Benjamin N. Cardozo

“ The pay for referees is no longer involved in uncertainty as to the applicable percentage. By mischance there is still uncertainty at times as to the principal amount to which the rate of to be applied. In cases of composition the principal is 'the amount to be paid to creditors upon the confirmation,' and before we can compute what is due we must know what payment is. ”

“ Whether he was entitled to as much, we do not now determine, the creditors and the bankrupt, who were at liberty to oppose, having preferred to acquiesce. For present purposes, it is enough that he was not entitled to more. The bonds had a value in the market that would have made it possible for a creditor to convert them into money at 22 per cent. of par. If present values were to be estimated, this was the present value of the promise of the debtor as of the date of composition. To find anything in addition would be to capitalize a hope. ”

“ The time for the payment of the principal was postponed until October 1, 1943; the rate of interest was lowered from 6 per cent. to 5; the interest accruing semiannually before October, 1943, was to be payable only out of earnings, but the liability was to be cumulative, and upon maturity of the principal was to be discharged in full; the creditors were to be represented on the board of directors; and there were to be restrictions on investments and on the creation of new debts. The composition did not call for the cancellation or surrender of bonds then outstanding. ”