Garrett McEnerney II, as executor of the will of Garrett W. McEnerney, deceased.-Petitioner requests an allowance of $25,000 for services rendered by Garret W. McEnerney and his associates as San Francisco counsel for A. C. James Co., and an allowance of $86.16 for reimbursement of their expenses during the period November 1, 1939, through August 3, 1942.

The services of San Francisco counsel consisted in large measure in advising New York counsel on matters of procedure in the district court and the circuit court of appeals, the preparation of various orders and stipulations connected with the proceedings before the district court and the circuit court, including numerous conferences with other counsel, appearances in court at times with New York counsel on the more important phase of the proceeding, and at times alone on administrative matters. Of the total of 1,4651⁄2 recorded hours devoted by counsel to these proceedings, 731⁄2 hours represent time of Garret W. McEnerney, 8562 hours by Andrew W. Burke, and 5351⁄2 hours by other associates in the employ of McEnerney.

First-mortgage trustees.-The Crocker First National Bank of San Francisco, as corporate trustee, and Samuel Armstrong, as individual trustees under the debtor's first mortgage, under which there are $49,290,100 bonds outstanding, request individual allowances of compensation for services rendered and for reimbursement of expenses incurred in connection with the reorganization proceedings and plan. Armstrong is the vice president of the Chase National Bank of New York in charge of the corporate trust department of the bank, and although individual trustee under the debtor's first mortgage, his responsibility as individual trustee has been considered to be the responsibility of the corporate trust department of the bank, and the facilities of the corporate trust department have been used in connection with rendering services, as well as the facilities of the railroad department of the bank. Separate allowances also are requested by the firm of Chickering & Gregory, their San Francisco counsel, and by the firm of Milbank, Tweed & Hope, their New York counsel.

The corporate trustee requests allowances of $23,750 as compensation for services rendered during the period November 1, 1939, through July 31, 1944, and $1,090.04 for reimbursement of expenses during that period, and $2,100 as compensation for services to be rendered and $200 for reimbursement of expenses to be incurred thereafter to the termination of the proceedings. Armstrong requests allowances of $10,000 as compensation for services during the entire period in question, and $2,191.90 for reimbursement of expenses incurred to August 28, 1944, and for expenses thereafter to be incurred through December 31, 1944.

The firm of Chickering & Gregory requests allowances of $25,000 as compensation for services rendered and $414.19 for reimbursement of expenses incurred during the period November 1, 1939, through July 31, 1944, and $2,500 as compensation for services to be rendered and $50 for reimbursement of expenses to be incurred thereafter to the termination of the proceedings. The firm of Milbank, Tweed & Hope requests allowances of $45,000 as compensation for services during the entire period in question, and $759.05 for reimbursement of expenses incurred to August 28, 1944, and for expenses thereafter to be incurred, estimated at $100, through December 31, 1944. In respect of the latter item, expenses of $58.34 have been incurred to October 24, 1944.

In fixing maximum allowances for these petitioners for the period prior to November 1, 1939, we stated in our report of May 27, 1940, supra, that while we recognized that the existence of the two separate trustees arose out of the provisions of the mortgage indenture, we were of the view that the fact that there were two trustees should not be permitted to operate in such a manner as to increase unnecessarily the cost to the debtor's estate of the extraordinary services necessitated by the reorganization proceeding. Believing that there had not been a reasonable division of work by the petitioners, we fixed one joint allowance for the trustees and another joint allowance for their counsel. From our review of the record, it appears that while there has been the closest of cooperation between the two trustees, the services performed by each, especially in respect of matters relating to the administration of the debtor's properties, has been largely duplicated. For instance, both trustees were advised by their San Francisco counsel of the matters involved in the numerous petitions and orders filed in the proceedings, and after study and consideration, the two trustees would agree upon a course of action to be taken and would so advise counsel. If the matters required legal advice, Armstrong would confer with the trustees' New York counsel, and the corporate trustee would confer with San Francisco counsel. San Francisco counsel would appear for both of the trustees in most of the administrative matters requiring attendance in court. As will be discussed hereinafter, New York counsel bore the brunt of work in connection with the proceedings relating to the plan of reorganization. Under these circumstances, we shall again fix a joint maximum allowance for the two trustees, leaving the division to be made as the parties see fit or as the court may direct. While certain of the services performed by counsel related to the same matters, their services on the whole are sufficiently distinguishable to warrant and to enable us to fix separate maximum allowances for them.

While many of the administrative matters involved were of a routine nature, others were of considerable importance. Among these were the proposals for refunding or the paying off of the trustees' certificates; the proposal for issuance of $600,000 preferred stock of The Salt Lake City Union Depot and Railroad Company and the retirement of $557,000 outstanding bonds of that company; consent to the dissolution of the Deep Creek Railroad Company; and pending decision of the Supreme Court on the plan of reorganization, maintenance of 23 separate escrows established by the reorganization trustees.

In addition to the services rendered by the mortgage trustees in the above matters, they also performed services in connection with the plan, consisting of conferring with counsel and other parties and determining the position to be taken by them on the plan and at the pretrial conference and the subsequent hearing before the district court on the approval of the plan, conferring with counsel and other parties on questions relating to the position taken by the first-mortgage trustees in support of the plan in the circuit court of appeals and Supreme Court, making numerous statistical analyses having a bearing on the plan, including analyses with respect to the values and earning power of companies affiliated with the debtor, analyzing reports prepared by the management and by experts employed by other parties, and studying and conferring with counsel and other parties with respect to various proposals to develop a different or compromise plan. As previously indicated, the services performed by Chickering & Gregory were for the most part connected with matters involving the administration of the debtor's properties. These services entailed attendance at more than 85 court hearings, as well as conferences and correspondence with the first-mortgage trustees and the officers of the debtor and counsel for the reorganization trustees concerning the numerous petitions filed in the proceedings and the orders entered by the court in respect thereof. Counsel also assisted to some extent in the peparation of the briefs filed on behalf of the first-mortgage trustees in support of the plan of reorganization. San Francisco counsel also advised and conferred with New York counsel with reference to California law and procedure. The total recorded time devoted to these matters by the firm of Chickering & Gregory amounted to 63434 hours, practically all of which represents the time of partners and senior associates. Counsel estimate that the actual time spent by them exceeds the recorded time.

The responsibility of the firm of Milbank, Tweed & Hope has been that of representing the first-mortgage trustees in matters requiring activity in New York City and the East including advising with the individual trustee and acting as a medium of communication with counsel for the institutional bondholders committee. Their services

have been primarily in connection with the litigation relating to the plan. Since they alone had represented the first-mortgage trustees in the proceedings before the Commission, they had the chief responsibility of representing the first-mortgage trustees in the proceedings before the district court and the circuit court of appeals. In the proceedings before the Supreme Court, they alone represented the first mortgage trustees.

In the initial phases of the proceedings, counsel confined themselves to the controversy concerning the extent of the liens of the first mortgage and the refunding mortgage. While they continued to devote their services primarily to the lien controversy, they also actively supported the approved plan in its entirety.

In cooperation with counsel for the institutional bondholders' committee, counsel drafted the portions of the stipulation of facts relating to the lien controversy, filed at the hearing on the plan before the district court, participated actively in the pretrial conference and the hearings before the district court, and in the proceedings before the circuit court of appeals and the Supreme Court, bearing, as previously indicated, the burden of supporting the priority of the lien of the first mortgage throughout those proceedings. Counsel, in cooperation with San Francisco counsel, also took an active part in the proceedings relating to the proposals for the refunding of the trustees' certificates, the first-mortgage trustees' position coinciding with those of the institutional bondholders' committee and the Finance Corporation. They also participated actively in the negotiations in respect of the proposed compromise plan subsequent to the decision of the Supreme Court approving the plan and have also performed services in respect to the consummation of the plan.

The firm of Milbank, Tweed & Hope have devoted a total of 2,3964 recorded hours to these matters from November 1, 1939, to October 19, 1944, of which 1,99314 hours were spent by members of the firm and senior associates, and 4031⁄2 hours were spent by junior associates. Irving Trust Company.-Petitioner, as trustee under the debtor's general and refunding mortgage, requests allowances of $7,500 as compensation for its services rendered and to be rendered during the period November 1, 1939, through December 31, 1944, and $3,738.48 for reimbursement of its expenses during that period, and $33,925 as compensation for services rendered by its New York counsel, the firm of Davies, Auerbach, Cornell & Hardy, and $12.27 for reimbursement of that firm's expenses incurred during that period, and $7,500 as compensation for services rendered and to be rendered by its San Francisco counsel, the firm of Pillsbury, Madison & Sutro, during that period. Outstanding under the refunding mortgage are $18,999,500 of bonds, all of which have been pledged, in varying amounts, with

three creditors of the debtor, namely, A. C. James Co., Railroad Credit Corporation, and the Finance Corporation.

By far the greater part of the services rendered and expenses incurred by petitioner and its counsel were in connection with questions which were raised as to the extent of the lien of the first mortgage and the refunding mortgage. In this respect, petitioner and its New York counsel took the responsibility of presenting, briefing, and arguing the lien controversy on behalf of the refunding bonds in the district court, the circuit court of appeals, and the Supreme Court. Petitioner and its New York counsel also followed closely the entire proceedings on the plan, but avoided duplication of services in respect of matters in which holders of refunding bonds appeared and stated their position.

In addition to the services rendered in connection with the plan, the petitioner and its counsel performed services in respect of the administrative matters previously described herein.

Petitioner kept no record of the time devoted to these matters. The firm of Davies, Auerbach, Cornell & Hardy devoted a total of 1,216 recorded hours to these matters, of which 874 hours represented time spent by partners and 342 hours of associates. Counsel estimate that the actual time spent by them on these matters exceeds the recorded time by at least 10 percent.

The firm of Pillsbury, Madison & Sutro spent 420 recorded hours on these matters, of which 195 hours represent the time of partners, and 225 hours of associates. Counsel estimate that they spent time in excess of the recorded time. The firm estimates 15 additional hours after August 31, 1944. The nature of their services were similar to those performed by other local counsel.

Western Pacific Railroad Corporation.-This company is an unsecured creditor of the debtor and holder of all of its preferred and common stock. While petitioner did not participate in the proceedings before the Commission, apparently relying upon the efforts of the debtor's counsel and counsel of the A. C. James Co., following the certification of the plan to the district court, petitioner employed the firm of Sloss & Turner to represent it in the proceedings before the district court. This firm continued to represent the petitioner directly throughout the proceedings.

Petitioner requests an allowance of $26,260.77 for reimbursement of expenses incurred during the period November 1, 1939, to the termination of the proceeding. Of this amount, $22,700 was paid to Sloss & Turner for legal services up to November 28, 1941, the date of the decision of the circuit court of appeals. Expenses totaling $2,291.66 were incurred in connection with special meetings of the stockholders of the corporation held at Wilmington, Del., during the period Decem