Walter J. Hempy

56 Cal. 2d 214 (1961) 363 P.2d 476

The Court reversed that portion of a Commission order conditioning a transfer of operating rights on preferential payment to specified creditors of the transferring entity. The Court concluded that, pursuant to Section 851, the sole inquiry for the Commission should be with respect to the impact of the transfer on the public rather than on any particular creditor. (See also Stepak at footnote 53 infra regarding minority shareholders.) Notably, while the Legislature has amended Section 854 to enlarge the range of interests the Commission must consider in an application for a transfer of control, Section 851 (governing transfers of assets) remains in the code largely unchanged from its original text. (The Legislature has amended the statute to permit certain transactions to be approved by advice letter.)

Download PDF