United States v. Consolidated Rock Products Co.

At all pertinent times appellee, Consolidated Rock Products Company, a Delaware corporation, had its principal place of business in Los Angeles, California, and was there engaged in the business of producing and selling sand, rock, gravel and other building materials. In that business appellee used property some of which was owned by, and some of which was leased to, its subsidiaries — Union Rock Company, a Delaware corporation; Reliance Rock Company, a Delaware corporation; Consumers Rock & Gravel Company, Inc., a Delaware corporation; Builders Crushed Rock Products Company, a California corporation; Sunset Rock Products Company, Inc., a California corporation; Union Rock Land Company, a California corporation; and Atlas Mixed Mortar Company, a California corporation. The right to use such property was granted to appellee by its subsidiaries in and by agreements called operating agreements, 1 all of which were made before May 24, 1935.

On May 24, 1935, appellee filed with the District Court of the United States for the Southern District of California a petition under § 77B of the Bankruptcy Act, as added by § 1 of the Act of June 7, 1934, c. 424, 48 Stat. 912 , 11 U.S.C.A. § 207…