the petition in this respect has not been carried and that for this reason the petition 'shall be deemed not to be filed in good faith.' 11 U.S.C.A. § 546(3), supra.
On the other issue raised by the objecting creditors the recent case of In re Biltmore Grande Apartment Bldg. Trust, 7 Cir., 146 F.2d 81, is in point. A dismissal of two petitions filed for reorganization under Chapter X for the reason that the petitions did not comply with its requirements and that they were not filed in good faith in that the petitioners failed to sustain their burden of showing that the interests of creditors and stockholders would best be subserved in the federal proceedings, was affirmed by the Circuit Court of Appeals for the Seventh Circuit as a correct interpretation and application of the principles announced in the Marine Properties case. The following excerpt from the opinion of Judge Duffy, of the Eastern District of Wisconsin, 59 F.Supp. 1000, contains his reasoning in that case:
'The Biltmore property is assessed for taxation at $ 273,000 ($ 58,000 for the land and $ 215,000 for the building). The trustees in their petition for reorganization allege the value to be $ 315,000, and that there is no equity. In the foreclosure complaint the bondholders allege the value to be $ 325,000. From the trustees' report it appears that the average anuual income before depreciation for the years 1940, 1941, 1942 and 1943 was $ 18,000. Assuming that there may be thirty years of economic life remaining in the building, there would be a capitalized earning value of about $ 250,000.
'It is apparent that there is no equity beyond the interest of the first mortgage bondholders. The principal of the first mortgage debt is $ 313,800. Two years of unpaid interest at 6 1/2% amounts to $ 40,794. Assuming that there has been no waiver of the difference between the 6 1/2% fixed on the bonds and the 5% actually paid in the past seven years, there would be an additional $ 32,949 due, or, a total of principal and interest of $ 387,543. In addition, there are second mortgage notes with accrued interest amounting to $ 63,572 and notes payable of $ 15,250. I conclude that the value of the Biltmore property plus the cash on hand is considerably less than the first mortgage debt.
'The circumstances of this case bring it within the rule announced in Marine Harbor Properties, Inc. v. Manufacturers Trust Co., 317 U.S. 78, 63 S. Ct. 93, 87 L. Ed. 64, and In re Cook, 7 Cir., 104 F.2d 981. The burden is on the petitioners to show that pending State court proceedings withhold or deny to creditors or stockholders benefits or protection which Chapter X affords, 11 U.S.C.A. § 501 et seq. They have not done so. Furthermore, there is no showing that the holders of junior lien or unsecured creditors or stockholders desire to make a contribution which would be the only way in which they could participate in a plan of reorganization.'
We believe that the analogy is striking and that the similar facts disclosed in the case at bar are directly within the ruling of the Supreme Court in the Marine Properties case. We further conclude that the proponents of debtor's petition have not carried the burden of showing that the interests of creditors would best be subserved in the federal proceedings. 11 U.S.C.A. § 546(4).
Debtor's petition must be dismissed for failure to show the 'need for relief' under Chapter X. 11 U.S.C.A. § 530(7).
On notice of settlement an order will be entered dismissing the petition of the debtor and vacating the order of this court entered December 8, 1944 and requiring the Trustee appointed by this court to file an account of all cash and property received, and disbursements made, by him, after the allowance of which account the balance of debtor's property remaining in his hands shall be by him returned to it.
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