Anaconda Building Materials Co. v. John N. Newland, Trustee of the Estate of Hughes Homes, Inc., a Corporation,et Al., Debtors

This appeal arises in consolidated proceedings under Chapter X of the National Bankruptcy Act (Act), Act of' June 22, 1938, 52 Stat. 883 , as amended 11 U.S.C. § 501 et seq. (1958). The proceedings involve the proposed reorganization of Hughes Homes, Inc., an insolvent Montana corporation, and four insolvent subsidiary corporations.

Certain major trade creditors of the-parent corporation indicated to the debtors’ trustee that they intended to assert claims against the assets of the subsidiaries, claiming the right to share-pro rata in those assets with the creditors of the subsidiaries. The trustee-thereupon applied to the district court, for instructions as to the relative rights, of the creditors of the parent corporation and the creditors of the subsidiary corporations in the assets of the latter.

The debenture holders of each of the four subsidiaries filed objections, taking the position that the subsidiaries should be treated as separate entities and that their respective net assets should be distributed solely on that basis. The United States Securities and Exchange Commission intervened pursuant to section 208 of the Act, 11 U.S.C. § 608 (1958). The Commission filed a…