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RFC V. BANKERS TRUST CO., 318 U. S. 163 (1943)

U.S. Supreme Court

RFC v. Bankers Trust Co., 318 U.S. 163 (1943)

Reconstruction Finance Corporation v. Bankers Trust Co.

Nos. 387-388

Argued January 8, 1943

Decided February 8, 1943

318 U.S. 163


1. The term "debtor's estate" as used in § 77(c)(12) of the Bankruptcy Act embraces cash deposited with an indenture trustee. P. 318 U. S. 167.

2. The services and expenses of the indenture trustee in this case were rendered and incurred "in connection with the proceedings and plan" of reorganization, within the meaning of § 77(c)(12) of the Bankruptcy Act. P. 318 U. S. 167.

3. Section 77(c)(12) of the Bankruptcy Act, which authorize, within such maximum as may be fixed by the Interstate Commerce Commission, an allowance out of the debtor's estate for reasonable expenses incurred in connection with the proceedings and plan of reorganization, and for reasonable compensation for services in connection therewith by trustees under indentures, held applicable to the claim here of an indenture trustee for services and expenses. P. 318 U. S. 167.

That the claim is based upon a provision of the indenture, is secured by a lien on the trust estate under the indenture, and is for services required by the indenture to be rendered the trust estate in fulfillment of the trustee's obligations does not render § 77(c)(12) inapplicable.

4. The function of the Interstate Commerce Commission under § 77(c)(12) of the Bankruptcy Act is that of a factfinding body. The bankruptcy court may not set aside the Commission's findings of fact when they are supported by the evidence, but may determine all questions of law. The only question of law which can arise with respect to a maximum amount fixed by the Commission is whether there is substantial evidence to support the Commission's finding. If there is not, the court may set aside the finding and refer the matter back to the Commission. The court's action upon the claim is appealable, independently of other issues, to the Circuit Court of Appeals. P. 318 U. S. 170.

Page 318 U. S. 164

5. As here construed and applied, § 77(c)(12) does not contravene Art. III, § 1 of the Federal Constitution, or the Fifth Amendment. P. 318 U. S. 168.

129 F.2d 122 reversed.

Certiorari, 317 U.S. 615, to review the affirmance of an order of the bankruptcy court making an allowance of expenses to a trustee under a mortgage of property of a railroad company in reorganization under § 77 of the Bankruptcy Act.

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