The opinion of the court was delivered by: WATSON
The following is the opinion of Levy, Special Master:
The instant matter comes up on the filing of an application by E. McLain Watters, Trustee of the Lackawanna and Wyoming Valley Railroad Company, debtor, (hereinafter called 'Trustee') praying for authority to enter into a written agreement with the Pompey Coal Company (hereinafter called Pompey) and the Erie Railroad Company (hereinafter called Erie1 under the terms of which certain coal refuse is to be sold to the Pompey Coal Company for the price of 81 cents per ton. The petition avers that included among the assets of the debtor is a certain leased property known as the No. 6 Brach. This property is under a lease to the debtor from Erie. It however was abandoned by the debtor many years ago. Situate on the roadbed of the leased property are indeterminate quantities of coal refuse and culm fill of no benefit to the debtor in the operation of the Railroad. Various offers have been received by the debtor from coal operators to purchase the coal refuse. Erie has asserted a claim of ownership to this property and has refused to permit sale of the coal except upon terms approved by it. Erie wants to sell the refuse to Pompey and the debtor has agreed to the sale and to a division of the proceeds between Erie and the debtor. A contract for the sale of the coal refuse has been executed subject to approval by the Court.
Hearing was held on September 18, 1950, in the United States Court House at Scranton, Pennsylvania, to consider the above petition. Testimony was heard from E. McLain Watters, Trustee of the Debtor, Robert H. Boykin, Superintendent of the Jefferson and Wyoming Division of the Erie Railroad Company. Several coal operators were present or represented by Counsel and letters from them were incorporated in the record of the proceedings.
An affidavit of service of the Master's Order fixing the time and place and purpose of the hearing was filed and showed service thereof upon the Guaranty Trust Company of New York and the Pennsylvania Company for Banking and Trusts, Philadelphia, Pa., Norris, Bell, Lex, Hart and Eldredge, Philadelphia, Pa., Attorneys for 1st Mortgage Protective Bondholders Committee, Nemerov & Shapiro, Attorneys for the Schallitz Bondholders Committee, Paul Simon, Esq., of New York City, A. Albert Minton, Esq., of New York City, and Geist E. Netter, Esq., Attorney for Debenture Bondholders Committee. Affidavits of the publication of notice in the Scranton Tribune, Scranton, Pa., Scranton Times, Scranton, Pa., and the Lackawanna Jurist, Scranton, Pa., were also filed.
Appearances were entered by E. McLain Watters, Jr., Esq., and Norman Harris, Esq., counsel for the Trustee; Walter W. Harris, Esq., counsel for the Guaranty Trust Company of New York; Ellis Berger, Esq., counsel for the Meadowside Coal Company, and Charles Volpe for the Gateway Coal Company.
The testimony supports the material factual averments of the petition, and from the testimony the Master makes the following
1. E. McLain Watters is Trustee in Reorganization of the property of the Lackawanna and Wyoming Valley Railroad Company, Debtor, in the foregoing proceedings for the Reorganization of the Railroad. Mr. Watters was appointed by order of Court dated July 18, 1949. The appointment was approved by the Interstate Commerce Commission shortly prior to December 1, 1949, and Mr. Watters qualified and has been acting as Trustee since December 1, 1949.
2. Included among the assets of the debtor is a leased property known as the No. 6 Branch. This property formerly very well known as the Old Gravity Railroad had had on it the roadbed which was made up of culm and coal and was leased on October 27, 1903 by the Erie and Wyoming Valley Railroad Company (now known as the Erie Railroad Company) to the debtor for a term of over 900 years.
3. The property so leased originally consisted of the railroad line together with roadbed and property contiguous thereto.
4. The No. 6 Branch has been abandoned by the debtor pursuant to permission from the Pennsylvania Public Utilities Commission and Interstate Commerce Commission for a period of approximately 12 years. The tracks formerly situated thereon have been removed and the property 'was abandoned because it was unprofitable.'
5. There is situate on the roadbed certain material consisting of coal refuse or culm fill used originally as ballast for the roadbed of no use to the debtor but suitable for sale to operating coal companies.
6. Erie has asserted ownership in the coal refuse situated on the roadbed, and has refused to permit sale of the property except upon terms and conditions approved by it.
7. Various offers for the purchase of this coal refuse have been submitted to the debtor, all of which have been ...