Lorber

In March, 1938, Appellee Vista Irrigation District (hereinafter referred to as the District), an irrigation district organized under the provisions of the California Irrigation District Act, approved March 31, 1897, and acts amendatory thereof, Cal.Stats. 1897, p. 254, as amended, Deering’s General Laws, Act 3854, filed a petition for composition of debts under the provisions of Chapter IX of the Bankruptcy Act of 1898 as amended, 11 U.S.C.A. §§ 401-404 . After a hearing of the petition, the District Court entered its interlocutory decree confirming the plan of composition proposed by the District. Certain bondholders of the District appeal.

The District, comprising 18,309.48 acres of land in San Diego County, California, was organized in 1923 and January 1, 1925, it issued its 6% semi-annual interest paying coupon bonds in the amount of $1,700,-000 due serially from 1946 to 1965. All due interest on the bonds was paid to January 1, 1933, but trouble had already been sighted for in 1932 a Bondholders Protective Committee was organized, and persons owning 93% of the outstanding bond issue signed an agreement to effect a reduction in interest payable from 1933 to 1937. The…