Committee for Holders of Central States Electric Corp. v. Austrian

PER CURIAM.

This appeal is taken by the Committee representing the preferred stockholders of Central States Electric Corporation from an order of the District Judge in a reorganization proceeding under Chapter X of the Bankruptcy Act, 11 U.S.C.A. § 501 et seq., confirming the appointment of two trustees in place of two trustees who had resigned. The new trustees were appointed after the decision of this court in Committee for Holders, &c. v. Kent, 4 Cir., 143 F.2d 684, wherein the court emphasized the need for a thorough investigation into certain charges of mismanagement and probable liability of certain officers, directors and stockholders of the corporation; and the appointment of the new trustees was made with this end in view. The appellants complain that the new trustees do not possess the necessary qualifications for the place and have exhibited no ability or zeal in the performance of their duties in the months following their appointment. We have examined the evidence with care and find no justification whatsoever for the charges. The trustees were selected with great care by the District Judge, and there is every reason to believe that they will successfully discharge the responsibilities imposed upon them. It is significant that the Committee for the Preferred Stockholders stands alone in this appeal and that they are actively opposed by debenture holders of the corporation and by the Securities & Exchange Commission.

The order of the District Court is affirmed.