Felix Frankfurter

“ Thereafter, respondents, the trustees under the Burnside plan, and various certificate holders brought this action in the New York Supreme Court to determine petitioner's right to participate as holder of certificates acquired by the insolvent guarantor. Petitioner's claim for parity of treatment was denied, but his denial was reversed by the Appellate Division, 266 App.Div. 543, 42 N.Y.S.2d 528, which in turn was reversed by the Court of Appeals. It held that state law governed and that New York subordinated the guarantor's certificates. ”

“ Nor did the closing of the reorganization reserve jurisdiction, as did the Geist closing order. The provisions for disposition of the impounded funds in case subordination be determined are much more elaborate than the Geist case discloses. In short, while the provisions for adjudication of the parity question in the Geist case clearly contemplated determination of it as part of the reorganization proceedings by the bankruptcy court itself, in the present case the bankruptcy court washed its hands of the problem and left the parties to litigate the question in another forum. ”

“ Awotin v. Atlas Exchange Nat. Bank, 295 U.S. 209, 55 S.Ct. 574, 79 L.Ed. 1393; Brady v. Southern Ry. Co., 320 U.S. 476, 479, 64 S.Ct. 232, 234, and cases cited; Illinois Steel Co. v. Baltimore & Ohio R. Co., 320 U.S. 508, 511, 64 S.Ct. ”