Wallace v. Securities & Exchange Commission

COFFIN, Chief Judge.

The debtor, Continental Investment Corporation (CIC), a committee of its creditors, see 11 U.S.C. § 738, and the debtor’s principal stockholders have appealed from the decision of the district court granting a motion by the Securities and Exchange Commission (SEC) to transfer proceedings from Chapter XI to Chapter X of the Bankruptcy Act pursuant to 11 U.S.C. § 728.1 We are required to explore the boundaries of the rule promulgated by SEC v. American Trailer Rentals Co., 379 U.S. 594, 85 S.Ct. 513, 13 L.Ed.2d 510 (1965), and the extent of its exceptions.

CIC is a holding…