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COLUMBIA GAS & ELECTRIC CORP. v. AMERICAN FUEL & POWER CO. ET AL.

decided: May 22, 1944.

COLUMBIA GAS & ELECTRIC CORP
v.
AMERICAN FUEL & POWER CO. ET AL.



APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF KENTUCKY.

Stone, Roberts, Black, Reed, Frankfurter, Douglas, Murphy, Jackson, Rutledge

Author: Per Curiam

[ 322 U.S. Page 379]

 This is an appeal from a judgment of the District Court directly to this Court, taken under § 2 of the Expediting

[ 322 U.S. Page 380]

     Act of February 11, 1903, 32 Stat. 823, as amended, 15 U. S. C. § 29. The United States, as an intervenor in the District Court and appellee here, has moved to dismiss the appeal as unauthorized by the Expediting Act.

Separate proceedings were brought in bankruptcy in the District Court under Chapter X of the Bankruptcy Act for the reorganization of the three appellee debtors, American Fuel and Power Company, and two of its subsidiaries, Inland Gas Corporation and Kentucky Fuel Gas Corporation. Appellant Columbia Gas & Electric Corporation filed its proofs of claim in the reorganization proceedings as the owner and holder of stock, and of notes and bonds and open accounts of the debtors.

The District Court, on application of the debtors' trustees, entered an order in the bankruptcy proceedings approving a proposed compromise settlement of all of appellant's claims against the debtors. On appeal by certain creditors the Circuit Court of Appeals for the Sixth Circuit reversed. 122 F.2d 223. It held that the facts of record disclosed that appellant Columbia's stock and money claims against the debtors had been acquired and used by it to secure control of them in violation of the Sherman and Clayton Anti-Trust Acts and were consequently not provable or allowable claims in a bankruptcy reorganization. It accordingly remanded the cause to the District Court with instructions that all claims against the debtor, which Columbia had acquired in violation of the federal anti-trust laws, be rejected. But its opinion pointed out that appellant had not appeared in the proceeding in the District Court for the approval of the proposed compromise and it was consequently not bound by the appellate court's findings of fact in that proceeding.

After the remand the District Court granted the application of the United States to be allowed to intervene in the bankruptcy proceedings. The United States' petition for intervention asserted that it was concerned in arresting

[ 322 U.S. Page 381]

     any action of the bankruptcy court which might tend to defeat or curtail the relief to which it might be entitled in a pending equity suit which it had brought against appellant in the District Court for Delaware. The purpose of this latter suit was to restrain appellant from violations of the anti-trust laws by the control of the debtors through the acquisition and holding of the same stock and money obligations, as are the subjects of appellant's claims in this proceeding.

The United States, as intervenor, and certain creditors filed objections to the allowance of appellant's claims in bankruptcy. The proceedings on the claims were consolidated for hearing and after a trial in which appellant participated, the District Court found that appellant had acquired and used the subjects of its claims in the prosecution of a conspiracy to acquire control of the debtors in violation of the anti-trust laws. It gave judgment rejecting appellant's claims as not provable or allowable in bankruptcy. From this judgment appellant has taken the present appeal to this Court under § 2 of the Expediting Act. It has also appealed to the Court of Appeals for the Sixth Circuit.

Section 2 of the Expediting Act, as found in 15 U. S. C. § 29, provides, "In every suit in equity brought in any district court of the United States under sections 1-7 or 15*fn1 of ...


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