OAKES, Circuit Judge:
This is an appeal of Hoos & Co. (claimant or Hoos) from a decision and order of the United States District Court for the Southern District of New York, Charles E. Stewart, Jr., Judge. That decision and order dismissed an appeal from an order of Bankruptcy Judge Edward J. Ryan which disallowed Hoos' $200,000 claim against Dynamic Corporation of America (debtor or Dynamics), a Chapter XI debtor. We affirm.
In September, 1968, Marine Midland Bank-New York (Marine-New York) acquired in a private placement $500,000 of debtor's negotiable notes. Of these, $200,000 principal amount was held by Marine-New York and Marine Midland Bank-Central (Marine-Central) as cotrustees for the benefit of the Carrier Corporation Retirement Trust (Carrier Trust). The remaining $300,000 was held by Marine-New York in other accounts, registered in the names of Hoos and Jaquith & Co. (Jaquith), nominees of Marine-New York; the $200,000 of notes in issue (Carrier notes) were registered in the name of Hoos alone.
In January, 1972, Marine-New York ceased acting as cotrustee of the Carrier Trust, and Marine-Central became the sole trustee. In the earlier months of 1972, at the direction of Theodore Lipp, a pension trust officer of Marine-New York, the assets of the trust were physically delivered to Marine-Central. Most of the securities in the trust were thereafter reregistered in the name of Marine-Central's nominee, Carsec & Co. (Carsec). However, the Carrier notes were not actually reregistered, although the officers of Marine-New York and Marine-Central believed that the reregistration had occurred.
On August 2, 1972, the debtor filed its petition for an arrangement under Chapter XI of the Bankruptcy Act, 11 U.S.C. §§ 701-99 (1970 & Supp. V 1975). At this time Marine-New York held $300,000 of the debtor's notes, and the Carrier notes were held by Marine-Central, still registered in the name of Hoos. Six days later, on August 8, Mr. Lipp attended a meeting of creditors. Lipp subsequently received a letter dated August 23, 1972, from Stanley Tulchin, secretary of the then unofficial creditors' committee, confirming that the August 8 meeting had been held and that a creditors' committee had been elected. Tulchin enclosed a proof of claim, and requested its prompt execution and return so that it would be available at the next creditors' meeting before the referee in bankruptcy scheduled for September 11, 1972. Tulchin advised that the claim would be filed with the referee and would be used to select a trustee and to make the committee official.
On September 8, 1972, Mr. Lipp returned a proof of claim for $300,000,
Joint Appendix at A2. The critical part of the letter for purposes of this appeal stated:
Id. Unless the letter of Mr. Lipp to the unofficial creditors' committee secretary constituted a proof of claim, as claimant urges, no written proof of claim for the
The schedules of creditors filed by the debtor on October 5, 1972, indicated that $500,000 of the debtor's notes were registered to Marine-New York or its nominees. This debt included the $300,000 of notes as specified in the formal proof of claim accompanying Mr. Lipp's letter to Mr. Tulchin, as well as the Carrier notes.
As of September 30, 1973, Bankers Trust replaced Marine-Central as trustee of the Carrier Trust, see note 2 supra, and the assets of the trust including the notes of the debtor, which unbeknownst to either Marine-New York or Marine-Central remained registered in the name of Hoos, were transferred to Bankers Trust. Bankers Trust apparently unsuccessfully attempted to have registration of the notes transferred to its nominee, but it did not file a proof of claim for the notes in question.
On November 27, 1974, an order of confirmation was entered by the bankruptcy court. At that time the $500,000 registered in nominees of Marine-New York and of Marine-Central still appeared on the debtor's original schedules. Since a proof of claim had been filed only for $300,000, distribution was made only with respect to that proof of claim. No distribution was ever made with respect to the additional $200,000 of Carrier notes.
It was not until April, 1975, over four months after confirmation of the plan of arrangement, that Bankers Trust asked Marine-New York to file an application for allowance of the claim emanating from the Carrier notes through its nominee, Hoos.
II. Prior Disposition
The bankruptcy judge denied the application on two grounds. First he held that the September 8, 1972, letter did not set forth an explicit demand against the estate of the debtor. Thus it did not constitute an effective proof of claim,
The district court held that while it might have been "inclined to hold" that the letter of September 8 constituted a proper proof of claim, In re Dynamics Corp. of America, No. 72B750, at 2 (S.D.N.Y. May 17, 1977) (oral opinion), filing with the secretary of the creditors' committee was not a proper filing within Rule 509(c). Judge Stewart first noted that "Tulchin, as secretary of the Creditors' Committee, [did] not come within the language of [Rule 509(c)] as one of the named individuals to whom delivery of a proof of claim may be deemed a valid filing."
We agree with the bankruptcy court that the letter of September 8, 1972, from Mr. Lipp of Marine-New York to Mr. Tulchin was not a valid and effective proof of claim
From an equitable standpoint it could be argued that when registered notes are in issue the filing of valid proofs of claim serves no useful purpose, especially where, as here, the debtor is entirely aware that the notes are outstanding and even includes the debt in its schedules. Be that as it may, Congress chose to require the filing of proofs of claim for such notes.
Subsequent communications between the debtor and Marine-New York reveal the nonexistence of any formal proof of claim. In response to a letter from the debtor's controller dated December 31, 1973, requesting "information regarding our indebtedness to you," Joint Appendix at A17, Mr. Hildum, Trust Operations Officer of Marine-New York, on March 12, 1974, identified only the $300,000 of notes held in the names of Hoos and Jaquith, but did not refer to the $200,000 of Carrier notes which remained registered in the name of Hoos. Claimant explains that the letter from Mr. Hildum did not refer to the Carrier notes because in September, 1973, Bankers Trust Company (Bankers Trust) had replaced Marine-Central as trustee of the Carrier Trust.
Fed.R.Bankr.P. 301. The Rule became effective on October 1, 1973, by order of the United States Supreme Court. It is applicable "to proceedings . . . pending [at the time it became effective], except to the extent that in the opinion of the court [its] application in a particular proceeding then pending would not be feasible or would work injustice, in which event the former procedure applies." 411 U.S. 989, 991 (1973). As to the propriety of applying the former procedure to this case, see note 11 infra.
Fed.R.Bankr.P. 509(c). It became effective on October 1, 1973, at the same time as Rule 301. See note 6 supra. It is made applicable to Chapter XI proceedings by Rules 11-33(b)(1) and 302(b) of the Rules of Bankruptcy Procedure.
Provision for a standby trustee in Chapter XI reorganizations is made under Rule 11-27 of the Rules of Bankruptcy Procedure. As the Advisory Committee's note makes clear, a standby trustee does not function while the Chapter XI proceeding is pending. Thus the nomination of Mr. Tulchin as such a trustee is meaningless, since the position has no substance where, as here, the Chapter XI case has not been converted to a bankruptcy proceeding.
H.R.Rep.No.122, 90th Cong., 1st Sess. (1967) (reprinted in S.Rep.No.751, 90th Cong., 1st Sess. (1967), U.S.Code Cong. & Admin.News 1967, p. 1996. See 9 Collier on Bankruptcy, supra, at ¶¶ 7.09-.09[3.1] & 7.25.
Fed.R.Bankr.P. 11-33(b)(2)(A). The Rule became effective on July 1, 1974, see note 7 supra, prior to the confirmation in this case. However, the result would be the same under the similar superseded provisions. See note 15 supra; 9 Collier on Bankruptcy, supra, at ¶ 7.09. See also Rule 906(b):
Rule 11-63(2) adds to Rule 906(b) a reference to 11-33(b)(2):
Of course, here, no action was taken by anyone within 30 days after notice of confirmation was mailed.