representatives of the great bulk of the security-holders participated. The trustees who will be designated in the plan have the overwhelming support of the security-holders' representatives. In view of these precautions, I think it would do more harm than good to open the door to attacks on individual trustees.
5. The Carter-Gregory Committee has objected to the plan's exculpatory clause applying to the voting trustees. This matter has become academic since the voting trustees will serve as directors and will be subject to all judiciary responsibilities accordingly.
6. The Carter-Gregory Committee proposes that the Compensation of the voting trustees be reduced from $ 3,000 each per annum to $ 2,000. This proposal is not supported by any other group, and is opposed by the Burns Committee. As already emphasized, the voting trustees are required to act as a responsible committee actively supervising the operation of the business, meeting frequently and concerning themselves continuously and intimately with its affairs. Having regard to the activity thus required, the calibre of the men designated below to be the voting trustees, and the benefits likely to be gained by their association, I find that the compensation provided in the plan is not unreasonable.
7. The Carter-Gregory Committee's suggested modifications of the paragraph relating to expenses of the voting trust are covered by the Trustee's amendments.
There remains the matter of designation of the voting trustees. The plan provides that the trustees shall be designated prior to its submission to the vote of the security-holders will know exactly who will be their trustees if they approve the plan.
To this end, and all security-holders were advised in the notice of the plan hearing that the voting trustees would be designated in the plan, and that nominations might be made by any party in interest at the plan hearing. This notice was given nearly a month in advance of the opening of the plan hearing and nearly two months before the last hearing.
After careful consideration of the nominations made, the Master has recommended the designation of Maurice A. Kendall, Laurence T. Howell and Harold Hogeland. Each of these nominees presents excellent qualifications, and together they make an unusually well-balanced group, which is of major importance.
Mr. Kendall, the present Trustee of the Debtor, received from the outset the unanimous endorsement of all parties in interest. He has proved an unusually conscientious and able Trustee, and in his five years of service in that capacity has obtained an extensive and intimate knowledge of the Debtor's affairs and problems that will be essential to the intended functions of the voting trust.
Mr. Howell is president of one of the largest 'dry' warehousing corporations in the Philadelphia area, an enterprise very similar to cold storage but not in competition with it. His experienced knowledge of warehousing and his contacts among the customers of the industry are of great importance.
Mr. Hogeland is vice-president of a large Philadelphia banking institution in direct charge of its highly developed commodity loan department. Commodity loans, and the storage of commodities subject to such loans, are of major importance to a cold storage business. Mr. Hogeland has expert knowledge and important contracts in that field, as well as wide general financial experience.
Both Mr. Hogeland and Mr. Howell were from the start recommended by large groups of security-holders. Three other nominations were made. The Burns Committee and the Carter-Gregory Committee strongly pressed their claims to nominate members of their committees to the voting trust panel. The petitioning creditors also nominated Mr. Paul Hicks. But the situation has been crystallized and clarified, following conferences with the court, by the Burns Committee's voluntary withdrawal of its strong and justifiable claim to direct representation on the trust, in favor of the well-balanced panel recommended by the Master, which the Committee concluded would best serve the diverse needs of the new company. In so acting, the Burns Committee afforded a remarkable demonstration of disinterested and sincere purpose, for which it deserves the commendation and appreciation of all concerned.
In view of the action of the Burns Committee, the petitioning creditors in the same spirit withdrew the nomination of Mr. Hicks, and joined in the Master's recommendations. The nominees so recommended have accordingly now received the solid support of the representatives of 75 per cent of the bondholders. Under those circumstances, in view of the action taken by the Burns Committee and the excellent and desirable qualifications of the nominees so supported, I designate Messrs. Kendall, Howell and Hogeland to be the voting trustees under the plan.
Pursuant to the withdrawal of its request to direct representation on the voting trust, the Burns Committee has proposed that the plan be amended to provide that the board of directors of the reorganized company shall consist of the three voting trustees, Mr. Burns and Mr. Kirkland (members of the Burns Committee) and two other members to be designated later by the court. The Committee also proposes that the voting trustees shall keep a record of their meetings and of action taken or agreed upon by them, such record to be available to directors; that the voting trustees meet with directors on request; that the board of directors hold stated monthly meetings and the members receive compensation of $ 25 per meeting and traveling expenses if non-residents of Philadelphia.
It is in the highest degree desirable that the bondholders have direct representation on the board of directors through their selected representatives, Mr. Burns and Mr. Kirkland, representing nearly half the bondholders, are logical and desirable choices to serve this purpose, and both are excellently qualified to make valuable contributions to the administration of the new company. The further suggestions mentioned are appropriate and desirable, and all of the amendments so proposed are accordingly approved.
Except to the extent stated above, the exceptions filed to the Master's report are dismissed and the Trustee's plan of reorganization will be approved subject to the amendments herein adopted.
On notice to all counsel, the Trustee will submit appropriate formal amendments to the plan and a form of order of approval.