An application by a subsidiary of a registered holding company pursuant to Section 6 (b) of the Act with respect to the issue and sale of debt securities for the purpose of retiring outstanding debt and the issue and sale of common stock to the parent in exchange for securities of associate company, the issue and sale having been expressly approved by the appropriate State Public Utility Commission, granted... Page 761.

Application for exemption, under the third sentence of Section 6 (b) of the Public Utility Holding Company Act of 1935 from the requirements of Sections 6 (a) and 7 of the Act, of the issue and sale by a subsidiary of a registered holding company of First Mortgage Bonds, granted, subject to certain reservations of jurisdiction, the Commission finding that such issue and sale are solely for the purpose of financing the business of the subsidiary and that such subsidiary is not a holding company, a public-utility company, an investment company or a fiscal or financing agency of a holding company, a public-utility company or an investment company... Page 719.

Application by a subsidiary of a registered holding company pursuant to Section 6 (b) of the Public Utility Holding Company Act of 1935 for exemption from the provisions of Section 6 (a) of the Act of the issue and sale of bonds and preferred stock at competitive bidding, such issue and sale being solely for the purpose of financing the business of the applicant, granted, subject to certain terms and conditions, when such issue and sale have been expressly authorized by the State Commission of the State in which such applicant is organized and doing business... Page 539.

Joint applications-declarations of registered holding company and its subsidiaries regarding issuance and sale by the subsidiaries of additional bonds and common stocks for the purpose of financing their construction requirements and the acquisition of such common stocks by the parent company granted and permitted to become effective... Page 569.

Application by public utility subsidiary of a registered holding company under Section 6 (b) for exemption from the requirements of Sections 6 (a) and 7 of the Public Utility Holding Company Act of 1935 with respect to the issue and sale at competitive bidding of First Mortgage Bonds and the issue and sale of common stock pursuant to a preemptive offer to its stockholders granted, subject to certain conditions and reservations of jurisdiction, the Commission finding that the issue and sale of such securities are exempt under the third sentence of Section 6 (b) of the Act as being solely for the purpose of financing the business of the subsidiary provided that the issue and sale of such securities are expressly authorized by the State Commission of the State in which the subsidiary is organized and doing business... Page 621. Application pursuant to Section 6 (b) or alternatively declaration pursuant to Section 7 of the Act by a public utility subsidiary company regarding the issue and sale of additional shares of its common stock to its parent for the purpose of financing, in part, its current construction expenditures, considered as a declaration filed pursuant to Section 7 of the Act, and permitted to become effective pursuant to Section 7 of the Act... Page 312.

Application for exemption pursuant to Section 6 (b) of the Act by a public utility subsidiary company regarding the issue and sale of additional shares of its common stock to its parent for the purpose of financing, in part, its current construction expenditures, granted, the Commission finding that the issue and sale are solely for the purpose of financing the business of the applicant, and have been expressly authorized by the Commission of the State in which such subsidiary is organized and doing business... Page 312.

Application by public utility subsidiary of registered holding company, pursuant to Section 6 (b) of the Act for exemption from the provisions of Section 6 (a) thereof; with respect to the issuance and sale, at competitive bidding, or $5,000,000 principal amount of First and General Mortgage Bonds, Series Q.--%, due 1978, such issue and sale being solely for the purpose of financing the business of the subsidiary and having been authorized by the State commission of the State in which the subsidiary is organized and doing business, granted, subject to certain terms and conditions... Page 284.

EVIDENCE

PRACTICE AND PROCEDURE

In proceeding under Section 11 (b) (2) of the Public Utility Holding Company Act of 1935 with respect to a public-utility company, held that testimony with respect to the company's reasonably expected earnings and the true value of its assets were not relevant to the issue presented by the Section 11 (b) (2) proceedings but were matters to be determined in subsequent proceedings in connection with the fairness of specific plans for compliance with Section 11(b) (2).. Page 482.

SALE OF SECURITIES BY REGISTERED HOLDING

COMPANY

Declaration filed by a registered holding company regarding the sale of its entire holdings in its subsidiary public utility holding company, consisting of 56% of the latter's outstanding common stock, to investment banking company denied effectiveness... Page 401.

Where registered holding company had been ordered to dissolve pursuant to the provisions of Section 11 and pending action on a plan for distribution of assets in compliance with such order certain of its subsidiaries required cash equity investments in order to meet construction requirements, declaration by such holding company regarding negotiated sale of 25% of its holdings of all of the common stock of one of its subsidiary public utility companies to provide, in part, cash to make such equity investments, permitted to become effective, subject to conditions that the price and terms and conditions of the sale are found to satisfy the standards of Section 12 (d) ... Page 1.

Sale by a registered holding company and certain subsidiary utility companies thereof to another subsidiary utility company in the same holding company system of the common stock and notes of a non-utility associate company, approved, the Commission observing no basis for adverse findings under Section 12 (f) of the Act or Rule U-43 promulgated thereunder... Page 711.

Declaration regarding the sale by a registered holding company of a substantial portion of the common stock of a subsidiary in order to comply with provisions of a plan heretofore approved by the Commission pursuant to Section 11 (e) of the Act permitted to become effective... Page 847.

An application-declaration by a registered holding company, pursuant to Sections 12 and 10 of the Public Utility Holding Company Act of 1935 regarding the disposition by it of its security interests in a subsidiary company in exchange for new securities in a company into which former subsidiary is to be merged, granted and permitted to become effective... Page 761.

SIMPLIFICATION OF HOLDING COMPANY SYSTEM

ALLOWANCE OF FEES AND EXPENSES

In passing upon applications for fees and expenses in connection with plan of reorganization previously approved under Section 11 (e) of the Act, consideration will be given to the contribution and benefit to the reorganization conferred by the services rendered by each applicant, the difficulty, novelty and importance of the problems involved, the time required to be spent in rendering services, experience and ability of applicant, and duplication of efforts... Page 935.

Applications by indenture trustee, its counsel and expert for fees and expenses granted in reduced amount, the Commission finding that the services rendered were valuable but time expended was excessive and part of services rendered by trustee duplicated those of its expert... Page 935.

In passing upon applications for fees and expenses in connection with plan of reorganization previously approved under Section 11 (e) of the Act, consideration will be given to the contribution and benefit to the reorganization conferred by the services rendered by applicants ... Pages 653, 897.

Applications of preferred stockholders committee and its counsel for fees and expenses granted, the Commission finding that the committee and its counsel were instrumental in effecting modifications in the plan originally proposed and that the amounts requested were reasonable... Pages 266, 382.

Application by counsel for individual security holders granted, the Commission finding that counsel's services, although limited, contributed to the final result achieved... Page 382. In passing upon applications for fees and expenses in connection with plan of reorganization previously approved under Section 11 (e) of the Act, consideration will be given to the contribution and benefit to the reorganization conferred by the services rendered by applicants ... Pages 653, 897.

Applications of debenture holders committee and preferred stockholders committee and their counsel for fees and expenses granted, the Commission finding that the committees and their counsel were instrumental in effecting defeat of plan originally proposed and in the formulation of plan ultimately approved and th the amounts requested were reasonable... Page 897.

302972 O-55-63

Application for reimbursement of fees and expenses paid by company formerly under control with reorganized company granted, the Commission finding that the services rendered by the company's representatives contributed to the general development of the plan and were of benefit to the reorganization and where company seeking reimbursement exercised no control over reorganized company ... Page 897.

In passing upon applications for fees and expenses in connection with plan of reorganization previously approved under Section 11 (e) of the Act, consideration will be given to the contribution and benefit to the reorganization conferred by the services rendered by applicants... Page 266.

In passing upon applications for fees and expenses in connection with plan of reorganization previously approved under Section 11 (e) of the Act, consideration will be given to the contribution and benefit to the reorganization conferred by the services rendered by applicants ... Page 382.

Applications of common stockholders committee and its counsel for fees and expenses granted, the Commission finding that the committee and its counsel were instrumental in effecting defeat of a plan originally proposed and in the formulation of plan ultimately approved and that the amounts requested were reasonable... Page 653.

Applications by counsel for individual security holders granted, the Commission finding that the services rendered contributed to the general development of the plan and were of benefit to the reorganization... Page 653.

Where applicant's participation in the proceedings is for purpose of protecting special interests and services rendered make no contribution to the plan or the proceedings, application for allowances will be denied... Page 653.

FAIR AND EQUITABLE STANDARD OF SECTION 11 (e)

The Commission having previously approved plan submitted pursuant to Section 11 (e) for liquidation of public utility company and elimination of preferred stock by immediate payment in cash of liquidation preferences, and jurisdiction having been reserved over what additional sums, if any, should be paid out of escrow fund to holders of the preferred stock, held, that fairness and equity require that two series of preferred stock be paid additional amounts equivalent to their respective call prices and additional payments approved and ordered... Page 661.

Plan filed pursuant to Section 11 (e) of the Act to retire all outstanding preference stock by giving in exchange for each preference stock by giving in exchange for each preference share a package of portfolio securities and cash, held, fair and equitable to the persons affected thereby, the package adequately compensating preference stockholders and affording them the equitable equivalent of the rights surrendered... Page 347.

Where amount of claims against holding company based on rights acquired in previous merger under the Act has been determined by the Commission in the merger proceeding and upheld on judicial review, held, liquidation plan providing for payment of claims in amount determined in the merger proceeding is fair and equitable, no basis for reconsidering or modifying such determination having been shown... Page 174.

Where Commission's previous approval of the plan filed under Section 11 (e) was based on a finding, among other things, that certain dividend preference was not cumulative and enforcement court concludes that such dividend preference was cumulative but did not necessarily make proposed allocations unfair and remands the plan to the Commission for reconsideration in the light of its opinion, upon reconsideration, held, previous order of Commission reaffirmed, the Commission finding that its previous determination that allocations were fair and equitable is not affected by a determination that the right to cumulative dividends and a claim for a passed quarterly dividend and interest thereon attached to the stock in question... Page 389.

Plan filed by registered holding company pursuant to Section 11 (e) of the Act providing for liquidation and dissolution of holding company by payment of outstanding claims and pro rata distribution of assets among the holders of its single class of stock, held, necessary to effectuate the provisions of Section 11 (b) of the Act and fair and equitable to the persons affected thereby... Page 174.

Where holders of claims against holding company whose assets are to be distributed among security holders pursuant to Section 11 (e) liquidation plan evidence intent to seek judicial review of plan with respect to its proposed treatment of such claims and another claimant seeks to establish claims against the holding company in the liquidation proceedings and prompt distribution of portfolio assets to stockholders is desirable, held, it is appropriate that provision be made in the plan for immediate distribution of assets not needed to satisfy such

claims and for immediate severable court enforcement of such partial distribution... Page 174.

Where plan filed by a subsidiary of a registered holding company under Section 11 (e) of the Act provided for the retirement of outstanding bonds by payment of cash in the principal amount of the bonds plus accrued interest, but without redemption premium; the payment in satisfaction of publicly held preferred stock of specified amounts in cash in satisfaction of their claim; the exchange of certain outstanding securities held by the parent company and by public common stockholders for new common stock; and the cancellation of outstanding common stock held by the parent company, held, in view of the asset and earnings coverage, the investment character of the securities, and other circumstances of the case, that the plan, in its provisions for such payments, exchanges and cancellation of securities, was fair and equitable... Page 415.

Where the Commission has previously approved a plan of a registered holding company providing for the distribution to holders of preferred stocks of cash in partial reduction of arrears and of stated capital and for the modification of the rights of preferred stockholders subject to such adjustments, if any, which the Commission subsequently determines to be fair and equitable, and where such registered holding company files a plan for retiring the preferred stocks and for a cash distribution to the common stock, held, under the circumstances of the case, that the latter plan would be fair and equitable if amended to provide for certain additional payments to the preferred stocks... Page 229.

Where registered holding company has filed a plan pursuant to Section 11 (e) of the Act, and a stockholder has filed an alternative plan pursuant to Section 11 (d) and the company's plan is found to be necessary to effectuate the provisions of Section 11 (b) and fair and equitable to the persons affected thereby, held, the Commission will not reject the company's plan and adopt the stockholder's plan unless the latter plan demonstrates that the company's plan is unfair and inequitable or is otherwise deficient under the Act... Page 347.

Where plan providing for retirement of outstanding bonds of subsidiary of registered holding company offered bondholders an alternative of receiving a portion of their claim in preferred stock of another utility company in lieu of cash, and where the market price of the securities proposed to be offered under such option had since the filing of said plan decreased so that it was at the time of passing upon such plan substantially less than the amount otherwise receivable by the bondholders, held that the option provision of the plan as proposed would be approved as fair and equitable, subject to a change in the amount of stock receivable under the option appropriate under the circumstances... Page 415.

NECESSITY AND FAIRNESS

Where the Commission has previously approved plans of a registered holding company providing, among other things, for the retirement of all of its senior securities, and has found that the holding company should be liquidated and dissolved, and where such holding company files a plan for the sale of all the outstanding securities of one of its subsidiaries and for the distribution of substantially all the proceeds thereof to the holders of common stock of the holding company, held, that the latter plan is necessary to effectuate the provisions of Section 11 (b), and fair and equitable... Page 451.

Where subsidiary of registered holding company, engaged in the transportation business, had outstanding substantial amount of senior securities, including bonds and preferred stock in amounts which the Commission found to exceed those appropriate to the capital structure of the company in the light of its assets and earnings, and on the basis of all the circumstances, and where preferred stock dividends had been in arrears for approximately 30 years, held that a plan filed under Section 11 (e), providing for retirement of the bonds and reclassification of the stock into a single class of common stock, was necessary under Section 11 in order to correct an unfair and inequitable distribution of voting power... Page 415.

Where a registered holding company's corporate structure, consisting of preferred stocks with substantial dividend arrearages and common stock, unduly complicates the structure of its holding company system and unfairly distributes voting power among its security holders, held, plan for retirement of the preferred stocks and for liquidation of the holding company, including a cash distribution to the common stockholders, if necessary to effectuate the provisions, of Section 11... Page 229.

Where the Commission has previously approved plans of a registered holding company providing, among other things, for the retirement of all its senior securities, and has found that the holding company should be liquidated and dissolved, and where such holding company files a plan for the sale of all its investments in its remaining subsidiaries, held, under the

circumstances of the case, that the sale meets the standards of Section 12 (d) of the Act and that the plan proposing the sale is necessary to effectuate the provisions of Section 11 (b) and is fair and equitable... Page 861.

Where registered holding company which has been ordered by the Commission under Section 11 (b) (2) of the Act to change its capitalization to one class of common stock and to cease to be a holding company, files a plan pursuant to Section 11 (e) providing for retirement of all outstanding preference stock by the mandatory exchange therefor of a package of portfolio securities and cash, held, plan is necessary to effectuate the provisions of Section 11 (b) ... Page 347.

Plan and amendments thereto filed pursuant to Section 11 (e) of the Act by a registered holding company providing for the dissolution of the holding company and for its complete liquidation through the retirement of all outstanding preferred stock by the mandatory exchange therefor of a package of portfolio securities and cash and the distribution of the remaining assets of the holding company to its common stockholders, held, necessary to effectuate the provisions of Section 11 (b) of the Act and fair and equitable to the persons affected thereby... Page 776.

Plan filed by registered holding company pursuant to Section 11 (e) of the Act providing for a partial distribution of its assets as an initial step in the dissolution of the company in compliance with the provisions of Section 11 (b), held, necessary to effectuate the provisions of Section 11 (b) of the Act and fair and equitable to the persons affected thereby... Page 399.

PRACTICE AND PROCEDURE

Proceedings in connection with application by registered holding company. and subsidiary relating to reclassification of authorized common stock of subsidiary fall within category of "rule making or determining applications for initial licenses" as defined in Sections 2 (c) and (e) of the Administrative Procedure Act and, accordingly, a recommended decision by the hearing officer may be dispensed with pursuant to Section 8 (a) of that Act... Page 757. Petition by registered holding company and certain of its subsidiary companies for rehearing and leave to adduce additional evidence in connection with the Commission's order issued in proceedings under Section 11 (b) of the Act denied, where petitioners presented no new arguments in support of rehearing, and Commission's Findings and Opinion and Order is consistent with prior decisions and based on application of established principles, and where it does not appear that the evidence sought to be adduced was not available at the hearings held in the proceedings... Page 139.

DISTRIBUTION OF VOTING POWER

When the entire voting control of a company, which, although a holding company, is principally a public-utility company, is vested in its common stock which, upon the basis of adjusted asset figures and historical earnings, has little or no equity in the assets or earnings of the company, and it appears that there are sizeable arrears on its preferred stock, held, the company will be ordered to recapitalize on the basis of a single class of common stock, such stock to be distributed to preferred and common stockholders in such respective proportions as may be determined to be fair and equitable... Page 482.

Where preponderance of voting power in registered holding company is possessed by classes of common stock which have no equity on a balance sheet basis, and there has been a continuous accumulation of arrearages on preferred stocks, which stocks, together with the debentures of the registered holding company, are in large part based upon junior equity securities of subsidiaries, and where the earnings of the system have been insufficient to support the corporate structure of the holding company, held, that the corporate structure of the holding company distributes voting power unfairly and inequitably among its security holders and among those of its system, and unduly and unnecessarily complicates the structure of its holding company system, and that the holding company should be required to change its preferred and common stocks to a single class of common stock... Page 553.

Where it is found that the corporate structure of a registered holding company unduly and unnecessarily complicates the corporate structure of the holding company system and unfairly and inequitably distributes voting power among the security holders of such system, and where it is found necessary as a step to effectuate the purposes of Section 11 (b) (2) that such holding company change its capitalization to a common stock basis or, at its election, liquidate its affairs and distribute its assets to security holders, held, under the particular circumstances of the case, that an order should be issued requiring such action to be taken and that, in the event such holding company elects to recapitalize, the Commission