(dissenting).
I am unable to agree that the decision of the majority is compelled by the holding of the Supreme Court in Case et al. v. Los Angeles Lbr. Products Co., Ltd., 308 U.S. 106, 60 S.Ct. 1, 84 L.Ed. 110. In that case the plan proposed to permit stockholders to share in the assets of the corporation pledged as security for creditors. Here the priority of the bondholders is preserved for their protection, if not to the full extent of the contractual obligation, certainly to the full extent of the fair value of the security. Nor is there support for the announced conclusion in the case of In re Barclay Park Corp., 2 Cir., 90 F.2d 595, where the plan likewise proposed to permit stockholders to share in assets pledged as security for the debts of the corporation.
The underlying philosophy of all of the reorganization provisions of the Bankruptcy Act, including its agricxiltural adjustment provisions and the railroad and corporation reorganization sections, is that a distressed debtor should have an opportunity for rehabilitation, and that there is no inequity nor constitutional infirmity in providing such opportunity so long as creditors are protected in their priorities to the full fair value of their security at the time of the reorganization, and chose to preserve such value rather than hazard a distress sale. Unless this concept is grasped the reorganization provisions would seem to have no purpose that is not served by liquidation under usual bankruptcy procedure.
While the court is not bound by the consent of the bondholders, nor by the approval of the plan by state or federal commissions, the self-interest that induces the former and the opportunity for detailed investigation that leads to the latter, make them highly persuasive of the fair and equitable character of the plan. I think it shoxild be approved and the order appealed from reversed.