Opinion
No. 25.
December 30, 1940.
Appeal from District Court of the United States for the Southern District of New York.
Motion by Cost Vendramis, petitioner, against the Sword Steamship Line, Inc., debtor, in a proceeding wherein the debtor filed a petition for reorganization under the Bankruptcy Act § 77B, 11 U.S.C.A. § 207. From an order denying the motion of petitioner Cost Vendramis, a stockholder of the debtor, Sword Steamship Line, Inc., for the appointment of an examiner to investigate and report as to alleged misconduct of officers and directors of the debtor, Cost Vendramis appeals.
Affirmed.
See, also, 116 F.2d 665.
Arthur Abrams, of New York City (Maurice V. Seligson, of New York City, of counsel), for appellant Vendramis.
Arthur G. Syran, of New York City, for debtor-appellee Sword S.S. Line, Inc.
Before L. HAND, AUGUSTUS N. HAND, and CHASE, Circuit Judges.
The Sword Steamship Line, Inc., debtor-appellee, filed a petition for reorganization under § 77B of the Bankruptcy Act, 11 U.S.C.A. § 207. The next day the court made an order allowing the debtor to remain in possession and appointing one Emory Sexton as cotrustee. Vendramis, a minority stockholder of the debtor, moved for the appointment of an examiner pursuant to Section 168 of the Bankruptcy Act, 11 U.S.C.A. § 568, alleging that Gregory Ferend, the president of the debtor, had been guilty of irregularities which ought to be investigated. Sexton, the cotrustee, filed an answering affidavit setting forth that he had made an investigation and could discover no irregularities. Furthermore it was shown that Price Waterhouse Co. had been employed at the instance of a large creditor to examine the books and had found everything in order. On this showing the court denied the motion for the appointment of an examiner and from the order of denial this appeal was taken.
We can see no reason for appointing an examiner where there is a trustee who is not shown to have been derelict in his duty. We regard Section 168, which provides for the appointment of "an examiner with the powers of investigation of a trustee", as indicating on its face that it was intended to cover cases where a trustee had not been appointed. In re Philadelphia Reading, etc., Co., 3 Cir., 105 F.2d 354, 355. Referring to Section 168 the court said, 105 F.2d at page 355: "It is quite clear * * * that Chap. X [11 U.S.C.A. § 501 et seq.] does not contemplate the appointment of both officials in the same proceeding. * * *"
Order affirmed.