Knowledge that Transforms

Tn. expanding equitable powers of bankruptcy courts loom as an encouraging safeguard to creditors and investors in proceedings under the Bankruptcy Act. The difficulties of drafting legislation comprehensive enough to encompass the diverse problems encountered in distributing the assets of and the control over debtors' estates have become increasingly apparent. By emphasizing equity power, the Supreme Court has provided a means of filling in gaps in the Act and of supplementing the technical confines of statutory provisions.' A significant step in extending the equitable functions of bankruptcy courts was taken by the Court in a recent case2 involving a municipal composition under Chapter IX of the Chandler Act.3 Unable to service or meet maturity dates on its indebtedness, the City of Avon Park, Florida, contracted for the services of R. E. Crummer & Co. as its fiscal agent in a proposed refunding plan.4 The contract provided for compensation to Crummer by a four per cent assessment against participating bondholders, subject to a reduction to two per cent if bondholders sold accrued interest coupons to the fiscal agent