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This entry was published on 2014-09-22
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SECTION 122
Procedure of reorganization and expenses in connection therewith
Real Property (RPP) CHAPTER 50, ARTICLE 4
§ 122. Procedure of reorganization and expenses in connection
therewith. The reorganization plan may be presented to the court with
the complaint for foreclosure, or thereafter by the trustee or by any
persons owning or representing twenty-five per centum of the principal
amount of the securities covered by such mortgage, deed of trust or
indenture at any time prior to the foreclosure sale. The plan shall
contain a statement of the minimum and maximum sums which the trustee
shall bid for the property, which sums may be varied by the court upon
its approval of the plan; and the trustee shall not incur any liability
by reason of its failure to bid more than said maximum sum. The trustee
shall not be liable for any action in executing the plan of
reorganization approved by the court except for its wilful misconduct,
fraud, bad faith or gross negligence. Hearings upon such reorganization
plan shall be at such time and place and upon such notice by
publication, mailing or otherwise, as the court shall fix in an order to
show cause why the plan should not be approved. The trustee and any
person beneficially interested in said mortgage, deed of trust or
indenture, and any person whose rights may be affected by such
reorganization, may appear upon the return day of the order to show
cause or at any adjournment thereof, and submit objections to and
modifications of the plan or an alternate plan, and the court shall hear
the parties by affidavit or summarily or otherwise, as in its discretion
it may direct, and thereupon finally determine the plan of
reorganization and fix the time and method for persons affected by such
reorganization to become parties thereto. Where neither the mortgage or
indenture, nor the statute relating to the particular class of
securities nor any other statute, authorizes the purchase of the
property on behalf of all the holders of bonds or certificates of parts
or shares, then if any holder, within twenty days after the approval of
the plan, shall file with the court a duly acknowledged dissent
therefrom, the court shall determine the cash value of the property as
if sold at a public sale and such dissenting holder shall be entitled to
be secured for his ratable share of such amount as a condition for
declaring the plan effective. In all other cases the reorganization plan
shall be deemed binding on all holders of bonds or certificates of
shares or parts unless within twenty days after the approval of the plan
one-third in principal sum of such holders shall file with the court
duly acknowledged dissents therefrom; in which event the plan may be
abandoned or may be further modified as the court shall direct, with the
same right of dissent as aforesaid as to any subsequently amended plan.
Notice of the court's approval of the plan shall be given by
publication, mailing or otherwise as the court may in particular cases
or by general rule direct. Any person aggrieved by any determination
hereunder shall have such rights of appeal as are granted to a party to
a special proceeding. The expenses and compensation of the trustee and
of any committee or person who shall have submitted a plan of
reorganization or modifications thereof shall be fixed at such sum as
the court may deem reasonable and shall be chargeable as a lien upon the
property or collectible through their assumption by the new corporation
or in such other manner as the court may approve. All proceedings and
appeals in respect to the plan of reorganization shall be entitled to
preference over all other civil causes next in order to actions or
special proceedings in which the people of the state or any officer,
board or political subdivision thereof shall be a party.