Supreme Court of the United States
Reading Co. v. Brown
June 3, 1968391 U.S. 471
Summary
The Court held that damages resulting from the negligence of a receiver acting within the scope of his authority constitute “actual and necessary” costs of a Chapter XI arrangement and therefore qualify as first‑priority administrative expenses under § 64a(1). The judgment of the Third Circuit was reversed and the case remanded for further proceedings consistent with that holding.
Holding
- Whether negligence of a receiver administering a Chapter XI arrangement gives rise to an “actual and necessary” cost of operating the debtor’s business under § 64a(1).. Damages resulting from the negligence of a receiver acting within the scope of his authority are “actual and necessary costs” of a Chapter XI arrangement and therefore qualify as first‑priority administrative expenses under § 64a(1).
Docket 127