to the Railroad Company by its attorneys in the Black Tom Explosion case.
Clause (6) of Section 725 of Chapter XV of the Bankruptcy Act, 11 U.S.C.A. § 1225(6), provides, inter alia, that before approving and confirming the plan of adjustment now before this court we must find that all amounts to be paid by the petitioners "for expenses, fees, reimbursement or compensation of any character whatsoever incurred in connection with the proceeding and plan, or preliminary thereto or in aid thereof, together with all the facts and circumstances relating to the incurring thereof, have been fully disclosed to the Court," and that all such amounts or consideration are fair and reasonable. It is further provided that except with the approval of the court no such amounts or consideration shall be paid. An examination of the Plan of adjustment filed in this proceeding reveals that it does not deal with the sums sought to be recovered in the Black Tom Explosion case nor with the compensation to be paid counsel in respect thereof. Indeed the plan was prepared and filed some time before the award of the Mixed Claims Commission was made and when it was not known whether any recovery would be had. It is thus clear that the amounts to be paid to Peaslee in connection with the Black Tom Explosion case are not for services and expenses incurred in connection with the proceeding and plan, or preliminary thereto, or in aid thereof. Consequently this court is not authorized or required under Clause (6) of Section 725 to determine the fairness and reasonableness of such amounts or to approve their payment.
It is clear that under the provisions of the Settlement of War Claims Act of 1928 to which we have referred the determination of the fair and reasonable allowance to be made to Peaslee in the Black Tom Explosion case has been entrusted to a special statutory tribunal, the American Commissioner of the Mixed Claims Commission, who has the advantage of having heard and considered all of the testimony in the case and observed the services rendered by counsel therein. In the light of the limitations contained in Clause (6) of Section 725 of the Bankruptcy Act we think it clear that this court does not have jurisdiction to fix or approve the amount payable to Peaslee for his services and expenses in the Black Tom Explosion case. If it were otherwise and we had discretionary jurisdiction in the matter we should hesitate to exercise it in view of the fact that the jurisdiction of the American Commissioner has been invoked and he has accepted it.
Before we finally approve and confirm the plan of adjustment filed in this case, Clause (3) of Section 725 of the Bankruptcy Act requires that we must find that the plan is fair and equitable as an adjustment and affords due recognition to the rights of each class of creditors and stockholders. In considering these questions it is obvious that the court will have to take into consideration so important an asset as the net amount to be recovered in the Black Tom Explosion case. If it should then appear that the Railroad Company in the proceeding before the American Commissioner for the fixing of fees, by its acquiescence in the claim of its counsel and its failure to present such evidence and argument as may be available to show that his claim is excessive, has prevented the American Commissioner from arriving at a just determination of the fee so that by reason of the allowance of an excessive fee the amount of the Railroad Company's recovery will be unduly reduced, it may well become the duty of this court to give consideration to the fairness and reasonableness of the fees in considering whether the plan of adjustment is to be approved as fair and equitable. The court realizes that the Railroad Company by reason of its voluntary agreement with its counsel may be somewhat reluctant to contest the amount of his fee. The Settlement of War Claims Act of 1928, however, clearly contemplates that Peasless's fee is to be only what is reasonable, regardless of the agreement. We think it is the duty of the Railroad Company to its security holders to take full advantage of the provisions of the act. We will accordingly expect the Railroad Company to present to the American Commissioner all available relevant evidence and arguments in order that a proper determination may be made by him.
An order will be entered dismissing the petition of Greydon A. Rhodes and discharging the rule heretofore entered.
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