Case v. Los Angeles Lumber Products Co.

These. cases 1 present the question of the conditions under which stockholders may participate in a plan of reorganization under § 77B (48 Stat. 912) of the Bankruptcy Act where the debtor corporation is insolvent both in the equity and in the bankruptcy sense. Because of the contrariety of tendencies in practical administration of the Act among the circuits as illustrated by the differences between the holding below (100 F. 2d 963) and that in In re Barclay Park Corp., 90 F. 2d 595, we granted certiorari.

The debtor is a holding company owning all of the outstanding shares of the capital…