Citations
- 124 F. Supp. 728
Full opinion text
SMITH, District Judge.
This matter involves the final accounting of the receivers of United Oil Producers Corporation. Objections thereto were filed by the executors of the estate of William W. Cohen, holder of some non-deposited United Oil Producers bonds and of shares in Southern States Oil Company, and individuals holding shares of stock and scrip in Oil Lease Development Company, and Southern States, two of the companies of the old Middle States Oil Corporation system.
The receivership grew out of the collapse of the system of oil, railroad, and land companies, security and holding companies, controlled by C. N. Haskell, formerly governor of Oklahoma. The system had comprised some fifty-five corporations, of which Middle States Oil Corporation and thirty-eight others which were, in August, 1924, wholly or partly owned by Middle States Oil directly or through sub-holding companies, eventually were placed in receivership in this District. These were
Date of
Name of Company Receivership
1. Central States Oil and Gas Company 1/21/25
2. Columbia Petroleum Corporation 8/22/24
3. Corona Oil Company 9/5/24
4. Cotton Belt Petroleum Company 9/5/24
5. Diamond Pipe Line and Marketing
Corp. 9/5/24
6. Dominion Oil Company 10/4/24
7. Eureka Producing Company 8/22/24
8. Federal Oil Marketing Corporation 8/22/24
9. Gulf Coast Refining Company 8/22/24
10. Gulf States Oil and Refining Corpo-
ration 8/22/24 ’
11. Hobbs Oil Company 2/13/25
12. Imperial Oil Corporation 8/22/24
13. Judson Oil Company 8/22/24
14. Leahy Oil Company 1/21/25
15. Marr Oil Corporation 8/22/24
16. Middle States Oil Corporation 8/15/24
17. Midsig Corporation 9/5/24
18. Miles Oil Corporation 9/5/24
19. Number Eleven Oil Corporation 9/5/24
20. Number Nine Oil Corporation 8/22/24
21. Number One Oil Company 8/22/24
22. Number Seventy-Seven Oil Company 9/5/24
23. Oil Lease Development Company 8/22/24
24. O.L.D. Operating Company 8/22/24
25. Oliphant Petroleum Company 9/5/24
26. Pawnee Osage Oil and Gas Company 1/21/25
27. Peters Leahy Oil Company 1/21/25
28. Peters Oil Company 9/5/24
29. Plains Petroleum Company, Inc. 8/22/24
30. Ranger Texas Oil Company 9/5/24
31. Reliable Securities Corporation 8/22/24
32. Southern States Oil Corporation 8/22/24
33. Sure Oil Corporation 8/22/24
34. Texas Chief Oil Company 8/22/24
35. Turman Oil Company 8/22/24
36. United Oil Producers Corporation 8/22/24
37. Verland Oil and Gas Company 8/22/24
38. Western States Oil Corporation 8/22/24
39. Wichita Petroleum Company 8/22/24
The receiver Glass is charged with having, in combination with the reorganization committee members, engineered the reorganization to obtain control of the res, with having, by the terms of the reorganization agreement allowing stockholder participation, by the fixing of the bids at the sale and by later handling of the sale of properties of subsidiaries, by the allocation of overhead expenses, by reshuffling of the intercorporate claims, by enforcement of the Westervelt Gulf Coast and fraud claims on behalf of the new company, by illegal use of funds of subsidiaries by the new company, and otherwise defrauded the United Oil Producers bondholders, particularly the non-depositors, and with having defrauded the minority shareholders in Southern States and other subsidiaries.
Practically every act of Glass in the receivership is attacked as in bad faith and in pursuance of the scheme or conspiracy to defraud. The identity of the other claimed conspirators is difficult to ascertain.
Glass' answers to the charges are that he acted throughout in entire good faith, that some of the actions attacked are those of committees or committees’ counsel for which he has no responsibility, that in most cases court orders after sufficient notice protect him, that the bid prices at the sales were fair, that many of the actions attacked have no relation to United, as to which alone he is accounting here, and that in most instances the proportionate interest of any minority in the outcome of any particular transaction is so small as to be de minimis. He also asserts special defenses of failure to state a claim on which relief may be granted, estoppel, fraud, laches, payment, release, statute of limitations, waiver, res ad judicata, and transit in rem judicatam. Middle States Petroleum Corporation, the new corporation, depends also on laches, estoppel, and the statute of limitations, and counterclaims against Cohen’s estate for alleged conversion of $24,700 in United Oil Producers bonds alleged to have been held by Cohen as trustee or agent of Reliable Securities Corporation and for the distributive values received by Cohen thereon.
Findings of Fact
1. In June, 1924, or shortly thereafter, one Shivers, Haskell’s secretary, as a stockholder of Middle States Oil Corporation, filed a stockholders’ bill against that company, praying the appointment of a receiver.
2. The application for receiver was denied at the hearing in the stockholders’ suit.
3. Shortly thereafter a creditors’ suit was filed by Joseph A. Phelan who had claims against Middle States Oil Corporation and one of its subsidiaries.
4. John J. Curtin was attorney for Phelan.
5. On August 15, 1924, in the creditors’ action, Joseph P. Tumulty and Julius Mayer were appointed receivers of the parent company, Middle States Oil Corporation.
6. Amended and supplemental bills were later filed, adding thirty-eight other •companies in the system and the receivership was, on consent, extended to those •companies.
7. Shivers formed a committee to represent Middle States Oil Corporation .■stockholders.
8. Joseph Glass was a junior member of the firm of Olcott, Olcott & Glass, which represented Shivers in the stockholders’ action. This firm was also retained as counsel for the stockholders’ •committee. Olcott, Olcott & Glass and John J. Curtin were appointed as the co--attorneys for the temporary receivers. Thereupon Olcott, Olcott & Glass resigned as attorneys for the stockholders’ ■committee,- — Moore, Hall, Swan & Cunningham being retained in their place.
9. Judge Mayer died on November 30, 1925, and on January 27, 1926 Glass was appointed receiver in his place.
10. The receivers were faced with many complications, some ninety litigations against various of the corporations having been instituted, and tax claims totaling some $15,000,000 having been filed against the companies by the United States Government, based upon the false- and-inflated earnings statements which Haskell had caused to be issued to aid in sales of securities of the companies.
11. The books of the companies were either non-existent or inaccurate.
12. Advances had been made between the companies, proceeds from the sale of stock recorded as income from oil sales, and other irregularities existed.
13. None of the companies had ever actually made any net profits.
14. There were a number of producing subsidiaries which owned valuable oil leases, notably Turman, Marr, Federal, and Republic.
15. Some 80% of the stock of Turman was owned by Eureka which, in turn, was owned by United Oil Producers Corporation. United had outstanding bonds of over $2,000,000. A controversy also existed between the minority stockholders of Turman and the Middle States Oil Corporation for alleged failure to carry out the terms of the contract to transfer to Turman sufficient oil leases as required to furnish the agreed consideration for the acquisition of the majority stock in Turman.
16. The ownership in Marr was subject to attack because of the bribery of some of the directors of the Marr Corporation to obtain their agreement to the contract by which the Marr stock was acquired.
17. Under the leadership of one Paul Vitek, the former owners of properties furnished to the formation of Federal Oil Marketing Corporation by Southern States Oil and Middle States Oil also sought to recover them on grounds of fraud.
18. Another major controversy involved the validity of a serial-note issue of Middle States Oil Corporation, attacked as fraudulent by Shivers in his action. Haskell had been speculating in Southern States Oil Corporation stock and the price had been driven up to $32 a share when, in late December, 1923, he became over-extended, the market broke, the stock fell to about $8 a share, brokerage houses to which Haskell was indebted on the stock were in danger of collapse, and trading privileges in the stock were suspended on the stock exchange. The brokers were bailed out by the taking over of the Southern States Oil Corporation stock in their hands by the Middle States Oil Corporation at a price of $14.75 a share in exchange for Middle States Oil Corporation’s serial notes in the amount of more than $5,000,000, secured by a pledge of the Southern States Oil Corporation stock acquired from the brokers. The Southern States Oil stock so acquired amounted to 65.52% of the Southern States Oil stock outstanding.
19. Among the contested claims against the corporations were claims for a principal amount of about $2,250,000, plus interest, on guarantees by Middle States Oil Corporation and Southern States Oil Corporation of two bonds of the Gulf Coast Refining Corporation held by a bondholders’ committee known as the Westervelt Committee. The Westervelt Committee also asserted a claim for four million dollars against Middle States Oil Corporation and Southern States Oil Corporation for damages for fraud in contributing to the formation of Gulf States Oil & Refining Corporation properties represented of a certain value, but claimed to be substantially less in value than called for in the contract under which the Westervelt Committee, Middle States Oil Corporation and Southern States Oil Corporation had caused the formation of Gulf States Oil & Refining Corporation and Gulf Coast Refining Company.
20. The receiver Tumulty concerned himself primarily with the prosecution of the tax litigation before the Treasury.
21. Eventually the entire fifteen-million-dollar tax claims were defeated and refunds of approximately $450,000 obtained from the Government.
22. This entailed a very substantial amount of work by the accountants who reconstructed the books of the corporations from original sources, such as checkbook stubs, reports of oil runs, and corporate minute books, and on the part of tax counsel, covering some five years of work.
23. The receiver Mayer, and, later, his successor Glass, concerned themselves with the resolving of the various controversies in litigation and with the active management of the oil and other properties.
24. An accounting firm, Boyle & Fonteine, set up books reflecting the transactions between the companies and with outsiders for the period from January 1, 1924 until the time of receivership. A second accounting firm, Mattison & Davey, took up the task from that point and, in the course of the preparation of the tax briefs and tax reports, set up books reflecting all the discoverable transactions prior to January 1, 1924 as well as those which took place later. Books were kept of the transactions of the companies after the dates of receivership.
25. The companies were managed by the receivers as a unit although the receivers kept track of the inter-receivership transactions.
26. Court approval was obtained of a basis of allocation to the various estates of the operating expenses of the receiver-ships.
27. The Court pressed for action looking toward reorganization and termination of the receiverships, insisting in early 1929 that positive action be taken.
28. Committees were formed, two of which represented the old stockholders of the Middle States Oil Corporation, one the holders of the United Oil Producers Corporation bonds and the holders of certain Oil Lease Development Corporation bonds which were secured by deposits of United Oil Producers Corporation bonds as collateral, one the serial-note holders; one was the Westervelt Committee.
29. During 1928 there became available an appraisal by Ligón & Company of the physical properties of the oil-producing companies as of December 31, 1927.
30. This appraisal and the physical inventory on which it was based were made available to the various committees and to anyone else who expressed interest in purchasing the properties.
31. In the early stages of the receivership an attempt had been made to obtain a domiciliary receivership in Delaware which had been defeated primarily on the basis of testimony by Glass who had become one of the receivers, to the effect that the companies were solvent in the sense that they either had or could obtain whatever funds were needed to meet their admitted obligations.
32. The oil operations by the receivers were successful, particularly three leases of Turman in the new Seminole field which came in about the end of 1926.
33. The Louisiana and Northwest Railroad, a small railroad in Louisiana almost wholly owned by Middle States Oil Corporation, had had some exceptionally profitable years at the time of the discovery of the Haynesville field about 1921, prior to the coming of the pipe lines into the field. Its large cash holdings, however, were tied up by claims of the Interstate Commerce Commission to recapture a large part of its earnings under the then recapture provisions of 49 U.S. C.A.
34. Because of the unusually heavy expenses of the receivership, largely caused by the accounting and tax situations, and because of the accumulation of interest, particularly on the United Oil Producers Corporation bonds which had a prior claim on the most valuable portion of the producing properties, the Court continued its pressure for the termination of the receivership by reorganization.
35. A tentative reorganization committee, and later a definitive reorganization committee, were formed, consisting of representatives of the existing committees and a representative of the law firm which represented the corporate entities.
36. A plan of reorganization was developed which contemplated foreclosure under bond indentures of the United Oil Producers Corporation (of the pledged Eureka stock) and the Oil Lease Development Corporation (of the pledged O.L.D. Operating Company stock and pledged United Oil Producers bonds) and under the serial-note indenture (of the pledged Southern States Oil Corporation stock), and receivers’ sales of the remaining assets of Middle States Oil Corporation, Imperial, United Oil Producers Corporation, and Oil Lease Development Corporation (the so-called free assets).
37. The plan provided participation by the depositors of United Oil Producers Corporation bonds, Oil Lease Development Corporation bonds, serial notes, the Gulf Coast Refining Company claim, and old Middle States Oil Corporation stock.
38. It also provided that holders of claims against Middle States Oil Corporation other than the inter-corporate claims might become parties on the same basis as the holders of the Gulf Coast Refining Company claim.
39. It did not provide for participation by the holders of stock in any of the associated companies, or for participation of the various inter-company claimants.
40. The necessary steps were taken to foreclose the indentures and obtain an order for sale of the free assets of certain of the corporations in receivership, Middle States Oil Corporation, Imperial Oil Corporation, United Oil Producers Corporation, and Oil Lease Development Corporation.
Neither United nor Imperial, guarantor of United’s bonds, nor the two together, could have continued to pay the interest on the bonds at that time.
41. Counsel for the reorganization committee set the amount which the committee would bid on each parcel of assets.
42. The receiver Glass and his accountant Lind made available to the counsel for the reorganization committee all the facts at their disposal as to the value of the properties and the claims of the various corporations and, at one point, the amounts tentatively decided upon by counsel as the amounts to be bid were altered to conform to advice by receiver Glass, due to the change in his opinion as to the value of some of the inter-corporate claims.
43. The bidders who acted for the reorganization committee were the sole bidders on the sale.
44. The prices fixed by the reorganization committee’s counsel as the amounts to be bid were the amounts bid and accepted by the Court in the sales.
45. The total amount of the various bids for the different parcels was approximately $4,000,000, plus the assumption of receivership liabilities which were approximately $650,000, most of which was composed of inter-receivership obligations. The amounts bid were fair bids on foreclosure and receivership sales.
46. The counsel who fixed the amounts to be bid considered that they were fair from the standpoint of bids upon foreclosure and receivership sales, although not so high as their opinion of the value of all the parcels (plus the stock and claims contributed by the Westervelt Committee) as a going concern for reorganization purposes, which they felt approximated $6,000,000.
47. The amount of the inter-company claims' was fixed about a week prior to the sale on notice to the committees and parties to the cause on the basis of the Mattison & Davey reconstruction of the books of the corporations with, however, reservations of right to the receivers to apply for permission to reopen and re-determine items upon development of further information.
48. May 8, 1930, some months after the sales and the formation of the new company, a re-determination was made as to some substantial items upon similar notice.
49. The receiver Glass was named a director and impartial voting trustee under a voting trust set up in accordance with the reorganization plan.
50. A month and a half after the organization of the new company, and after ascertaining that the Court had no objection to Glass’ serving as president of the new company, on an understanding with the company that, in any case in which the company’s interest conflicted with his position as receiver, he would act as receiver and not for the company, Glass accepted election as president of the new company.
51. He had not actively sought election to the position, having made known his desire to terminate his management responsibilities although he hoped to continue to be associated in a legal capacity with the new corporation.
52. Search on the part of the members of the reorganization committee for an experienced oil man to head up the new company was, however, unsuccessful and by the offer of a salary of $50,000 a year, with the right to continue his law practice, Glass was induced to continue as the executive head of the reorganized company.
53. Litigation continued on the contested claims before the Special Master appointed in the case.
54. Monthly cash accountings were filed with the Master, and some outside litigation was continued, including the Marr and Vitek litigations, as a result of the decision in one of which, Marr v. Tumulty, 1931, 256 N.Y. 15, 175 N.E. 356, the majority of the Marr stock was lost to the corporation.
55. The Vitek claimants who had also raised issues of fraud in inducing the transfer of their properties were, however, unsuccessful and those properties were retained. Oakes v. Federal Oil Marketing Corp., 8 Cir., 1930, 42 F.2d 991.
56. An adjudication was obtained before the Special Master on the Westervelt Committee claims which were prosecuted by the new company although still formally in the name of the Westervelt claimants.
57. The claims on the $2,000,000 bond and $1,000,000 bond were allowed by the Master against both Middle States Oil Corporation and Southern States Oil Corporation although not for the full amount claimed.
58. The Westervelt fraud claim against Southern States Oil Corporation and Middle States Oil Corporation has not been tried or determined but is still asserted by the new company in the amount of some $4,000,000.
59. A policy was adopted of gradually liquidating the producing subsidiaries other than Turman, which alone was continued active in the field of acquiring, and developing, new oil properties.
60. Properties of the other producing subsidiaries were either sold off to strangers or sold to Turman which became Mid-States-Oil Corporation, or to another corporation, Mid-States Development Corporation, which was set up to hold properties of subsidiaries, the stock of which was not under the lien of the trust indenture on the new company’s bonds.
61. The sales were accomplished by reopening, or instituting, ancillary proceedings in the districts in which the properties were located and by obtaining orders of sale.
62. The sales were made at fair prices after appraisal by an oil engineering firm which had done considerable work for the receivers in the past.
63. Glass has continued as president of the new company, Middle States Petroleum Corporation, to date.
64. The voting trust arrangement, which ran out after ten years, was renewed.
65. Starting in 1939, Glass and his family have acquired substantial amounts of voting trust certificates for stock in the new corporation, Middle States Petroleum Corporation, until he and his family now own voting trust certificates for,some 8% of the stock of the corporation.
66. Glass’ salary was reduced by successive steps during the depression years to $24,000 but has been increased since the recovery in business until it is now approximately $56,000 a year.
67. The boards of directors of the new corporation have been friendly to Glass’ management and have contained several members who, by reason of employment by the corporation or by association with Glass in his law firm, have been closely connected with him.
68. The boards have, however, always contained men of independent thought and action, representing substantial amounts of stock ownership in the corporation.
69. William W. Cohen, a broker, had been active in the sale of securities in some of the Haskell companies. Haskell had maintained accounts with Cohen’s firm in his own name and in the names of some of the companies controlled by him, including Reliable Securities, which was a family-owned corporation used by Haskell in securities dealings and in handling funds of the system companies.
70. In 1924, prior to receivership, Haskell had transferred to Middle States Oil Corporation ownership of Reliable.
71. Cohen had acquired deposit certificates for deposited United Oil Producers Corporation bonds in the amount of $11,000 under the plan, and had received new company securities therefor.
72. In 1935, after Haskell’s death, Cohen presented $32,200 additional amount of United Oil Producers Corporation bonds on which the distributive values fixed by the Court were paid to him.
73. After Cohen’s death in 1943, his executors, of whom Sophie Cohen and Meyer Kraushaar survive, attempted to learn the value of small amounts of stock in some of the Haskell companies found in Cohen’s deposit boxes.
74. Because of Cohen’s former Haskell connections or out of plain cussedness, Glass revealed little or nothing.
75. Thereafter, scenting the possibility of fraud, Kraushaar undertook to force accounting and disclosure causing Glass to file so-called final accountings and to bring on the United Oil Producers Corporation accounting for hearing on the accounting and application for discharge of the receivers.
76. Against objections by Kraushaar, the Court granted approval of the accounting and discharge.
77. The Court of Appeals reversed and remanded for hearing on the objections. Phelan v. Middle States Oil Corporation, 2 Cir., 1946, 154 F.2d 978.
78. Amended and supplemental objections were filed and extended hearings had.
79. The difficulties of comprehending the complexities of a highly involved situation have been multiplied by the charges and handling of the evidence on the objeetants’ part, and by the receivers’ reluctance to provide access to the records of the companies involved beyond United Oil Producers Corporation itself until required to do so.
80. The receiver Tumulty has been physically incapacitated since 1941 and is not charged with any affirmative action in violation of his trust.
81. It is highly probable that appointment of thirty-eight separate receivers and litigation to the death on each major claim between them would have quickly consumed the estates of all.
82. So also delay in reorganization would have run the costs up so that the chance of any organization surviving would have disappeared.
83. A struggle of the new company followed in its early years to survive and to justify any dividends. Since 1940, however, the company has prospered.
84. Glass’ firm, in lieu of separate fixing of fees for its services to the stockholders’ committee in the early stages of the receivership prior to its appointment as one of counsel for the receivers, shared in the allowances to Moore, Hall, Swan & Cunningham, having first brought the arrangement to the attention of the Court.
85. One of the tax counsel who acted for the receivership in the tax litigation, in lieu of rental for a portion of the offices of Glass’ firm used by him, shared his fee with Glass’ firm, Glass having brought the arrangement to the attention of the Court prior to each application for allowance by the tax counsel.
86. In 1928 a controversy between the receivers ■ and minority stockholders of Turman concerning the carrying out of the agreement under which the Turman majority stock was acquired was settled by the transfer to Turman as of December 31, 1927, of oil properties of other subsidiaries, Wichita, Cotton Belt and Eureka, holder of the Turman majority stock.
87. The share-ownership of the companies in receivership on December 31, 1927 was as follows:
88. Except in the case of the Turman minority and the Gulf stock held by the Westervelt Committee, individual minority holdings were small and widely scattered.
89. All claims against the operating subsidiaries in the ancillary jurisdictions, in the amount of approximately $1,800,000, were paid off between the date of receivership and the date of the sales in 1929.
90. Outside creditors’ claims (other than inter-company) at the time of the sales were relatively minor, amounting to:
Debtor Company
Central States Oil and Gas Company $ 1,583.02
Dominion Oil Company 9,900.00
Eureka Producing Company 16,518.44
Federal Oil Marketing Corporation 11,090.31
Gulf States Oil & Refining Corporation 17,568.39
Imperial Oil Corporation 54,180.49
Marr Oil Corporation 9,017.42
Middle States Oil Corporation 2,168,457.03
Number Seventy-Seven Oil Company 653.93
O.L.D. Operating Company 19,586.99
Plains Petroleum Company, Inc. 519.34
Ranger Texas Oil Company 1,583.02
Reliable Securities Corporation 42,560.00
Republic Producing Company 528.59
Southern States Oil Corporation 20,842.43
Sure Oil Corporation 2,176.36
Turman Oil Company 20,317.76
United Oil Producers Corporation 28,310.89
Western States Oil Corporation 49,030.68
Wichita Petroleum Company 27,222.39
91. The inter-company claims, as fixed by the order of December 14, 1929, were:
92 As amended by the order of May, 1930, the inter-company claims were as follows: Exhibit A — Amended Middle States Oil Corporation And Affiliated Companies Receivable = Black Intercompany Claims — New York Payable = Red — December 28. 1929 Summary of Exhibit B Corona Oil Company, Number One Oil Company, Reliable Securities Corporation, Peters Oil Company, Central States Oil and Gas Company, Peters Leahy Oil Company, Dominion Oil Company, Leahy Oil Company, Pawnee Osage Oil and Gas Company, Texas Chief Oil Company, Hobbs ' Oil Company, Imperial Oil Corporation, Wichita Petroleum Company, United Oil Producers Corporation, Eureka Producing Company, Gulf States Oil and Refining Corporation, Federal Oil Marketing Corporation, Mai*r Oil Corporation, Oil Lease Development Company, O.L.D. Operating Company, Southern States Oil Corporation, Judson Oil Company, Plains Petroleum Company, Inc,, Sure Oil Corporation, Western States Oil Corporation, Middle States Oil Corporation —$ 25,423.32 2,480.13 49,054.08 — 145,145.46 — 4,697.39 — 1,173.36 385,056.62 — 3,429.92 — 225.80 2,088,363.16 90,348.39 806,457.59 231,614.53 — 1,371,002.93 — 37,125.27 — 55,481.47 61,871.42 60,402.84 65,701.52 15,931.38 — 39,020.76 — 23,624.98 3,424.64 — 76,559.05 8,371.18 Total Receivable Accounts, • . $3,746,803.22 Total Payable Accounts, . - 1,905,183.97 Net, ' $1,841,619.25
93. Still in litigation before the Special Master at the time of the sales were claims of the Haskells, Unity, Cannon, Saklatvala, the Gulf Coast claims on the bond guarantees against Middle States Oil Corporation and Southern States Oil Corporation, the Westervelt Committee fraud claim.
94. The Saklatvala claims were withdrawn, the Cannon, Haskell and Unity claims denied.
95. The Gulf Coast claims grew out of the so-called Westervelt agreement of September 25, 1923, between Southern States, Middle States and one Westervelt, representing a committee of bondholders of Island Refining Corporation then in receivership, under which agreement Gulf States and Gulf Coast had been formed.
96. Island Oil and Transport Corporation had contracted to furnish certain annual quantities of oil to its subsidiary, Island Refining Corporation, operator of a refinery built in 1920 at Good Hope, Louisiana. Island Refining Corporation had mortgaged the refinery to secure its bonds in the amount of $5,500,000. Also included under the lien of the mortgage were the contract with Island Oil and Transport Corporation and the stock of two other refining companies, one in Cuba and one in Mexico.
97. Island Oil and Transport Corporation defaulted on its contract and went into receivership. Island Refining Corporation later went into receivership.
98. The Westervelt Committee of Bondholders, in June, 1923, foreclosed on the Island Refining Corporation mortgage and bid in for $400,000 the refinery and other mortgaged assets, ostensibly including the $12,000,000 contract claim against Island Oil and Transport Corporation.
99. The refinery, in 1923, was appraised at a going-concern value of slightly over $2,000,000.
100. On September 25, 1923 the Westervelt Committee entered into a contract with Middle States Oil Corporation and Southern States Oil Corporation under which two companies were to be formed, an operating oil company and a refining company.
101. The Westervelt Committee agreed to transfer to the refining company (which became the Orleans, later the Gulf Coast Refining Company) the Louisiana refinery and the stock in the Mexican refinery.
102. The Westervelt Committee agreed to transfer to the operating company (which became the Gulf States Oil and Refining Corporation) the stock in the Cuban refinery, stock in the Island Refining Corporation of Louisiana, Inc., and the rights represented by the claim for $12,000,000 filed against the receivers of the Island Oil and Transport Corporation for breach of the oil-supply contract, and rights to a tank-car purchase contract.
103. Southern States Oil Corporation and Middle States Oil Corporation agreed to furnish to the operating company or to its subsidiary, leases on 12,000 acres of oil lands in Arkansas with wells capable of producing 12,000 barrels of oil daily, of an estimated value of leases, property and equipment of $8,000,000.
104. The refining company was to issue $3,000,000 in bonds, $2,000,000 for the old Westervelt bondholders, $1,-000,00 to secure $250,000 cash to be paid the Westervelt Committee.
105. The two bonds were to be guaranteed by Middle States Oil Corporation and Southern States Oil Corporation.
106. All stock in the refining company was to be issued to the Westervelt Committee, transferred to Middle States-Oil Corporation and Southern States Oil Corporation for the guarantee of the bonds, and transferred by them to the operating company for all the operating company’s B Stock, and 2,300,000 shares of A stock, the remaining 250,000 shares of A stock to go to the Westervelt Committee.
107. Gulf Coast Refining Company and Gulf States Oil and Refining Corporation were formed.
108. Temporary bonds of Gulf Coast Refining Company were issued in the amounts of $2,000,000 and $1,000,000 with attached guaranties executed by Middle States Oil Corporation and Southern States Oil Corporation.
109. Stock in Marr and Federal, operating subsidiaries, was transferred to Gulf States Oil and Refining Corporation by Middle States Oil Corporation, Southern States Oil Corporation and Western, a subsidiary of Southern States Oil Corporation;
110. The Westervelt Committee executed transfer instruments as agreed.
111. Gulf Coast Refining Company failed to meet the first interest due on its bonds May 1, 1924 and, on July 3, 1924, the principal was declared due.
112. Foreclosure proceedings were instituted, later in July, 1924, in the Eastern District of Louisiana.
113. A decree of foreclosure was entered March 10, 1925, directing sale of the mortgaged properties. Westervelt bought in the properties for $725,000.
114. The sale was confirmed over the opposition of the receivers of Middle States Oil Corporation and Southern States Oil Corporation.
115. After expenses, $706,342.87 was left for distribution, of which the distributive share of the $1,000,000 bond was $235,447.62, and of the $2,000,000 bond, $470,895.25.
116. The receivers of Gulf States recovered judgment on the claim against Island Oil and Transport Corporation in an amount of more than $700,000 in this court. Both sides appealed, Gulf States contending that the amount was inadequate, Island Oil and Transport that Gulf States had no standing to sue.
117. The Court of Appeals for the Second Circuit reversed and dismissed, New York Trust Co. v. Island Oil & Transport Corp., 1929, 34 F.2d 649.
118. Later efforts to realize on the claim for Gulf States through the receiver of Island Refining were also unsuccessful.
119. December 19, 1924 Westervelt filed claims against Middle States Oil Corporation and Southern States Oil Corporation for $250,000 for breach of the agreement for the $250,000 cash payment. American Trust Company filed proof of claim against Middle States Oil Corporation and Southern States Oil Corporation for $3,210,000 for breach of the guarantees on the bonds. American Trust Company also filed proof of claim against Gulf Coast Refining Company for $3,279,212.50 on the bonds.
120. After the sales, in accordance with the plan of reorganization Westervelt and American Trust Company assigned these claims to Middle States Petroleum Corporation, the new company.
121. The claims were brought on for hearing before the Special Master appointed in this case, on June 2, 8, and 29, 1932, after notice by publication in the New York Evening Post once a week for two weeks and after notice by mail to all stockholders and creditors of Middle States Oil Corporation and Southern States Oil Corporation, mailed on May 19, 1932.
122. Notices were received by stockholders and creditors whose addresses were known, including Cohen & Company, Levy Brothers, one Samuels, and Mrs. Cohen.
123. At the hearings Middle States Petroleum Corporation was represented by C. E. Cooper, the receivers by C. H. G. Heinfelden, an associate of John J. Curtin. Haskell, his son’s estate, and his family held corporation, Unity Securities Corporation, which had large claims pending against Middle States Oil Corporation, were represented by Mr. Buckley.
124. Four stockholders of Southern States Oil Corporation, two of whom were also stockholders of Western and one of whom was also a stockholder of Middle States Oil Corporation, appeared in person.
125. Heinfelden was not fully prepared and asked more time on the first hearing. He was assured he would be given later opportunity to cross-examine. He did not choose to advance any serious defense of the claims. He had sufficient opportunity to do so and was familiar with their background from participation in other litigation in the receivership. At the time of the trial herein, he had no memory of the hearings on the claims.
126. The Special • Master, on May 5, 1933, recommended that the claim of Middle States Petroleum Corporation as assignee of Westervelt against Middle States Oil Corporation and Southern States Oil Corporation for $250,000 and interest be disallowed, that the claim of Middle States Petroleum Corporation as assignee of American Trust Company against Gulf Coast Corporation for $3,-279,212.50 (which had been abandoned by Middle States Petroleum) be disallowed, that the claim of Middle States Petroleum as assignee of American Trust Company against Southern States Oil Corporation for $3,210,000 be allowed in the sum of $1,656,605.68, and that the claim of Middle States Petroleum Corporation as assignee of American Trust Company against Middle States Oil Corporation for $3,210,000 be allowed in the amount of $1,654,137.33.
127. Objections were filed by Middle States Petroleum Corporation to the Special Master’s recommendation of dis-allowance of the $250,000 claim and to his reducing the $3,210,000 claims by deducting the credits for payments of the proceeds of the Gulf Coast Corporation foreclosure sale before the computation of dividends.
128. Exceptions were filed by Unity and C. J. Haskell to the recommendations for allowance of the claims in favor of Middle States Petroleum Corporation because of Middle States Petroleum Corporation’s relationship with Middle States Óil Corporation, and Southern States Oil Corporation, and to the failure to recommend that Middle States Petroleum Corporation’s claims be subordinated to those of Unity and Haskell because of the relationship of Middle States Petroleum Corporation with Southern States Oil Corporation and Middle States Oil Corporation.
129. The exceptions and objections were overruled and the claims allowed by the Court in the amounts recommended by the Special Master.
130. A claim was also filed on behalf of the Westervelt Committee against Middle States Oil Corporation and Southern States Oil Corporation for $4,000,000 for damages for fraud in misrepresenting the extent and value of the oil properties to be furnished toward the formation of Gulf States Oil and Refining Corporation.
131. This claim was assigned to Middle States Petroleum Corporation in accordance with the plan, but has never been brought on for hearing.
Chatham-Phenix Note
132. At the inception of the receiver-ships the Chatham-Phenix National Bank held a promissory note of Middle States Oil Corporation for $250,000 executed to the Midland Trust Company dated April 29, 1924, interest 6% per annum.
133. As collateral security Middle States Oil Corporation had deposited with the Midland Trust Company three promissory notes of $75,000 each, totaling $225,000, executed by Peters Petroleum Corporation and guaranteed by Charles B. Peters, and certificates representing 22,855 shares of stock of Louisiana & Northwest Railroad Company.
134. The Peters notes, although held at the time by Middle States Oil Corporation, were subject to a claim of ownership by Western States Oil Corporation.
135. There was also assigned as collateral any equity which Middle States Oil Corporation had in collateral securing the notes of the Unity Securities Corporation then with the bank, the collateral consisting of $350,000 in Louisiana & Northwest Railroad bonds and $285,000 of Middle States Oil Corporation 7 % notes.
136. Pursuant to an order of the Court in the receivership entered December 23, 1925, under an agreement between the receivers, the bank, the Peters Petroleum Corporation and Peters, the Peters Petroleum Corporation notes were surrendered by the bank to Peters Petroleum Corporation in consideration of the delivery by the Peters Petroleum Corporation of seven oil and gas leases and by Peters of 34,031 shares of the common stock of Western States, which assignments and stock were deposited with the bank as collateral in substitution- for the Peters Petroleum Corporation notes.
137. By the application of the bank balance and the income from the leases to the loan, the net balance due the bank on the note, with bank charges due, was, on February 23, 1927, $179,747.50, with interest.
138. The bank agreed to reduce the interest rate from 6% to 4% on condition of payment of the loan.
139. The receivers, on consent of the attorneys for the stockholders’ protective committee and the serial-note holders’ protective committee, petitioned the Court for an order which was granted, allowing the receivers of Western States Oil Corporation to pay the balance due the bank on the loan and take assignment of the Middle States Oil Corporation note together with the collateral securities, the note to be held by the Western States Oil Corporation receivers and to bear interest at 4% per annum.
140. In applying for the order, the receivers represented that Western States Oil Corporation had $331,484.83 on deposit in New York banks, drawing interest at 23/2% per annum, and that the stock of the Louisiana & Northwest Railroad held as collateral was worth very substantially more than the amount still due on the bank loan, and that the oil leases held as collateral had been appraised for the receiver — at a value of $338,000.
141. The railroad had been enjoying substantial earnings, particularly in the years immediately following the discovery of the Haynesville field through which it ran.
142. The railroad had a bond issue outstanding, due in 1935, of over $2,-000,000.
143. The railroad had substantial cash on hand, although the cash was tied up by a claim for recapture of earnings by the Interstate Commerce Commission which was in the process of establishing the value of the railroad property for rate-making purposes.
144. Negotiations were had from time to time concerning the sale of the stock of the railroad.
145. The oil leases which were substituted for the Peters notes and which were claimed to be the property of Western States Oil Corporation, aside from the collateral agreement, were held in the name of N. T. Gilbert, Agent, and later transferred to a newly-organized corporation, M. S. O. Oil Corporation.
146. If the Western claim to the leases is finally determined to have validity, the proceeds received from them, both while in the hands of the bank and while in the hands of Gilbert, Agent, and M. S. O. Oil Corporation, should be credited to Western States Oil Corporation directly and not upon the note obligation.
147. In 1926 Glass considered that the stock of the railroad had a substantial value, holding it for trading purposes at a figure of $1,000,000 but being willing to accept substantially less.
148. Offers were made by the Couch interests, who controlled a competing railroad, to purchase the railroad stock, plus a claim held by the receiver of Reliable in the amount of $94,000 and approximately $93,000 in first mortgage bonds of the railroad held by one of the receiverships, for the sum of $260,000 cash. This offer was made in February, 1926, subject to verification of the balance sheets, earnings statement, and accounts of the railroad.
149. An offer was made by one McNear in April, 1926, subject to a satisfactory investigation of the property, of $350,000 for the stock and the claim of Reliable against the railroad for $94,000 odd.
150. John K. Sague, in June, 1926, made an offer for a client of $425,000 cash for the railroad stock. This was not a firm offer but a representation that the client would be willing to pay such an amount. The receivers replied that they did not feel the offer adequate but that they would be glad to consider a more substantial offer.
151. In June, 1928, Cannon extended to the receivers, reported to Glass, a proposal from a Mr. Watkins, offering $400,000 for the stock of the railroad, the debts against the railroad held by the “oil company”, and the $94,000 in railroad bonds held by Gulf States Corporation, the offer to be in the form of a 60-day option to enable his people to acquire at the then present market $500,000 worth of bonds from third parties.
152. Glass did not consider the Watkins offer reasonable and Watkins was so advised.
153. Later, in 1932 and 1933, efforts were made by Glass to sell the railroad stock or trade it for oil properties, without success.
154. The efforts to sell the railroad stock were not successful and when the bond issue in 1935 matured, railroad earnings had fallen drastically.
155. The value placed upon the railroad property by the Interstate Commerce Commission was approximately $1,600,000, which was less than the face amount of the railroad bonds outstanding ; the railroad went through a section 77 reorganization from which it emerged in 1939, the receivers of Western States Oil Corporation receiving for the entire capital stock of the railroad which had been held as collateral for the Chatham-Phenix note, a relatively small percentage of capital stock of the reorganized railroad.
156. This new stock was sold December 31, 1942 by the receiver of Western States Oil Corporation to Middle States Petroleum Corporation, which now controls the railroad partly through other stock received by it for bonds of the railroad either held by the various companies at the time of the receivership or later acquired by them or by Middle States Petroleum Corporation.
157. The receivers of Western States Oil Corporation received $31,399.79 for the stock, a fair price for the stock on the date of its sale to Middle States Petroleum.
158. Had they received the amount due upon the Chatham-Phenix note, Western States Oil Corporation would have been solvent and its stock would have had some value.
The Advances or Diversions of Funds of the Corporations in Receivership to MSP
159. During the receiverships, prior to reorganization, temporary loans were made by the receivers Mayer and Tumulty, and later by Glass and Tumulty, from one receivership estate to another.
160. This was done without Court order in reliance upon the order of appointment requiring the properties and business of all the companies to be administered as an entirety.
161. After reorganization the practice of making loans continued in the form of loans or advances to Middle States Petroleum Corporation.
162. Until December 31, 1933, these advances were included in the receivers’ accountings filed with the Special Master through the receivers’ twenty-fifth accounting, at which time they totaled $769,634.34.
163. Thereafter, the advances continued until, on December 31, 1947, they amounted to a total of $1,454,578.52, not including amounts advanced by Eureka and Mid-states Oil Corporation.
164. The amounts advanced to Middle States Petroleum Corporation were as follows:
Columbia Petroleum Corporation 41,553.85
Dominion Oil Company 18,025.31
Federal Oil Marketing Corporation 532.730.59
Gulf States Oil and Refining Corporation 305,935.04
Pawnee Osage Oil and Gas Company 59,021.79
Plains Petroleum Company, Inc. 34,279.95
Ranger Texas Oil Company 540.63
Southern States Oil Corporation 301.195.59
Sure Oil Corporation 26,765.71
Western States Oil Corporation 134,530.06
$1,454,578.52
Values
165. The receivers and the reorganizers estimated the going-concern fair market value at the time of the sales of all the assets of the corporations in receivership less the minority interests therein and plus the assets to be contributed under the plan by the Westervelt Committee to be approximately $6,-000,000.
166. They considered a fair bid for the assets at the sales which were held, to be the amount bid at the sales which was as follows:
On the United Oil Producers Corporation bond foreclosure sale, for the Eureka stock $1,450,000
On the O.L.D. bond foreclosure sale, for the pledged United Oil Producers Corporation bonds and O.L.D. Operating Company stock 225.000
On the serial-note foreclosure sale of the pledged Southern States Oil Corporation stock 500.000
On the Phelan suit sale for the unpledged assets of Middle States Oil Corporation 1,300,071
On the Phelan suit sale for the unpledged assets of Imperial 175.009
On the Phelan suit sale for the unpledged assets of United Oil Producers Corporation 200.010
On the Phelan suit sale for the unpledged assets of O.L.D. 150,008
a total of . .$4,000,100
Plus the assumption of receivers’ liabilities and costs amounting to approximately ..................... 650,000
most of which was composed of interreceivership obligations.
167. The bidders acting for the reorganization committee bid in the foreclosure sale on the United Oil Producers Corporation bond indenture $1,450,000 for 100% of the stock of Eureka, whose principal asset was 82.44% of the stock of Turman. Turman was solvent and, during the receivership, highly valuable wells had been brought in on three leases in the Seminole field in Oklahoma, of which three leases Turman was part owner.
168. Bid prices for $10 par value stock of Turman during the period January 1,1929 to April 10,1929 had ranged from $4 to $7 per share, asked prices from $6 to $11. During the period April 10, 1929 to October 10, 1929 bid prices ranged from $2 to $5, asked from $4 to $8. During the period October 10, 1929 to April 10, 1930 bid prices ranged from $1 to $4.50, asked $4 to $6. $4 per share was a fair market price for Turman stock at the time of the sale.
169. Turman had a net income in 1929 of $311,972.24; an average annual net income for the five years January 1, 1925 to December 31, 1929 of $198,-519.57, an average annual net income for the five years January 1, 1930 to December 31, 1934 of $81,403.38.
170. Including the Eureka-owned Turman stock at $4 per share, the fair market value of Eureka’s assets, less its liabilities at the time of the sale, was $1,399,841.27.
171. Including the Eureka-owned Turman stock at a capitalization of ten times its average annual earnings for the five-year period 1924 to 1929 inclusive, the fair market value of Eureka’s assets, less its liabilities at the time of the sale, was $1,504,938.78.
172. The inclusion in the income produced of the income from assets acquired in the Turman settlement only from the date of their acquisition, as of January 1, 1928, does not materially affect the value of the Turman stock on a capitalized earnings basis.
173. The 1929 income tax balance sheet of Turman shows a net value applicable to capital stock of $2,725,415.11. Applying adjustments such as discount to present value of future recoveries of salvage values, deduction of actual interim oil recoveries from an engineering estimate of future recoverable oil as of two years previous, and 50% of the engineers’ earlier estimated value applied to remaining undeveloped acreage, the receiver Glass at the time of trial, valued the assets of Turman on December 31, 1929 at an amount $2,446,104.24 in excess of its liabilities.
174. Including the Eureka-owned Turman stock on the basis of that figure for Turman’s net value applicable to stock, the fair market value of Eureka’s assets, less its liabilities at the time of the sale, was $1,520,435.93.
175. Without those adjustments, the income tax return balance sheet, if adjusted in accordance with Schedule 6A (Rec. Exhibit 201) to reflect accrual of interest, provision for receivership expense and general creditor claims pending on December 31, 1929, showed a figure available for stock in Eureka of $2,375,086.15, which, adjusted by reducing the claims receivable to estimated distributive values and eliminating the claims payable pending on December 31, 1929 (which were finally disallowed) gave a figure available for stock in Eureka of $1,971,814.58.
176. Of the various balance sheets in evidence, those entitled to most weight in determining value are those based on capitalized earnings and contemporaneous market values of stock.
177. The bid of $1,450,000 for the stock of Eureka on the foreclosure sale was a fair bid at such a sale.
178. The bidders in the serial-note foreclosure sale bid $500,000 for the 372,821 shares of Southern, representing 65.52% of the shares of Southern States Oil Corporation outstanding, Southern States at the time was insolvent although its stock had some speculative value in view of the uncertainty as to the validity and amount of the Westervelt claims against it, and in view of its stock control over the producing properties of Republic, Plains, Western, and Sure, and of its claim to stock ownership, directly and through Western States, in Gulf States which owned Federal Oil Marketing Corporation and at that time still asserted claim to a controlling interest in Marr, later lost in the New York courts, and to the $12,000,000 Island Refining Corporation claim, lost in June, 1929, in the Court of Appeals for the Second Circuit, further efforts to collect on which were still being pursued by suit through Island Refining’s receivers.
179. The price of Southern States Oil Corporation stock during the period April 10,1929 to October 10,1929 ranged from a low bid of $1 to a high bid of $2.75, from a low asked of $1.25 to a high asked of $3.50; during the period October 10, 1929 to April 10, 1930, from a low bid of $1 to a high bid of $1.50, from a low asked of $1 to a high asked of $3.25.
On October 9, 1929 for 100 shares, $1 was bid, $1.50 asked.
On March 7, 1930 for 100 shares, $1 was bid, $1 asked.
180. The price of $500,000 bid for 372,821 shares of Southern States Oil Corporation at the serial-note foreclosure sale was a fair price.
181. The bidders on the Oil-Lease-Development bond indenture foreclosure sale purchased for $225,000 the assets pledged under the indenture, consisting of $389,900 face amount of United Oil Producers Corporation bonds and 100% of the stock of O.L.D. Operating Company.
182. O.L.D. Operating Company was then insolvent by a substantial margin.
183. The price paid for the pledged Oil-Lease-Development assets was a fair price on foreclosure sale.
184. In the Phelan cause, the bidders purchased the four parcels of free assets for $1,825,100, plus receivers’ liabilities assumed, allocated as follows: the free (unpledged) assets of Middle States Oil Corporation for $1,300,071, plus receivers’ liabilities of approximately $640,-000; the free (unpledged) assets of Imperial for $175,009, plus receivers’ liabilities of $902.02; the free (unpledged) assets of United Oil Producers Corporation for $200,010, plus receivers’ liabilities of $361.61; and the free (unpledged) assets of Oil Lease Development for $150,008, plus receivers’ liabilities of $16,064.45.
185. The free assets of Middle States Oil Corporation consisted principally of accounts receivable from other companies in the receivership, claims for income tax refund and other current assets totalling about $940,000, claims against, and stock in, other companies in receivership. Receivership liabilities assumed by the purchasers approximated $640,000, owing principally to other companies in the receivership.
186. $1,300,071, plus assumption of the receivership liabilities of approximately $640,000, ($555,729.30 to other companies in the receivership, $81,775.19 for receivership expenses) was a fair price for the free assets of Middle States Oil Corporation on a forced sale in receivership.
187. The free assets of Imperial Oil Corporation consisted of claims receivable from associated companies and stock in United Oil Producers Corporation and Wichita, both insolvent.
188. $175,009, plus assumption of receivership liabilities of $902.02, was a fair price for the free assets of Imperial on a forced sale in receivership.
189. The free assets of United Oil Producers Corporation consisted of claims receivable from associated companies.
190. $200,010, plus assumption of receivership liabilities of $361.61, was a fair price for the free assets of United Oil Producers Corporation on a forced sale in receivership.
191. The free assets of Oil Lease Development consisted of cash accounts receivable of $25,700, of claims against associated companies and of a claim to stock of Gulf States.
192. $150,008.22, plus assumption of receivership liabilities of $16,064.45, was a fair price for the free assets of Oil Lease Development on a forced sale in receivership.
193. Timely notice was given by publication of the sales, in accordance with Court order. The order (decree dated November 22, 1929) required the filing of a statement by the receivers of the assets to be sold and liabilities to be assumed.
194. The statement filed (Receivers’ Exhibit 122) was wholly inadequate to inform bidders as to the assets to be sold, the receivers’ liabilities to be assumed by the bidders, and the status of the government tax claims and receivers’ claims for tax refunds.
195. The first, second and third reports of the receivers dated June 29, 1925, April 11, 1927 and May 7, 1928 had outlined the then progress of the tax situation.
196. The plan of reorganization available since June, 1929, had made it plain that all or almost all the tax claims were expected to be defeated and refunds of substantial amounts obtained.
197. The statement filed in court was in itself misleading in that it listed large government tax claims without reference to the favorable progress of the tax litigation.
198. It is unlikely that any prospective bidder would stop at perusal of the statement without further inquiry of the receivers.
199. Tentative valuation balance sheets, the Ligón (engineers’) appraisal of physical properties as of December 31, 1927, and the books of the receivers, were available to anyone inquiring for the purpose of bidding.
200. The complexities of the inter-corporate relationships, and of bringing down to date the valuations of physical assets and adjusting them to their book listing for the intervening periods were so great that no prospective bidder could have obtained sufficient information to judge independently without assistance from someone in the receivers’ organization the value of the assets sold within the period from the filing of the statement to the sales.
201. Prior to confirmation of the sales on December 24, 1929, the Court, without the knowledge of the receivers, had obtained from Cannon, assistant to the receivers, Cannon’s analysis of the plan and of the value of the assets of the corporations in receivership. Cannon felt that the plan was based on too high an estimate of the underlying values.
202. So far as it is possible to determine values now, it appears that the bid prices were fair and that the general impression held by the reorganizers of a going-concern value of approximately $6,000,000 for all the assets to be acquired by the sales and otherwise by the new company was justified.
203. The receivers made no affirmative effort to inform non-depositing United bondholders of facts upon which the bondholders could determine for themselves whether acceptance of securities under the plan or cash distributive values would be in the bondholders’ best interests.
Sales in the Ancillary Jurisdictions
204. In 1933 various of the operating subsidiaries still in receivership, Plains, Corona, Central States, Number One, Leahy, and Peters Leahy, possessing scattered properties in Oklahoma, were assessed $1,000 tax assessment per year each for the period 1926-1934 by officials known as tax ferrets. No franchise or license taxes had been paid in Oklahoma for some years on the theory that operation was by the receivers rather than by the corporation.
205. The corporations referred to in the preceding paragraph had relatively small operating properties, nearing the end of their economic usefulness. Decision was reached to terminate their operations as separate corporations. Similar decisions were reached as to other subsidiaries.
206. Ancillary receiverships were either reopened or begun in the districts where the properties lay in the Northern and Eastern Districts of Oklahoma.
207. One Blackburn, as agent for Middle States Petroleum Corporation