fair and equitable
Definitions from Case Law · United States Supreme Court
Definitions from Case Law
From 308 U.S. 106 - Case v. Los Angeles Lumber Products Co. · 1939Most cited · 1,565 citing opinions
words of art which prior to the advent of § 77B had acquired a fixed meaning through judicial interpretations in the field of equity receivership reorganizations
How the Supreme Court has restated “fair and equitable”
Each Supreme Court definition of “fair and equitable,” sized by how often later courts cited it. “Change” is measured by wording overlap with earlier definitions — a rough signal, not a semantic judgment.
How often courts cite the cases defining “fair and equitable”
Court decisions citing the 6 opinions that defined “fair and equitable” — 4,346 in all, by decade. Counts are citations to the defining cases as a whole, not verified uses of the term. The dip in the most recent years is a data-coverage gap, not a real trend — our corpus holds fewer opinions from the latest years.
All 6 definitions, chronological · 1939–1970
- 1940·310 U.S. 434 - Securities & Exchange Commission v. United States Realty & Improvement Co.[p16]· cited 1,287×
words of art' having a well understood meaning in reorganizations in equitable receiverships and under § 77B which is incorporated in the structure of both Chapters X and XI. The phrase signifies that the plan or arrangement must conform to the rule of Northern Pacific Ry. Co. v. Boyd, 228 U.S. 482, which established the principal... that in any plan of corporate reorganization unsecured creditors are entitled to priority over stockholders to the full extent of their debts and that any scaling down of the claims of creditors without some fair compensating advantage to them which is prior to the rights of stockholders is inadmissible
So long as they receive full compensatory treatment and so long as each group shares in the securities of the whole enterprise on an equitable basis, the requirements of 'fair and equitable' are satisfied
reorganization plan
the phrase 'fair and equitable' had become a term of art, that Congress used it in the sense in which it had been used by the courts in reorganization cases, and that whether a plan met the test of fairness and equity long established by judicial decision was not a question to be answered by the creditors and stockholders but by the court as a matter of law
reorganization
- 1965·379 U.S. 594 - Securities & Exchange Commission v. American Trailer Rentals Co.[p29]· cited 280×
The words 'fair and equitable' are 'words of art' which mean that senior interests are entitled to full priority over junior ones and, in particular, 'that in any plan of corporate reorganization unsecured creditors are entitled to priority over stockholders to the full extent of their debts and that any scaling down of the claims of creditors without some fair compensating advantage to them which is prior to the rights of stockholders is inadmissible.
the words 'fair and equitable' in Chapter X are terms of art, and no plan can be 'fair and equitable' which compromises the rights of senior creditors in order to protect junior creditors