
    John Walsh, vs. American Republics Corporation, a corporation organized and existing under the laws of the State of Delaware.
    
      New Castle,
    
    
      Feb. 9, 1934.
    
      
      Clarence A. Southerland, of the firm of Ward & Gray, for stockholders’ committee.
    
      Caleb S. Layton, of the firm of Richards, Layton & Finger, for objecting preferred stockholders.
    
      Hugh M. Morris, for receivers.
   The Chancellor,

without filing an opinion, declined to express either approval or disapproval of the plan. He took the view that inasmuch as the application was based on the assumed solvency of the corporation and his approval was sought as an incident merely to the discharge of the receivers and the restoration of the corporate control to the officers and stockholders, it was doubtful if a decree either of approval or disapproval would, the matter coming up as it did, be an adjudication that would bar subsequent suits, which would doubtless be inaugurated, attacking the power of the corporation to alter its stock structure in the manner proposed. He held further that the corporation, if it had the power under the law which the committee contended it had, did not need the approval of the Chancellor to buttress it. He declared his purpose to be that he would in due course enter an order discharging thie receivers. Thereafter the corporation could, if it saw fit, proceed by way of amendment of its charter to effectuate the re-organization of its capital structure in the manner now proposed. If any preferred stockholder considered that such amendment was unlawful, the matter of its legality could be raised by a bill filed in the regular way and thus the questions which the pending petition sought to bring forward in a rather unusual and doubtful manner could be heard in the customary course of equity procedure, and finally and conclusively settled. It did not appear to him, he said, to be proper for the Chancellor to pass upon a re-classification of a corporation’s stock when the question was presented in connection with and as a condition for the contemplated discharge of the receivers of a corporation which, though once insolvent, had since attained a condition of solvency.  