North American Car Corp. v. Weighing

Appellee, North American Car Corporation, was the owner of $15,000 principal amount of the 6% ten year secured sinking fund gold bonds of General Vending Corporation when the latter petitioned on June 18, 1934, for reorganization under former ? 77B of the Bankruptcy Act, 11 U.S.C.A. ? 207. Thereafter, on March 11, 1935, North American filed a written acceptance of a proposed plan of reorganization for General - as well as for Consolidated Automatic Merchandising Corporation, whose subsidiary it was - under which its assets were to be transferred to a new corporation, Peerless Weighing & Vending Machine Corporation; and holders of its 6% gold bonds were to receive in exchange for each $1,000 principal amount ten shares of the preferred stock and twenty shares of the common stock of Peerless. As then drafted, the plan stated no time limit within which bondholders were required to exchange their bonds; but a modified plan of June 15, 1935, provided, among other things, that Peerless was not required to issue stock to bondholders who had failed to surrender their bonds by December 31, 1937. It was this modified plan which, with certain other modifications not here important, was finally confirmed by order of the District Court dated October 14, 1935. This order stated that the court "expressly retained" jurisdiction over the debtor companies "for all purposes" until the final determination of the court as to all claims against the debtors and the payment of such as were allowed, and until Peerless should have reported consummation of the plan and "have secured the final decree or order of this Court concluding these proceedings and closing the case." It further reserved "full right and jurisdiction to make from time to time such orders amplifying, extending, confirming or otherwise modifying this order and all other orders hereinbefore entered herein as to this Court may at any time seem proper." Accordingly, by order of December 31, 1937, the time for exchange of bonds for stock in Peerless was extended until July 1, 1938.