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.
Last modified: February 3, 2019