Protective Committee for Independent Stockholders of TMT Trailer Ferry, Inc. v. Anderson

PETITIONER: Protective Committee for Independent Stockholders of TMT Trailer Ferry, Inc.
RESPONDENT: Anderson
LOCATION: Telephone Booth

DOCKET NO.: 38
DECIDED BY: Warren Court (1967-1969)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 390 US 414 (1968)
ARGUED: Nov 07, 1967 / Nov 08, 1967
DECIDED: Mar 25, 1968

Facts of the case

Question

Media for Protective Committee for Independent Stockholders of TMT Trailer Ferry, Inc. v. Anderson

Audio Transcription for Oral Argument - November 07, 1967 in Protective Committee for Independent Stockholders of TMT Trailer Ferry, Inc. v. Anderson

Audio Transcription for Oral Argument - November 08, 1967 in Protective Committee for Independent Stockholders of TMT Trailer Ferry, Inc. v. Anderson

Earl Warren:

Protective Committee for Independent Stockholders of TMT Trailer Ferry Incorporated, Petitioner versus C.Gordon Anderson, Trustee.

Mr. Simmons, you may continue your argument.

William P. Simmons, Jr.:

Mr. Chief Justice, may it please the Court.

I would -- the issued that I will discuss first this morning is the issue concerning the employment of the trustee by the reorganized company.

The success of the trustee in operating the business of a data is best illustrated by the fact that when he took over in November of 1959 -- 1957, almost exactly 10 years ago, business was at a stand still.

The ships were not moving.

They were in bad need of repair and there was little hope for the business so everyone thought.

Under his able management, the business grew to the point where by 1964, the end of the -- or 1965, when we began by the end of 1965, when we began to consummate the present plan of reorganization, the business was able to pay off in cash over $1,500,000 in claims being all of the preferred claims and all of the secured claims.

Of this sum, about $1,100,000 went to the United States Government for its tax and nontax claims.

And of -- and $250,000 went to the -- to pay off the Caplan mortgage, the compromise of the Caplan mortgage claim.

This -- the payment of this large sum of money to pay off all of these claimants in these two categories, did not come out of the earnings of the business.

Most of it came from a loan of $1,250,000 that the reorganized company was permitted by the Court to make from a bank in Florida, a long-term loan which reorg --

Earl Warren:

How much came out of the earnings?

William P. Simmons, Jr.:

The rest of it came out of the earnings.

Earl Warren:

What was the rest of it?

Who said --

William P. Simmons, Jr.:

The total of the claims was -- in excess of $1,500,000, so of that sum approximately between $250,000 and $300,000 came out of the earnings of the data.

Earl Warren:

In the 10 years.

In the --

William P. Simmons, Jr.:

Yes Your Honor.

Earl Warren:

-- ten years?

William P. Simmons, Jr.:

The earnings had been a great deal more than that.

Most of the earnings had been plowed back in to the business to purchase new or purchase more LST's.

When the trustees took over, they were operating only three of these old World War II LST's.

During his tenure, they have purchased and converted two more of the LST's so they're operating five.

And most of the earnings of the business during that period of time had to be plowed back into additional assets.

So it was inevitable, almost inevitable that persons who were interested in inquiring this company upon reorganization would want to retain the services of -- the good services of this trustee, and so it was has it been emphasized in all of the briefs.

All of the plans of reorganization have contemplated the retention of the services of this trustee.

The present plan of reorganization, this internal plan which I have described to the Court, was prepared by the committee appointed by the District Judge to represent the unsecured creditors as a class.

This committee -- the larger creditors of course were represented by their own counsel.