In re Elless Co‪.‬

On April 12, 1938, the District Court for the Eastern District of Michigan entered an order confirming a plan of reorganization of The Elless Company, debtor, a Michigan corporation, under Section 77B of the Bankruptcy Act, 11 U.S.C.A. § 207. The Elless Company owned and operated the Whittier Hotel, a large residential and transient hotel overlooking the Detroit River. The premises were subject to trust mortgages securing bonds aggregating more than $3,300,000 and the company was indebted in considerable amounts of money to other creditors, which it was unable to pay. The plan of reorganization provided for a new company to take over the hotel and to issue its stock to the creditors, stockholders, and bondholders of the debtor. Holders of unsubordinated first mortgage bonds were to be allocated 90% of the stock and the balance of 10% was allocated to other creditors and to the stockholders of the debtor. The plan further provided that the 90% of the stock allocated to the mortgage bondholders was to be placed in a voting trust; that the trust was to have three trustees, to be appointed by the court; and that it was to continue for a period of eight years, terminating on May 1, 1946. Upon the approval of the plan by two-thirds of the creditors, as required by statute, the court confirmed it; a new Michigan corporation known as the Whittier Corporation, was organized, took title to the hotel, and issued the stock in accordance with the plan; and the trust agreement was carried out, the stock being placed in the voting trust for an eight-year period, and trustees of the voting trust, being appointed by the court. The order confirming the plan of reorganization provided: