Falcon Capital Corp. Shareholders v. Osborne

NORRIS, Circuit Judge:

Appellants, claimants in the reorganization proceedings of THC Financial Corporation (THCF), seek parity with general unsecured creditors of THCF. The district court, sitting as a reorganization court under the former Bankruptcy Act (11 U.S.C. §§ 501-676 (1976) (repealed 1978)), granted summary judgment for THCF’s Trustee in Reorganization, subordinating appellants’ claim on the ground that it is equitably inferior to the claims of THCF’s general unsecured creditors. We affirm.

I

Appellants are shareholders of The Hawaii Corporation (THC). They were sole shareholders of…