corporation were under no obligation to become stockholders of the New Company; they were, however, accorded the opportunity to become stockholders, but only upon compliance with the terms and conditions of the plan.
The plan of reorganization did not vest in the stockholder 'an absolute right of property in the stock of the new corporation, irrespective of his own action, but an option to be exercised or not at his own choice, and, of course, to be exercised, if at all, within such reasonable time as would avoid prejudice to the rights of the others.' Landis v. Western Pacific R. Co., 133 Pa. 579, 19 A. 556, 558; see also Keane v. Moffly, 217 Pa. 240, 66 A. 319, 320. The present claimants failed to exercise this option either within the time prescribed by the Committee or thereafter, and it is therefore our opinion that this option may not be enforced at this late date. Ibid. See also Fletcher Cyclopedia Corporations, Vol. 15, Sections 7264 and 7265.
The plan of reorganization was supported by a voluntary agreement, an integral part of the plan; this agreement bound only those security holders who became parties to it by compliance with its terms and conditions. The stockholders who accepted the plan became parties to the agreement and assumed the responsibilities incident to stock ownership; those who failed to exercise the option did not become parties to the agreement and assumed none of the responsibilities incident to the stock ownership. See Annotation, 89 A.L.R. 770, 772, 774. It would therefore seem inequitable to permit the present claimants, who assumed none of the responsibilities of stock ownership in the New Company, to enforce their option at this late date and thus claim the benefits which enure to the preferred stockholders of the Debtor under the present plan of reorganization.
The relief which the claimants now seek may be granted only upon a modification of the earlier agreement and the plan of reorganization promulgated pursuant thereto so as to permit the exchange of securities after the lapse of more than fifteen years. We are of the opinion that the Court is without authority to grant such relief. Cf. Habirshaw Electric Cable Co. v. Habirshaw Electric Cable Co., 2 Cir., 296 F. 875, 879, 43 A.L.R. 1035; see also in re Peyton Realty Co., 3 Cir., 148 F.2d 771, 773; Duebler v. Sherneth Corporation, 2 Cir., 160 F.2d 472, 474. The earlier plan of reorganization was in fact a voluntary agreement to which all stockholders who accepted its terms and conditions became parties. This Court has no summary jurisdiction to alter or modify the agreement. Habirshaw Electric Cable Co. v. Habirshaw Electric Cable Co., supra, 296 F. 879, 881.
The claimants argue, in support of their asserted right to relief, that they had no notice of the proceedings initiated by the Committee. The argument is not supported by either the stipulation of facts or evidence. However, if we assume that there was an absence of adequate notice, the argument seems rather tenuous. The record is devoid of any evidence which would support a determination that the claimants had no knowledge of the earlier proceedings.
The claimants are the holders of preferred stock of the Permanent Industrial Exposition of Newark, the predecessor of the Debtor, and they are not the holders of preferred stock of the Debtor. They therefore have no right to distributive shares of the fund available for distribution among the preferred stockholders of the Debtor under the present plan of reorganization.
The Court lacks the authority to alter or modify the earlier plan of reorganization so as to permit the exchange of securities thereunder after the expiration of the period of limitation therein prescribed.
The claims filed herein will be disallowed for the reasons stated.
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