Chapman Bros. v. Security-First Nat. Bank

On March 1, 1939, the appellant corporation filed a petition seeking to take advantage of chapter X of the Chandler Act, 11 U.S.C.A. § 501 et seq. relating to corporate reorganization. According to the petition of appellant its assets were $3,095,802.65 and its total liabilities $2,305,922.50, the net worth of its property thus amounting to $789,880.15. Of the assets it was alleged that $3,058,350 represented the value of real estate covered by various deeds of trust given as security for obligations amounting to $2,139,338.03, its remaining indebtedness being unsecured.

The plan of the reorganization proposed by the appellant was one by which bonds and preferred stock might be issued and sold to the public if authorized by the.Corporation Commissioner of the state and “that under such a suggested plan of reorganization your petitioner, if such plan is adopted, could hold its equities in the form of common stock and that no dividends could be declared thereupon until the retirement of said bonds and preferred stock at the earliest possible moment consistent with the earnings of your petitioner under an appropriate budget reserve set up from such earnings from time to time so as…