versed the orders appealed from on other grounds, and stated "finally, there is no necessity to determine whether it was improper to contemplate making the trustee president of the reorganized company" (p. 453) because of mootness. Three Justices dissented, saying: “. . . the only question which could be thought even remotely to justify the presence of this case in this court is whether the trustee, by virtue of his office, was as a matter of law disqualified from being elected as president of the reorganized company." (p. 454). The dissenters felt that failure to decide that issue required dismissal of the writ as improvidently granted. 24 S.D. W. Va., No. 69–270. Previously reported in 34th Annual Report, p. 196; 36th Annual Report, pp. 194–195. 25 In re Federal Coal Company, 335 F. Supp. 1183, 1185 (S.D. W. Va., 1971). 26 S.D. N.Y., No. 65-B-365. 27 Caplin v. Marine Midland Grace Trust Company of New York, 406 U.S. 416 (1972). 28 S.D. Tex., 66-H-62. Previously reported in 35th Annual Report, pp. 163– 164. 29 Ernst & Ernst et al. v. U.S. Dist. Ct., 457 F.2d 1399 (C.A. 5, 1972). 30 S.D. Indiana, consolidated cases, Nos. IP-68-B-447 and IP-68-B-609. Previously reported in 36th Annual Report, pp. 176, 178-179; 34th Annual Report, pp. 144-145. 31 Infra, p. 32 In re Yale Express System, Inc., S.D. N.Y., No. 65-B-404, Corporate Reorganization Release No. 309 (January 14, 1972); In re Four Seasons Nursing Centers of America, Inc., et al., W.D. Okla., Bk-70-1008, 1008A-D, 1129, 1129A, Corporate Reorganization Release No. 310 (March 16, 1972); In re Imperial '400' National, Inc. (3 plans), D. N.J., No. B-656-65, Corporate Reorganization Release No. 312 (July 12, 1972). 33 In re Yale Express System, Inc., supra, Corporate Reorganization Release No. 311 (March 23, 1972). 34 In re American National Trust and In re Republic National Trust, S.D. Ind., Nos. IP-68-B-447, IP-68-B-609 (cases consolidated); In re Manufacturers' Credit Corporation, D. N.J., No. B1084-67; In re Phoenix Gems, Inc., D. Ariz., No. B-21072-Phx.; In re San Francisco & Oakland Helicopter Airlines, Inc., N.D. Calif., No. B-70-5175; In re Webb & Knapp, Inc., S.D. N.Y., No. 651B-365. 35 W.D. Okla., Bk 70-1008A-D, 1129, 1129A. Previously reported in 37th Annual Report, pp. 180-181. 36 S.D. N.Y., No. 65-B-404. Previously reported in 34th Annual Report, pp. 149, 153-154; 33rd Annual Report, p. 133; 32nd Annual Report, pp. 88-89. 37 The Commission said in its Supplemental Report: "We are not suggesting that the reorganized company should remain permanently under this bar. If management believes that pre-emptive rights should be modified to permit the issue of convertible securities, it can secure such modification by a vote of stockholders specifically directed to this proposal. We do not consider such modification a proper proposal for inclusion in the plan. Present security holders voting on the plan do not have the opportunity to address themselves to this specific feature of the plan. Their only alternatives are to vote for or against the plan in its entirety." 38 D. N.J., No. B-656-65. Previously reported in 36th Annual Report, p. 176; 35th Annual Report, pp. 161-162; 33rd Annual Report, pp. 132, 137-138; 32nd Annual Report, pp. 94-95. 39 Corporate Reorganization Release No. 312 (July 12, 1972). 39a S.D. Indiana, consolidated cases, Nos. IP-68-B-447 and IP-68-B-609. Previously reported in 36th Annual Report, pp. 176, 178-179; 34th Annual Report, pp. 144-145. 40 N.D. Calif., No. B-70-5175. 41 D. N.J., No. B-1084-67. Previously reported in 37th Annual Report, p. 182; 36th Annual Report, pp. 177-178; 34th Annual Report, p. 160. 42 S.D. N.Y., No. 65-365. Previously reported in 37th Annual Report, pp. 183, 193-194; 36th Annual Report, pp. 193194; 35th Annual Report, p. 170; 34th Annual Report, p. 150; 33rd Annual Report. pp. 131, 134. 43 D. Ariz., No. B-9352-Phx. Previously reported in 37th Annual Report, p. 187. 44 In re Maryvale Community Hospital, Inc. 456 F.2d 410 (C.A. 9, 1972). 45 D. Ariz., No. B-21072-Phx. 46 S.D. Fla., No. 3659-M-Bk-WM. Previously reported in 37th Annual Report, pp. 191-193; 36th Annual Report, pp. 179-180, 190-191; 35th Annual Report, p. 160; 34th Annual Report, p. 153; 33rd Annual Report, p. 135; 32nd Annual Report, pp. 92-93; 31st Annual Report, p. 100; 30th Annual Report, p. 105; and 29th Annual Report, pp. 91-92. 47 Protective Committee v. Kirkland, 434 F.2d 804 (C.A. 5, 1970), cert. den. 402 U.S. 907 (1971). 48 Protective Committee v. Wolff, 457 F.2d 100 (C.A. 5, 1972). 49 Protective Committee v. Mehrtens, 457 F.2d 104 (C.A. 5, 1972) cert. den. October 10, 1972. 50 No. 71-1610. 51 N.D. III., No. 70-B-5299. 52 C.A. 7, No. 72-1131. 53 D. D.C., No. 39-66. Previously reported in 35th Annual Report, pp. 164165. 54 In re Cosgrove-Meehan Coal Corp., 136 F.2d 3 (C.A. 3), cert. den. 320 U.S. 777 (1943). 55 D. N.J., No. 656-65. Previously reported in 36th Annual Report, p. 190. 56 In the Matter of Imperial '400' National, Inc., 432 F.2d 232 (C.A. 3, 1970). 57 456 F.2d 926 (C.A. 3, 1972). 58 S.D. N.Y., No. 71-B-291. Previously reported in 37th Annual Report, p. 179. 59 See 37th Annual Report, p. 198; 36th Annual Report, p. 197. 60 During the past year, the staff communicated with referees around the country requesting that it be notified of Chapter XI cases in which the proposed arrangements may involve this type of issue. 61 D. Mass., No. 70-1251. 65 S.E.C. v. Manor Nursing Centers, Inc., 340 F. Supp. 913 (S.D. N.Y., 1971), aff'd 458 F. 2d 1082 (C.A. 2, 1972). Debtor is the corporate successor to the original issuer. 66 D. Conn., No. 9038. 67 In re Posi-Seal International, Inc., 457 F.2d 237 (C.A. 2, 1972). The court said it was concerned whether the proceeding was properly brought under Chapter XI and said: "The brief of the Securities and Exchange Commission, which is scholarly and most helpful to the court supports the jurisdiction of the court below and found no error in the confirmation of the plan." PART 8 S. E. C. MANAGEMENT S.E.C. OPERATIONS REORGANIZATION The first major reorganization of the Commission's structure in thirty years became effective on August 7, 1972. The Commission now has five operating divisions instead of three. The Division of Trading and Markets was divided into a Division of Enforcement and a Division of Market Regulation. A new Division of Investment Company Regulation was spun off from the Division of Corporate Regulation. Investment Company disclosure activity was transferred to the Division of Corporation Finance and all enforcement activities were concentrated in the new Division of Enforcement. Thus, the major elements in the reorganization were the concentration of all investigative and enforcement activity in a single division, the focusing of all disclosure activity in a single division, and the creation of two regulatory divisions, one for broker-dealers and markets and the other for investment companies. Public-utility holding company and bankruptcy and reorganization functions remain in the Division of Corporate Regulation. A more detailed description of the reorganization appears in Part 1 of this report. OTHER CHANGES Executive Director The position of Executive Director was reestablished by the Commission in 133 |