In the Matter of Equity Funding Corporation of America, Debtor. Financial Associates, a Limited Partnership v. Robert M. Loeffler, Trustee

This is an expedited appeal from an order of the district court, entered in the course of a reorganization proceeding under Chapter X of the Bankruptcy Act [ 11 U.S.C. § 501 , et seq.]. The order authorized the trustee of Equity Funding Corporation of America (EFCA), as sole stockholder of Liberty Savings and Loan Association, a wholly-owned subsidiary of EFCA, to consent to the sale of the assets of Liberty to Coast Federal Savings and Loan Association. The Liberty stock was in the possession of the trustee. We affirm the order of the district court and direct that the clerk issue the mandate forthwith.

Appellants, a group of former Liberty shareholders who now oppose the sale of Liberty’s assets, had exchanged their stock for EFCA stock in a 1971 merger of Liberty and Crown Savings and Loan Association, another subsidiary of EFCA. Two days before the Chapter X petition was filed, appellants served a notice of rescission in which they attempted to rescind the merger on the basis of fraud. They contend that only an emergency or imminent danger of loss can warrant the court’s approval of the consent to sell the assets of Liberty.

We reject the argument of appellants,…