Page:United States Statutes at Large Volume 52.djvu/968

 927 52 STAT.] 75TH CONG. , 3D SESS.-CH. 575-JUNE 22, 1938 "ARTICLE XII-PRIOR PROCEEDINGS "SEC. 506. A petition may be filed under this chapter notwith- standing the pendency of a prior mortgage foreclosure, equity, or other proceeding in a court of the United States or of any State in which a receiver or trustee of all or any part of the property of a debtor has been appointed or for whose appointment an application has been made. "SEC. 507. Such prior proceeding shall be stayed by the filing of a petition under this chapter. The trustee appointed under this chap- ter, upon his qualification, or, if a debtor is continued in possession, the debtor, shall become vested with the rights, if any, of such prior receiver or trustee in such property and with the right to the imme- diate possession thereof. The trustee or debtor in possession shall also have the right to immediate possession of all real property and chattels real of the debtor in the possession of a trustee under a trust deed or a mortgagee under a mortgage. "SEC. 508. The judge shall make such provision as may be equitable for the protection of the obligations incurred by a receiver or trustee in such prior proceeding and for the payment of the reasonable compensation for services rendered and of the proper costs and expenses incurred therein as may be allowed by the judge. "SEC. 509. Upon a dismissal of a proceeding under this chapter, such prior proceeding shall become reinstated and the judge shall allow the reasonable costs and expenses under this chapter, including the allowances provided for in article XI of this chapter, and shall make appropriate provision for the retransfer of such property to the person or persons entitled thereto upon such terms as may be equitable for the protection of the obligations incurred in the pro- ceedings under this chapter by the trustee or debtor in possession, and for the payment of the costs and expenses of the proceedings. "ARTICLE XIII-ARRANGEMENTS, WHEN SET ASIDE OR MODIFIED "SEC. 511. If, upon the application of parties in interest filed at any time within six months after an arrangement has been confirmed, it shall be made to appear that fraud was practiced in the procuring of such arrangement and that knowledge of such fraud has come to the petitioners since the confirmation of such arrangement: "(1) if the debtor has been guilty of or has participated in the fraud or has had knowledge thereof before the confirmation and has failed to inform the court of the fraud, the court may set aside the confirmation and thereupon (a) where the petition was filed under section 421 of this Act, reinstate the pending bankruptcy proceeding, adjudge the debtor a bankrupt and direct that the bankruptcy pro- ceeding be proceeded with; or (b) where the petition was filed under section 422 of this Act, reinstate the proceeding, adjudge the debtor a bankrupt, and direct that bankruptcy be proceeded with pursuant to the provisions of this Act; or "(2) the court may set aside the confirmation, reinstate the pro- ceeding under the petition filed under this chapter, and hear and determine applications for leave to propose, within such time as the court may fix, alterations or modifications of the arrangement for the purpose of correcting the fraud; or "(3) the court may reinstate the proceeding under the petition filed under this chapter and modify or alter the arrangement for the purpose of correcting the fraud, but may not materially modify or alter the arrangement adversely to the interests of any party who did not participate in the fraud and who does not consent to such Prior proceedings. Filing of petition. Stay. Protection of in- curred obligations. Reinstatement. Arrangements, when set aside or modified. Fraud; application by parties in interest. Powers of court. Ani, p. 918.

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