Uv industries inc liquidating trust tanzania immigrant and dating
(Fine & Ambrogne, Boston, Mass., of counsel), for defendant-appellant Nest & Co. WINTER, Circuit Judge: This action arose out of Sharon Steel Corporation's ("Sharon") assumption of the liabilities of UV Industries ("UV"), including UV's obligations under certain debentures. This interpleader action is a contest between two classes of holders of a certain issue of UV debentures, the 9 1/4% Senior Subordinated Notes Due April 15, 1987 (the "Notes"), over the interest on the Notes paid by Sharon to U. Trust on April 1, 1980, October 1, 1980, and April 1, 1981 (the "stake"). That Section provided for the declaration of a special record date for payment of such interest after the cure of the default. Therefore, the default on the senior indebtedness was cured, and, even under Section 2.03, U. Trust was able to disburse the interest payments on the Notes previously deposited by Sharon. Under Section 2.03, these payments were to be made to the holders of the Notes as of the special record date (the "Holding Class"). The Selling Class contends that because Sharon deposited the interest payments on the Notes with U. Trust, it never defaulted in payment, and the special record date provision of Section 2.03 was never triggered.
Before FRIENDLY,* CARDAMONE and WINTER, Circuit Judges. However, we remand to the district court a request for attorneys' fees made by Nest & Co., the representative of the appellant class. Trust refused to distribute these amounts to the then holders of the Notes pursuant to Section 13.031 of the U. Trust Indenture (the "Indenture"), which prohibited payment of any monies on the Notes in the event of a default in payment of principal or interest on a senior indebtedness. If this default triggered Section 13.03, then Section 2.032 of the Indenture, which established a mechanism for distributing interest payments on the Notes in the event of a default in payment, was also triggered. Trust declared a special record date of June 30, 1983 for payment of this accrued interest and, of course, interest on this interest.
Y., operating unit of its Babcock Industries subsidiary, to Institut de Selection Animale of Lyon, France, for an undisclosed amount. executed a definitive agreement with a group of investors that it said should enable it to emerge from bankruptcy. announced that it had signed an agreement with several major shareholders to purchase for cash a 27.5 percent interest in First Marine Banks of Riviera Beach, Fla. said it had reached a preliminary agreement to sell ownership interests in four of its generating plants to North Carolina Municipal Power Agency No.3 for an undisclosed amount. agreed to purchase the assets of Riverside Clinic Hospital in Macon, Ga., for more than million.
said it had sold substantially all of the assets of Babcock Poultry Farm Inc., an Ithaca, N.
C., New York City, of counsel), for defendants-appellees Mimi Shapiro and Mortimer Shapiro. Bernard Cedarbaum, New York City (Carter, Ledyard & Milburn, New York City, of counsel), for plaintiff-appellee U. It alleges that the default on the Senior Notes was not the type of default that triggered Section 13.03, and, in turn, Section 2.03. before the expiration of such period of 30 days, such default shall no longer be considered to be continuing under this Indenture).
Stephen Lee Crystal, New York City (Crystal and Driscoll, P. Oxman, Shearman & Sterling, New York, of counsel), for plaintiff-appellee Sharon Steel Corp. The competing class (the "Selling Class"), which consists of those who held the Notes when Sharon deposited the interest payments with U. Trust but subsequently transferred them to members of the Holding Class, contends that use of the special record date mechanism was improper. Trust initiated this action to resolve the question of which of the two classes was entitled to payment. Section 6.01 of the Indenture defines "Event of Default" to include: (a) default in the payment of any instalment [sic] of interest upon any of the Notes as and when the same shall become due and payable, and continuance of such default for a period of 30 days (it being understood that if the entire amount of such payment of interest is deposited by the Company with the Trustee ...
During this time, UV Industries milled and refined ores of copper, lead and zinc at the Midvale property.
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However, Section 13.03 of the Indenture, supra note 1, prohibits the payment of interest on the Notes during the period of default in payment on any senior indebtedness. This default was caused by Sharon's assuming UV's liabilities without acquiring "all or substantially all" of its assets, in violation of the so-called "successor obligor" clauses of the Senior Notes indenture contract. Judge Edelstein held that, since "it is now undisputed that Sharon defaulted on the senior indebtedness, ... [and] the Selling Class [was] 'not entitled to receive' any interest payments." 602 F. However, the default on the senior indebtedness accelerated all payments on the senior indebtedness thereby resulting in a default in payment.
Because Sharon deposited the interest payments with U. Trust, the Selling Class argues, Sharon avoided default on the Notes, and the interest payments should have been distributed to the then holders, the Selling Class. A., supra, that there was in fact a default on senior indebtedness. The Selling Class concedes that there was a default on senior indebtedness but argues that the violation of the successor obligor clause does not amount to a default in payment, as required to trigger Section 13.03.
UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee, the Chase Manhattan Bank, N. Section 13.03 in effect requires a default in the payment of interest on the Notes in the event of a default in payment on senior indebtedness. under Section 13.03, Sharon was prohibited from paying anything on the U. Sharon Steel Corp., 691 F.2d at 1052 ("UV is thus in default on the indentures and the debentures are due and payable.").
A., as Trustee, Sharon Steel Corporation, Inc., UV Industries, Inc., Liquidating Trustand David Finkelstein, Arthur R. Kheel, Edwin Jacobson and Martin Horowitz, as Trustees of the UV Industries, Inc., Liquidating Trust, Plaintiffs, Sharon Steel Corporation, United States Trust Company of New York, Plaintiffs-Appellees,v. Hence, there was a default in payment on the senior indebtedness not cured until May 5, 1983 when the senior debt was paid in full. Since an appellate court cannot undertake the proceedings necessary to judicial consideration of the adequacy of such settlement, we remand to the district court for proceedings under Rule 23(e).
signed a definitive agreement for their previously announced $800 million merger. * UV Industries Inc.'s liquidating trust trustees announced a distribution of $10 per unit of beneficial interest in the trust.