UPSET PRICES IN CORPORATE REORGANIZATION 515 accepted by the majority creditors, in satisfaction of all rights. In short the vital and determining feature of a reorganization is the fixing of an upset price; definite provisions should be made for the surrender of that right where the plan is fair to all concerned. Such a provision is essential; the failure of deeds of trust to pro- vide for the relinquishment of this right to have an upset price fixed is indeed startling. This phase of corporation law, however, should not be left to the parties to agree upon and codify as part of their contract. Like other phases of corporation law, where certainty and defi- niteness of rights are vital, the subject is peculiarly one requiring codification by statute.^ A short section added to the corpo- ration laws of the various states, and especially to the Federal Judicial Code, would complete our statutory corporation law and do much to establish the value and safety of corporate securi- ties.®^ Possibly arguments for such an improvement in the law are visionary; yet the codification of other branches of corporation law, and the improvements by statute in England, afford groimd for hope. Samuel Spring. Boston, Mass. •* Kentucky has a statute in force enacted in 1896 which follows the English pro- cedure and requires the minority to assent without the intervention of a foreclosure. To avoid constitutional difficulties, the act provides that contract rights arising before the passage of the act are not to be afifected thereby. (Kentucky Statutes, Car- rol, 1915, § 771.) No other state, evidently, has passed such a statute. See, gen- erally, Short, Railway Bonds & Mortgages (1897), § 878, note i.
- In 1896, Mr. Moorfield Story, in his address as President of the American Bar
Association, discussed the Kentucky statute, supra, and suggested that other states adopt it. Mr. Story trenchantly pointed out the defects in our law governing reorgan- ization, describing the " existing practice, of which the country has had a bitter ex- perience within the last few years and of which the railroad cases furnish the most conspicuous examples." " Reorganization of Railway and Other Corporations," Re- port OF American Bar Association (1896), Vol. XIX, page 240. His comments are equally true to-day, twenty-two years later.
