a fair and feasible arrangement for all the creditors, including The Joscar Company.
29. Consolidated Sun Ray, Inc., Blauner's, Inc., and Hybla Valley Development Corp., as creditors and/or concessionaires of debtor, are threatened with imminent harm and irreparable damage by The Joscar Company, suit because their interest as creditors in the consummation of a fair and feasible arrangement is jeopardized, and because their position as concessionaires of debtor requires the continued, effective management of debtor's affairs.
CONCLUSIONS OF LAW
1. This Court has the jurisdiction and power to determine this dispute between third parties, and this Court has jurisdiction to issue an effective injunction beyond its territorial limits to restrain The Joscar Company's suit in New York, because the continuation of this suit will impair the exclusive jurisdiction of the bankruptcy Court and prevent the adoption of any plan of arrangement.
Central States Corp. v. Luther, 215 F.2d 38 (10Cir., 1954), In re International Power Securities Corp., 170 F.2d 399 (3 Cir., 1948), Reconstruction Finance Corp. v. Riverview State Bank, 217 F.2d 455, 459 (10 Cir., 1955), In re Burton Coal Co., 126 F.2d 447 (7 Cir., 1942).
2. This Court sits as a Court of Equity and is guided by equitable principles except when they are inconsistent with the bankruptcy act.
3. Continuation of The Joscar Company's New York litigation will impair the debtor's property rights in that the debtor's option to purchase certain of Joscar's realty is conditioned on the debtor's observance of the terms and conditions of the very lease upon which Joscar is basing its suit.
4. The Joscar Company's suit is for rental monies which it alleges are due on a property where Bargain City, U.S.A., Ic., is the exclusive tenant in possession. Therefore, this litigation necessarily involves a monetary judgment of debtor's responsibility for use and occupation. Such a determination is peculiarly within the jurisdiction of the bankruptcy Court.
5. The liability of Consolidated Sun Ray, Inc., Blauner's, Inc. and Hybla Valley Development Corp. to The Joscar Company, if any, under the lease can only be determined after the bankruptcy Court fixes the responsibility of the debtor, which is an indispensable party, for use and occupation of the premises, since the debtor has not disaffirmed the lease and has remained in possession of the leased premises.
6. The immediate effect wrought by The Joscar Company's suit would be to seriously embarrass and prevent the formulation of a successful arrangement for creditors, for without control over the debtor's primary assets, i.e., its various leases, the presentation of a satisfactory plan might as well be abandoned. Therefore, the imminent harm and irreparable injury threatened by such a suit calls for continuance of this Court's restraining orders.
7. The jurisdiction of this Court, in these Chapter XI proceedings, embraces assets of the debtor wherever situate and the determination of all controversies in relation thereto. In re International Power Securities Corp., supra.
8. A court of bankruptcy, taking jurisdiction of insolvent estates and thus coming into possession of the res, may draw unto itself the determination of all controversies relating to any part thereof, including problems in connection with a lease of premises in the exclusive possession of the debtor, or an option whose value as an asset of the debtor depends upon performance of the terms and conditions of such a lease. In re International Power Securities Corp., supra, and In re Gunder, 88 F.2d 284 (7 Cir., 1937).
9. A creditor may not, through the device of instituting proceedings in another forum, negate the jurisdiction of this Court over property of the debtor or take away from that Court the jurisdiction to determine the amount of debts of any creditor who is entitled to share in any plan of reorganization that the Court may approve. First National Bank in Houston, Texas v. Lake, 199 F.2d 524 (4 Cir., 1952).
10. Petitioners, as creditors, concessionaires and participants in these Chapter XI proceedings, have the necessary standing to invoke the jurisdiction of this Court. Reconstruction Finance Corp. v. Riverview State Bank, supra.
11. While the petitioners are not the debtor, they are inextricably bound in this proceeding and they have joined in and acquiesced in all the legal and factual issues presented to this Court.
12. Under the unusual circumstances of this case, there is no adequate remedy at law and the debtor and the petitioners are threatened with imminent harm and irreparable injury by the continuation of The Joscar Company litigation in the United States District Court for the Eastern District of New York.
13. The Joscar Company is not threatened with imminent harm or irreparable injury, since its claim for rental monies can be adequately adjudicated in the instant proceedings.
14. The Joscar Company should be enjoined preliminarily from proceeding to assert its claims, if any, under its lease of the premises in Fairfax County, Virginia in any forum other than this Court.
1. The Joscar Company is enjoined from instituting any action in this District or in any other Court based on the lease and option covering the leasehold premises found to be in the possession of the debtor in the Lee Magisterial District, Fairfax County, Virginia, until February 4, 1963, or until further order of this Court, and are further enjoined from issuing process, executing on any judgment, or instituting or prosecuting any legal action which would in any way affect the validity of the aforesaid lease and option.
2. In the event that the debtor, Bargain City, U.S.A., Inc., a corporation, in Receivership under the provisions of Chapter XI of the Bankruptcy Act, as amended, is adjudicated a bankrupt, and it is determined by this Court or the Referee that no plan of reorganization is feasible prior to February 4, 1963, then the petitioners, the debtor, or Joscar Company may forthwith apply to this Court for termination of this injunction and any other relief which the circumstances may warrant.
3. The injunctive relief granted herein shall inure to the benefit of not only Consolidated Sun Ray, Inc., but also Hybla Valley Development Corp. and Blauner's, Inc.
4. Petitioner Consolidated Sun Ray, Inc. shall post bond in the sum of $ 5000.00 and petitioners Hybla Valley Development Corp. and Blauner's, Inc. shall, respectively, post bond in the sum of.$ 1000.00.
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