Appeal from the Order of the Pennsylvania Public Utility Commission in case of Application of Yellow Cab Company of Philadelphia, pursuant to Second Plan of Arrangement. Application Docket No. A-10548, Folder 101.
Jeffrey B. Albert, with him, Nathan L. Posner, of counsel, Fox, Rothschild, O'Brien & Frankel, for Yellow Cab Company of Philadelphia, petitioner.
David A. Koss, for Dewey Leasing, Inc., petitioner.
Daniel P. Delaney, Assistant Counsel, with him, Joseph J. Malatesta, Deputy Chief Counsel and George M. Kashi, Chief Counsel, for respondent.
Judges Crumlish, Jr., Mencer, DiSalle, Craig and MacPhail. President Judge Bowman and Judges Wilkinson, Jr., Rogers and Blatt did not participate. Opinion by Judge Craig. President Judge Bowman did not participate in the decision in this case. Judge DiSalle did not participate in the decision in this case.
On July 19, 1979, the Pennsylvania Public Utility Commission (PUC) entered an order approving Checker Motor Sales Corporation (Checker) as a creditor for Yellow Cab Company of Philadelphia (Yellow) but disapproving Dewey Leasing, Inc. (Dewey) as a creditor in the same transaction. Yellow and Dewey have appealed the order.
Yellow has been operating as a debtor-in-possession under Federal Bankruptcy proceedings, since April 1, 1978. To secure new taxicabs, Yellow submitted a plan of arrangement with the PUC, seeking approval of a lease-purchase-security transaction involving Checker as seller, Dewey as buyer/lessor and Yellow as lessee/guarantor, which included a pledge of some of Yellow's PUC operating certificates as collateral.
By order adopted November 21, 1978 (entered November 30, 1978), the PUC approved Yellow's amended plan of arrangement, which included a proposal for a pledge of operating rights as to 400 taxicabs. That order contained several conditions for approval of such a pledge. The critical condition, and the condition upon which this appeal arises, was that no operating certificates could be pledged without PUC approval of the specific creditors.
Further, the PUC order expressly stated that it would consider the application for permission to pledge under the procedural provisions governing the issuance and registration of securities, 66 Pa. C.S. § 1901 et seq.
In January, 1979, Yellow entered into the equipment financing transaction which ultimately resulted in Dewey purchasing 304 new taxicabs from Checker, and leasing those cabs to Yellow for two years. The total purchase price of the taxicabs was $2.1 million.
By order dated January 9, 1979, the United States District Court (Eastern District of Pennsylvania) approved the lease-purchase-security transaction, including the pledge of operating certificates to Checker and Dewey, subject to approval by the PUC.
By letter of April 25, 1979, the PUC stated that the application would be considered as one for certificate rights under 66 Pa. C.S. § 1101 et seq., rather than as one for the issuance of securities.
The PUC held public meetings to consider information about the proposed creditors, and, on July 19, 1979, adopted the order approving Checker but disapproving Dewey as a creditor in the transaction, and ...