years 1926 through 1929, when the $270,000 was paid to Standard Power, it was a subsidiary of Standard Gas.
On March 9, 1950, the Commission found that the reorganization plan should be further amended to provide clearly for a complete release of Standard Gas and its subsidiaries, including Standard Power. Jones now claims that the settlement was not intended to include the claim for $270,000 against Standard Power. This contention cannot be sustained. The overcharges presumably made against Market Street were all made by the same management company, Byllesby Engineering & Management Corp., a part of the Standard Gas system. From 1926-29, $270,000 of these charges were paid over to Standard Power by Byllesby.
Cogan seeks to dissect this particular $270,000 transfer from the remainder of the pattern of overcharging. The only fact that lends color to his argument is that when Standard Power received the money from Byllesby it was the immediate parent of Market Street; but after a shift of corporate shares in 1930, Standard Gas became the immediate parent and Standard Power the grandparent holding company of Market Street. It was after this shift of position that the open account became most active. However, the pattern of overcharge continued as before and pursuant to substantially the same management contract as before. The evidence is overwhelming that the history of overcharge was regarded throughout the settlement negotiation as a unitary thing, despite a shift in corporate relations in 1930. During the investigation by the Securities & Exchange Commission the evidence which Cogan himself submitted referred indiscriminately to the entire period between 1926-35. It is obvious that a complete satisfaction of all claims relating to overcharges was accomplished in the settlement agreement and adopted as part of the final plan of reorganization.
(b) Appelle'e Cogan, who challenges the disallowance by the Commission of his fee, is conceded by all to have been instrumental in uncovering wrongful overcharges against Market Street by its parent 'companies.
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DENMAN, Chief Judge.
These appeals, consolidated for hearing, are from two orders of the district court rendered on July 11, 1950, and November 21, 1950, pursuant to Section 11(e) of the Public Utility Holding Company Act of 1935.1 The order of July 11th approved the principal provisions of a Securities & Exchange Commission order for the reorganization of Market Street Railway Co., but disapproved the plan insofar as it failed to provide an allowance of fees for William J. Cogan as attorney for the Van Kirk Committee for prior preference stockholders of Market Street, and remanded the proceeding to the Commission. The Commission appeals here from the portions of the order of July 11, 1950, which disapproved disallowance of the attorney’s fee. The remainder of the order, which approved the reorganization plan in all other respects was appealed from by Cogan personally but not as attorney for any person affected by the plan — and hence is not considered by us.
Upon remand to the Commission, the plan was ordered divided into two steps. Step One ordered a reorganization in substance as in the reorganization plan approved by the district court’s order of July 11, 1950, other than as to the above fees. For this portion of thé plan the Commission sought approval of the district court which was granted by the court’s order of November 21st. From this order, Jones, a prior preferred shareholder of Market Street, appeals. Step Two ordered reserved the question of the fees awaiting our decision on the district court order disapproving disallowance of Cogan’s fees.
Three issues confront us on this appeal: (a) whether Step One of the Commission’s last order providing for reorganization of Market Street and settlement of all claims made by or against Market Street is fair and equitable within the meaning of Section 11(a) of the Holding Company Act of 1935; 2 (b) whether the Commission acted within its powers in denying Cogan’s fee; and (c) whether the court below gave an adequate judicial review to the Commission’s order.
(a) Appellant Jones .attacks the fairness and equity of the reorganization plan principally because an alleged claim which Market Street had against another corporation was included in a general release of claims which was part of the reorganization plan. The background is this: Market Street is a subsidiary company of Standard Gas and Electric Company (Standard Gas) and of Standard Power and Light Corporation (Standard Power). It carried on its books an open account debt to Standard Gas in the amount of $1,026,-249. The validity of this debt was challenged by certain of Market Street’s shareholders.
On May 20, 1947, the Commission, acting upon a petition filed with it on behalf of the Van Kirk Committee by its attorney, William J. Cogan, ordered that a public hearing be held to inquire into the relationships, past and present, between Market Street and its associate companies, the character of the interests of 'Standard Gas in Market Street, and the facts concerning charges entered on the open account for services done for Market Street by affiliated companies. The Van Kirk Committee contended that these service charges were fraudulently imposed on Market Street by its affiliated companies since no substantial services were rendered to Market Street.
During the period of the hearing, negotiations were had for a settlement of the open account claim of Standard Gas. Early in December, 1947, Cogan and Standard Gas agreed to a settlement of the claim, pursuant to which Market Street would, among other things, pay $550,000 to Stand[80]*80ard Gas and Market Street and Standard Gas would each pay $25,000 to Cogan and $12,500 to the Van Kirk Committee.
On May 3, 1948, Market Street filed with the Commission an application for approval of a proposed reorganization plan substantially embodying the terms of the settlement. The principal modifications of the plan required by the Commission were the elimination of the proposed payments to attorney Cogan and a reduction of the amount payable by Market Street to Standard Gas from $550,000 to $512,500, the net amount which Standard Gas would have received under the plan after proposed payments by Standard to Cogan and to the Van Kirk Committee. The Commission now says that payment of the amount was approved as fair and equitable to Market Street and its prior preference stockholders and to Standard Gas, upon consideration of apparent overcharges against Market Street during the period of 1926-1935 for services rendered by affiliates of Standard Gas. This was indicated in part by payments to Standard Power aggregating $270,000 by one of such affiliates, out of fees billed to Market Street. The Commission also considered the facts that some valuable services were rendered to Market Street and that Standard Gas had made substantial cash advances to Market Street for the servicing of Market Street’s bonds then outstanding.
On October 14, 1949, two weeks after the Commission denied his fee, Cogan filed an action against Standard Power in the name of the Van Kirk Committee and appellant Jones, seeking to recover for Market Street the above sum of $270,000., Standard Power is at present a parent of Standard Gas, but during the years 1926 through 1929, when the $270,000 was paid to Standard Power, it was a subsidiary of Standard Gas.
On March 9, 1950, the Commission found that the reorganization plan should be further amended to provide clearly for a complete release of Standard Gas and its subsidiaries, including Standard Power. Jones now claims that the settlement was not intended to include the claim for $270,000 against Standard Power. This contention cannot be sustained. The overcharges presumably made against Market Street were all made by the same management company, Byllesby Engineering & Management Corp., a part of the Standard Gas system. From 1926-29, $270,000 of these charges were paid over to Standard Power by Byllesby.
Cogan seeks to dissect this particular $270,000 transfer from the remainder of the pattern of overcharging. The only fact that lends color to his argument is that when Standard Power received the money from Byllesby it was the immediate parent of Market Street; but after a shift of corporate shares in 1930, Standard Gas became the immediate parent and Standard Power the grandparent holding company of Market Street. It was after this shift of position that the open account became most active. However, the pattern of overcharge continued as before and pursuant to substantially the same management contract as before. The evidence is overwhelming that the history of overcharge was regarded throughout the settlement negotiation as a unitary thing, despite a shift in corporate relations in 1930. During the investigation by the Securities & Exchange Commission the evidence which Cogan himself submitted referred indiscriminately to the entire period between 1926-35. It is obvious that a complete satisfaction of all claims relating to overcharges was accomplished in the settlement agreement and adopted as part of the final plan of reorganization.
(b) Appelle'e Cogan, who challenges the disallowance by the Commission of his fee, is conceded by all to have been instrumental in uncovering wrongful overcharges against Market Street by its parent 'companies. However, in the course of his activities and after two abortive attempts in 1947 to reach a settlement of the claims between Market Street and Standard Gas, Cogan met certain officers of Standard Gas and in a discussion with them said to his adversaries in the negotiation that, “In case you don’t want me as counsel against you on any other matter, perhaps you could give me a retainer.” At one point Cogan explained that this statement was made in j est. At another time he explained that the statement had a more serious motive, that [81]*81the reference to “other matter” was to possible claims by other subsidiaries of Standard Gas for wrongful overcharges on management contracts. Cogan’s offer was not accepted and a vice-president of Standard Gas testified that he did not understand this offer to relate to the settlement negotiations then going on. But the Commission chose to infer from these facts that Cogan had lost his independence in representing his shareholder clients. At the time of this meeting the parties were still $300,000 apart in their negotiations, but Cogan had specified that upon settlement his fee was to be $50,000. Subsequently Cogan increased his offer to Standard Gas by $200,-000 and Standard Gas reduced its claim by $100,000 in order to reach the settlement figure. The fee figure was not changed. The Commission declined to speculate upon the precise effect of Cogan’s offer to accept a retainer from his adversary.
Upon this theory for the Commission’s action, the result must be sustained. We have here a rule which has been applied with great severity by courts seeking to control the conduct of attorneys who are officers of the court.3 When an attorney has been found subject to a conflict of interest in his representation, the tribunal before which he appears has discretion to deny him any fee.4 Indeed the Act governing this reorganization proceeding provides that “any or all fees, expenses, and remuneration, to whomsoever paid, in connection with any reorganization * * * of a registered holding company or subsidiary company thereof * * * shall be subject to approval by the Commission.” 5
The district court can set aside the Commission’s action only if it amounts to an abuse of discretion. Upon an examination of all the record evidence plus exhibits which have been appended to Cogan’s brief, we cannot say that the Commission’s action is an abuse of discretion. The Commission’s inference that there was a conflict of interest was a reasonable one, and since the widom of the order is not our concern, we cannot substitute a different inference which we might draw.6
(c) Appellant Jones claims that the district court which reviewed the reorganization plan gave it an inadequate judicial review and that § 10(e) of the Administrative Procedure Act was thereby violated. There is no merit to this contention. Section 10(e) 7 of the Act, which applies to the Commission, requires the district court to set aside agency findings which are “unsupported by substantial evidence * * *. In making the foregoing determinations the court shall review the whole record or such portions thereof as may be cited by any party”. (Emphasis supplied.)
The order concerning the reorganization plan was made after a hearing of two full days, taking up 260 pages of the record. In the course of that hearing the attorneys for all the parties concerned cited the portions of the record, including the transcript of testimony upon which they relied. At the conclusion of the hearing with its cited portions of the transcript the court stated it had reached certain conclusions and said: “I have heard all the arguments in the matter. Of course, I haven’t examined the record, that is, at least that portion of the record which consists of the transcript, and needles-s to say, I haven’t examined any of the matters that are contained in the trunk, documents and what not. * * * If any counsel feel they want to submit anything further in connection with the matter that would make any material difference, I wouldn’t want to shut any of you off.”
Cogan did not submit any further citations from the record and made no request that the transcript be read, nor did he take any exception to the court’s not considering it. Nor did he make it a part of his specifications of error filed in the district court. [82]*82We regard his attempt to raise this issue in his brief on appeal as a frivolous afterthought.
The district court order of November 21, 1950, approving Step One of the final plan of reorganization is affirmed. That portion of the July 11, 1950 order relating to Cogan’s fee is reversed.