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In re A.C. Hotel Co.

December 8, 1937

IN RE A.C. HOTEL CO. BURMEISTER ET AL.
v.
A.C. HOTEL CO.



Appeals from the District Court of the United States for the Eastern District of Wisconsin; Ferdinand A. Geiger, Judge.

Author: Evans

Before EVANS and SPARKS, Circuit Judges, and LINDLEY, District Judge.

This appeal is unique in that there is no opposition to the relief sought by the appellants, whose amended plan of reorganization was rejected by the court though favored by substantially all of the security holders.

Two appeals, one allowed by the District Court and one by this court, seek a reconsideration of the proposed plan and its approval is asked because it is not only the best possible plan that has been presented, but it carries the approval of security holders interested therein. The attorney for the debtor seemingly acquiesces in this statement, or at least has indicated no opposition to the merits of the plan or to its adoption. The only parties vitally interested who have appeared are the appellants who are members of a committee representing a substantial number of first mortgage bondholders and junior creditors.

The debtor is a Wisconsin corporation which owns and operates a hotel in Milwaukee, Wisconsin. It holds title to real estate upon which an eight story apartment hotel has been erected which is fully furnished and equipped. Loaded with debts it was unable to meet its obligations and foreclosure of a mortgage on it was instituted in the state court. A foreclosure decree followed. Debtor filed its petition under 77B in the United States District Court where it was considered and approved as properly filed. This was in 1936.

One plan of reorganization was submitted, but it failed to secure the court's approval. An amended plan was thereupon presented, which is the one before us. No objections to its adoption were made by any creditor, of the necessary percentage of security holders. The instant appeals are from the order of the court rejecting this plan, refusing leave to file modifications to the plan, and dismissing the proceedings.

The debt and financial structure of the debtor are as follows:

First Mortgage 6% Real Estate

Gold Bonds $294,000.00

Unpaid Interest thereon from

July 26, 1931

Second Mortgage 7% Real Es-

tate Gold Bonds ...


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