The opinion
ROGERS, Circuit Judge
(concurring). I concur in the result reached, but do not find it necessary to consider the reorganization plan. The sole question is whether a court which has taken oyer the management of the affairs of a corporation, having appointed receivers who are. administering its business, has the right, while still in control, tO' prevent by injunction a meeting of the stockholders. I am satisfied that it possesses that power, and that its jurisdiction extends, not only over the property of .the corporation, but over the corporation itself, so that during the tíme its possession continues it has authority to restrain the action of both directors and stockholders. Its right to restrain the action of the directors seems to be unchallenged. But why it should be supposed .that stockholders, either preferred or common, can'not be restrained,' while directors may be, I am unable to comprehend. It is the duty, of a court managing, tor.the time being, through its receivers, the affairs of a corporation, to. protect, so far as it can *463 while in possession, the rights of all parties in interest, both creditors and stockholders common and preferred. As neither directors nor stockholders have any right to take effective action which will embarrass the court in its management of the property so long as the receivership continues, or which will, when the receivership ends, prevent the court from restoring- the property to tbe hands of those from whom it received it, 1 think Judge Mayer was quite within his discretion in the action which. he took.
At the time he assumed control of the corporation the preferred stockholders did not. possess the right to vote, under the terms of their contract with the corporation. Whatever right to vote they now possess lias vested in them during the period of the receivership. The court has the right to pay all the liabilities: of the corporation including the liabilities to the preferred stockholders. The fast accumulating stir-plus in die hands of the receivers indicates that the court will soon he able to lerminate the receivership and restore the property to the common stockholders, who will be entitled to the management of its affairs when the unpaid and cumulative dividends due to the preferred stockholders are paid. The preferred stockholders, with a thorough knowledge of that probability, therefore desire, before the liabilities are paid and. their right to vote is by the te.rms of their contract gone, to hold a stockholders meeting at which they may cast nine votes for each share of stock they hold, and thus put through a plan of reorganization, the merits of which are not involved, but which will alter in a very substantial manner the relations of these two- classes of stockholders. It seems to me impossible to bold that any body of stockholders has an absolute light to a stockholders’ meeting- while a court is in control of the corporation. If there is no such absolute right, then it must be within the court’s discretion to say whether it will allow and when a meeting to be held; and in this case I discover, as I have stated, no abuse of that discretion.
It is doubtful whether, in the whole history of receiverships, either in the Southern district of New York or in any other district in the United States, there can be found another receivership which has been conducted with such phenomenal success as has attended the receivership over the defendant corporation. This success is due in part to the business acumen of the receivers, Hon. George C. Holt and Hon. Benjamin I>. Odell, and in part to the phenomenal conditions which now prevail in this country and in Europe. At the beginning of the receivership, April 20, 1917, the outstanding liabilities exceeded in amount $4,608,475.58, and on December 31, 191.7, they were $1,448,-420.26, showing a reduction of $3,160,055.32; and on February 7, 1.918, the receivers reported a cash balance of $1,369,170.33. The enormous profits being realized upon the contracts now being carried out by the receivers give every assurance tlxat the preferred stockholders will soon be paid every dividend claim they have against the company. Indeed, in view of the prosperous conditions which now prevail in the affairs of the corporation, with earnings at the current rate understood to be from $400,000 to $700,000 a month, it is quite probable that the assets of the company will be so large that soon the outstanding preferred stock can be paid off, if it be thought wise to take such action.
*464 It seems to me it would be a great injustice to permit the preferred stockholders to meet as proposed, and thus taire advantage of a situation which is temporary to put through a revolutionary plan, which, whatever its merits or demerits would alter radically the relations of the parties. If the court had permitted the meeting to be held, it might be a serious question whether the court had not abused its discretion. The only fair and proper course was the one which was adopted, and which in the end will restore the corporation, with its debts paid, including those of the preferred stockholders, to the common stockholders, from whose control it was originally taken; and with that the result it cannot be successfully maintained that wrong has been done to any one.