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LEIMAN V. GUTTMAN, 336 U. S. 1 (1949)

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U.S. Supreme Court

Leiman v. Guttman, 336 U.S. 1 (1949)

Leiman v. Guttman

No. 88

Argued December 13, 1948

Decided January 17, 1949

336 U.S. 1

Syllabus

1. Under § 221(4) of Ch. X of the Bankruptcy Act, 11 U.S.C. § 621, the bankruptcy court has exclusive jurisdiction over claims for services as attorneys for a stockholders' protective committee in a corporate reorganization proceeding -- including claims under a private escrow agreement for services which benefited a single class of security holders and are compensable by them, and not from the estate. Pp. 336 U. S. 2-10.

(a) The control of the bankruptcy court is not limited to fees and allowances payable out of the estate. P. 336 U. S. 5.

(b) Section 221(4) applies to "all payments" for services "in connection with" the proceeding or "in connection with" the plan and "incident to" the reorganization, whoever pays them. Pp. 336 U. S. 5-8.

(c) Payments under a private arrangement expressed in an escrow agreement with a committee representing a smaller or more intimate group than a conventional committee are not excepted. P. 336 U. S. 8.

2. Since the determination of allowances has been made an integral part of the process of confirmation of a corporate reorganization which is exclusively entrusted to the bankruptcy court under Chapter X, it may not be delegated to a state court. P. 336 U. S. 9.

3. In a reorganization proceeding under Chapter X, the bankruptcy court erroneously ruled that it had no jurisdiction over legal fees arising out of private arrangements with a stockholders' protective committee and not payable out of the estate. No appeal was taken, and the time allowed for appeal had expired.

Held: the chanroblesvirtualawlibrary

Page 336 U. S. 2

claimants may still apply to the bankruptcy court for an allowance, whether or not the final decree under § 228 has been entered. Pp. 336 U. S. 9-10.

297 N.Y. 201, 78 N.E.2d 472, affirmed.

In a corporate reorganization proceeding under Chapter X of the Bankruptcy Act, the bankruptcy court allowed petitioners certain fees for legal services rendered to and payable out of the estate, but held that it had no jurisdiction over certain additional fees to be paid under the terms of a private escrow agreement between them and a committee representing a group of stockholders. 69 F.Supp. 656. Without appealing from this ruling, petitioners sued in a state court for specific performance of the escrow agreement. The trial court denied a motion to dismiss for lack of jurisdiction. 71 N.Y.S.2d 200. The Appellate Division affirmed. 272 App.Div. 896, 72 N.Y.S.2d 406. The Court of Appeals reversed. 297 N.Y. 201, 78 N.E.2d 472. This Court granted certiorari. 335 U.S. 808. Affirmed, p. 336 U. S. 10.





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