BANKRUPTCY-JURISDICTION OF BANKRUPTCY COURT TO DETERMINE ATTORNEYS\u27 FEES FOR SERVICES RENDERED IN CHAPTER X REORGANIZATION PROCEEDINGS

A committee for preferred stockholders entered into an agreement with petitioners, wherein it was provided that certain shares of stock of the debtor corporation, placed in escrow with the committee by four preferred shareholders, would be delivered to petitioners as added compensation for their services in the reorganization proceeding. Pursuant to this agreement petitioners performed valuable services connected with the reorganization. The bankruptcy court allowed petitioners $37,500 from the debtor\u27s estate, but held it had no jurisdiction to pass on the amount of the allowance which should be paid under the escrow agreement. Petitioners then sued in a state court for specific performance of the escrow agreement. On certiorari to the Supreme Court of the United States from a holding that the state court was without jurisdiction over the subject matter, held, affirmed (three justices dissenting). The bankruptcy court had exclusive jurisdiction over petitioners\u27 claim by virtue of section 221(4), chapter X of the Bankruptcy Act. Leiman v. Guttman, (U.S. 1949) 69 S.Ct. 371