also possible that as to one or more of such claims the trustee might desire to assert a set-off or counterclaim. Under these circumstances, we believe that the conditions of our order to be entered herein should permit of some differences in the form of the literature inviting tenders and in the form of any escrow arrangements. Otherwise literature sent to debenture holders or a particular claimant may be unduly encumbered, or, a situation may arise in which a previously designed or stereotyped escrow arrangement might be inadequate.

By using $3,000,000 to purchase debentures and claims, with interest, at 70 percent of their principal amount, the applicant will be able to acquire approximately $4,785,000 of the debtor's indebted

We are advised that Atlas Corporation, whose tender is not to be accepted until all other tenders of claims and debentures made within the period during which tenders may be made shall have been accepted, voluntarily has agreed" with the applicant and the trustee for the estate of the debtor that Atlas Corporation will tender such amount of the debentures which it holds, directly or indirectly, as may be necessary to exhaust the $3,000,000 available for this purpose. Debenture holders and claimants should realize, however, that Atlas Corporation may have reasons for making this agreement or for tendering which may not be applicable to other debenture holders or claimants. Atlas Corporation is represented on the debtor's board of directors, and has participated extensively in the reorganization proceedings.

Except as has been indicated, the facts as outlined in our first findings and opinion (see In the matter of Utilities Power & Light Corporation, Limited, et al., 4 S. E. C. 131 (1938)), remain unchanged in all essential respects. Accordingly, and because of the terms and conditions which we will attach to our order, we make no adverse findings with respect to any of the matters specified in Section 10 (b) and find that the requirements of Section 10 (c) and Section 10 (f) are satisfied.

SCOPE OF THE SUPPLEMENTARY FINDINGS AND OPINION AND ORDER

Like our initial order in this case our supplementary order approving the utilization of an additional sum not in excess of $3,000,000, must necessarily be preliminary in character, for none of the transactions proposed by the amendment may be consummated without the prior authorization of the court having jurisdiction over the 77B proceedings.

"Subject to certain conditions as to the time within which tenders must be invited and accepted.

Our supplementary order will be subject to the following conditions:

(a) That the approval herein granted shall not become final until the court having jurisdiction over the 77B proceedings shall have approved the transactions;

(b) That the maximum additional amount to be used for the purposes of this application shall be $3,000,000, and that the privilege of tendering, within the limit of such amount, shall be extended to all holders of claims asserted against the estate of the debtor and of the same rank as the debentures: Provided, however, That the privilege of tendering given by this condition shall not be available to holders of 6% first mortgage gold bonds of Utilities Elkhorn Coal Company, dated July 1, 1928, due July 1, 1948, on claims which are alleged to arise against Utilities Power & Light Corporation directly or through Continental National Bank and Trust Company of Chicago, as trustee of said Elkhorn bond issue, by virtue of any agreements executed by Utilities Power & Light Corporation in connection with or in relation to such Utilities Elkhorn Coal Company bonds;

(c) That after the 77B court authorizes the solicitation and acceptance of tenders, the applicant and the trustee shall mail to every known holder of debentures and then asserted claims (other than any arising by virtue of any agreements in connection with or in relation to such Utilities Elkhorn Coal Company bonds) literature advising him of the privilege of tendering, and shall make or cause to be made to such debenture holders and claimants prior to or simultaneously with the sending of such literature, such disclosures as may be necessary or desirable for the purpose of enabling the holders of debentures and claims to determine whether or not to tender, including data designed to show the effect of the contemplated acquisitions upon the creditors who do not tender and upon stockholders of the debtor: Provided, however, That the literature sent to any claimant need not be the same as that which is sent to any other claimant or to debenture holders: Provided, further, That the trustee and the applicant shall submit to the Commission at least 3 days prior to the mailing thereof true copies of such literature, and within said period the Commission reserves the right to order the trustee to make such changes as it considers necessary in the public interest and the interest of investors and consumers;

(d) That no tenders shall be received after 15 days from the date of the mailing of the literature inviting tenders and such literature shall so provide;

(e) That the price at which debentures, with accrued interest thereon, and claims, with interest thereon, shall be tendered and purchased shall be 70 percent of the principal amount;

(f) That if the price of 70 is not paid on any debenture or claim, the tender of which has been accepted, within 30 days after the closing date for tenders, the amount payable therefor in accordance with the terms of the call for tender, shall bear interest from such closing date at 3%;

(g) That in the event more debentures and claims shall be tendered than the amount available for that purpose (in accordance with (b) above) will suffice to purchase, each lot tendered shall first be purchased up to $5,000 principal amount of the debentures and/or claims tendered, and purchases of any remaining amounts shall, to the extent practicable, be made pro rata: Provided, however, That no tender of debentures by Atlas Corporation or any subsidiary thereof shall be accepted until all other tenders of claims and debentures made within the 15-day period within which tenders may be made have been accepted;

(h) That a copy of the agreement between the applicant, intervening applicant and Atlas Corporation, in which Atlas Corporation agrees that it will tender such amount of debentures which it holds, directly or indirectly, as may be necessary to exhaust the $3,000,000 available for this purpose, shall be filed with the Commission, and shall be made part of the record in this proceeding;

(i) That any debenture holder may tender all or any part of the debentures held by him, but tenders in more than one lot of debentures having the same beneficial owner shall not be permitted;

(j) That if tenders are received from holders of debentures or claims asserted, to which any complete or partial defense, including any set-off or counterclaim, is asserted or has been established or is pending undetermined in legal proceedings, then in the case of each such debenture holder or claimant a sum equal to 70 percent of the principal amount of the debenture or debentures, claim or claims so tendered by him and disputed as aforesaid shall be placed in escrow pursuant to an appropriate agreement or agreements satisfactory to the Commission and which shall provide for payment to such debenture holder or claimant only when (1) such proceeding questioning his rights shall have been decided by the proper court (including decision of any such set-off or counterclaims) and all rights of review shall have been waived or terminated, or (2) the dispute settled by a compromise entered into by the debenture holder or claimant and the trustee for the estate of the debtor, and satisfactory to the 77B court. If the proceeding or dispute questioning the rights of the debenture

holder or claimant shall be successful, and after deduction of any adjudged or agreed set-off or counterclaim his claim shall ultimately be allowed by the court in a sum less than the amount of the principal and interest if any of the claim as originally asserted, the sum payable to such debenture holder or claimant shall be reduced proportionately and the balance of the sum deposited in escrow shall be released from escrow. Any debenture or claim placed in escrow shall not draw interest during the escrow period except as follows:

(1) If it is ultimately determined that the debenture or claim is entitled to share on the same basis with other debentures or claims tendered, the amount due (after deduction of any adjudged or agreed set-off or counterclaim) on such debenture or claim at the tender price shall bear interest in accordance with the provisions of paragraph (ƒ) above;

(2) If it is ultimately determined that the debenture or claim is not entitled to share on the same basis with other debentures or claims tendered, the right of such debenture or claim to interest shall be determined in accordance with law as if it had not been placed in escrow ;

(k) That the trustee shall submit to the Commission the name or names of the proposed depositary or depositaries with whom tenders shall be lodged, which shall be the depositary or depositaries for that purpose unless the Commission within 3 days after the receipt of this information informs the trustee that such depositary or depositaries is or are unacceptable;

(7) That the applicant and intervening applicant shall file a statement with the 77B court waiving all rights, if any, to vote, or cause to be voted the debentures or claims acquired in accordance with this order in respect to any plan of reorganization of the debtor.

(m) That the Commission reserve jurisdiction for the purpose of passing upon the matters by the foregoing conditions required to be passed upon, and for the purpose of passing upon any other questions subject to its jurisdiction that may arise in connection with the tenders or acquisitions pursuant thereto.

An appropriate order will issue.

By the Commission: Commissioner Henderson not participating.

5 S. E. C.

[No. 760]

IN THE MATTER OF

WEST TEXAS UTILITIES COMPANY

File No. 43-200. Promulgated June 5, 1939

ISSUE AND SALE OF SECURITIES OF REGISTERED HOLDING COMPANY OR SUBSIDIARY.

Refunding.

Declaration having been filed by a subsidiary of a registered holding company, pursuant to Section 7 of the Public Utility Holding Company Act of 1935, regarding the issue and sale by a declarant of $18,000,000 in principal amount of first mortgage bonds, series A, 34%, due May 1, 1969, and $4,000,000 in principal amount of 3% unsecured serial notes, the proceeds to be applied together with other funds, to the redemption, at 1021⁄2 and accrued interest, of $21,693,900 principal amount of declarant's outstanding first mortgage 5% gold bonds, series A, due October 1, 1957, the new bonds to be issued under an open-end indenture constituting a first lien upon substantially all physical property and franchises owned or hereafter acquired by declarant, ordered effective subject to certain conditions, the Commission finding that the issuances comply with Section 7 of the Act.

Provision for Depreciation and Maintenance.

Although declarant's combined annual provision for depreciation and expenditures for maintenance had exceeded 15 percent of gross operating revenues, the Commission, acting pursuant to the power vested in it by Sections 7 (d), 12 (c), and 20 (a) of the Act, attached a provision to its order declaring effective a declaration regarding the issue and sale of certain bonds and unsecured serial notes, that, except as the Commission may by order, from time to time, permit, so long as the presently proposed bonds are outstanding the company will not declare or pay any dividends or make any other distribution on or acquire any shares of its preferred and common stocks, unless the amounts expended for maintenance and repairs plus provisions for depreciation during the period from May 1, 1939, to the date of the proposed payment of such dividends or making of such distribution or acquisition, plus the earned surplus of the corporation accumulated since May 1, 1939, remaining after payment of such dividends or the making of such distribution or acquisition, shall equal not less than 15 percent of the gross operating revenue of the company during such period, after the deduction therefrom of an amount equal to the cost to declarant of electric energy or gas purchased and resold and rentals paid for electric or gas generat5 S. E. C.-35-1574