Section 25 -- Reorganization Plans; Reports by Commission
Filing of reorganization plan and other information with
Commission. Any person who, by use of the mails or any means or instrumentality
of interstate commerce or otherwise, solicits or permits the use of his name
to solicit any proxy, consent, authorization, power of attorney, ratification,
deposit, or dissent in respect of any plan of reorganization of any registered
investment company shall file with, or mail to, the Commission for its information,
within twenty-four hours after the commencement of any such solicitation,
a copy of such plan and any deposit agreement relating thereto and of any
proxy, consent, authorization, power of attorney, ratification, instrument
of deposit, or instrument of dissent in respect thereto, if or to the extent
that such documents shall not already have been filed with the Commission.
Advisory report by Commission at request of shareholders.
The Commission is authorized, if so requested, prior to any solicitation of
security holders with respect to any plan of reorganization, by any registered
investment company which is, or any of the securities of which are, the subject
of or is a participant in any such plan, or if so requested by the holders
of 25 per centum of any class of its outstanding securities, to render an
advisory report in respect of the fairness of any such plan and its effect
upon any class or classes of security holders. In such event any registered
investment company, in respect of which the Commission shall have rendered
any such advisory report, shall mail promptly a copy of such advisory report
to all its security holders affected by any such plan: Provided, That such
advisory report shall have been received by it at least forty-eight hours
(not including Sundays and holidays) before final action is taken in relation
to such plan at any meeting of security holders called to act in relation
thereto, or any adjournment of any such meeting, or if no meeting be called,
then prior to the final date of acceptance of such plan by security holders.
In respect of securities not registered as to ownership, in lieu of mailing
a copy of such advisory report, such registered company shall publish promptly
a statement of the existence of such advisory report in a newspaper of general
circulation in its principal place of business and shall make available copies
of such advisory report upon request. Notwithstanding the provision of this
section the Commission shall not render such advisory report although so requested
by any such investment company or such security holders if the fairness or
feasibility of said plan is in issue in any proceeding pending in any court
of competent jurisdiction unless such plan is submitted to the Commission
for that purpose by such court.
Enjoinder of plan of reorganization. Any district court
of the United States in the State of incorporation of a registered investment
company, or any such court for the district in which such company maintains
its principal place of business, is authorized to enjoin the consummation
of any plan of reorganization of such registered investment company upon proceedings
instituted by the Commission (which is authorized so to proceed upon behalf
of security holders of such registered company, or any class thereof), if
such court shall determine that any such plan is not fair and equitable to
all security holders.
Application of section to reorganizations under bankruptcy.
Nothing contained in this section shall in any way affect or derogate from
the powers of the courts of the United States and the Commission with reference
to reorganizations contained in title 11 of the United States Code [11 USCS
§ § 101 et seq.].
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