Swan-Finch Oil Corporation is a New York corporation with approximately 6,000 stockholders. It is largely a holding company. For a considerable time prior to September 1957 the affairs of Swan-Finch were controlled by one Lowell M. Birrell. About September 1957 Birrell fled the country and is currently resisting extradition from Brazil. On January 2, 1958 Swan-Finch filed a petition in the Southern District of New York seeking reorganization pursuant to Chapter X of the Bankruptcy Act, Section 101 et seq., 11 U.S.C.A. § 501 et seq. The petition was approved, and two trustees were appointed.

Due to Birrell's manipulations the affairs of Swan-Finch were in great confusion. One of the assets claimed by the Swan-Finch trustees was the entire issued and outstanding stock of Keta Gas and Oil Company, a Pennsylvania corporation. This stock had been acquired by Swan-Finch on September 27, 1955. On December 31, 1956, the Keta stock was purportedly transferred to Doeskin Products, Inc., a corporation at that time also controlled by Birrell. The subsequent controversy between Swan-Finch and Doeskin over the control of Keta was eventually resolved by the Second Circuit in favor of Swan-Finch in an opinion filed August 24, 1959, Pettit v. Doeskin Products, Inc., 2 Cir., 1959, 270 F.2d 95, certiorari denied, 362 U.S. 910, 80 S. Ct. 660, 4 L. Ed. 2d 618. However, prior to this decision, on July 16, 1958, while Keta was still under the control of Doeskin, Keta filed, in the Western District of Pennsylvania, a petition for an arrangement under Chapter XI of the Bankruptcy Act, Section 301 et seq., 11 U.S.C. A. § 701 et seq. That petition was approved, Keta was continued in possession, and on March 3, 1959 appellant was appointed Keta's receiver.

On November 6, 1959 the two trustees of Swan-Finch, the adjudicated owner of all the corporate stock of Keta, filed a petition on Keta's behalf in the Southern District of New York seeking Chapter X reorganization. On November 9 Judge Ryan provisionally approved the petition, and, as Keta is a subsidiary of Swan-Finch, hearings on this petition were consolidated with the Swan-Finch proceeding. On November 13 Judge Ryan denied appellant receiver's motion to dismiss Keta's Chapter X petition. On January 26, 1960 Judge Palmieri designated the two Swan-Finch trustees to be also trustees of Keta, and appointed a third trustee to serve as a trustee of both Swan-Finch and Keta, this new trustee being specifically charged with the duty to safeguard Keta's position in the consolidated Chapter X proceeding. On March 9, 1960 Judge Palmieri filed an opinion and order constituting final approval of Keta's Chapter X petition (Section 144 of the Act, 11 U.S.C.A. § 544).

Appellant first contends that because a Chapter XI proceeding was pending in the Western District of Pennsylvania the court below should have dismissed Keta's Chapter X petition without considering its merits. Appellant's argument relates to venue. He maintains that Keta's petition in the Southern District of New York does not satisfy the venue requirements of Chapter X unless it qualifies as "an original petition" under Section 129, 11 U.S.C. § 529. He then argues that Section 129 must be read in conjunction with Section 128 which also only applies to "an original petition,"1 that the term "an original petition" has the same meaning in both sections, and that in Section 128 the term is defined as a petition filed at a time when "no bankruptcy proceeding is pending." Then, as the final step in this argument, appellant takes the position that the term "bankruptcy proceeding" in Section 128 refers to any proceeding initiated under any provision of the Bankruptcy Act, Title 11 of the U. S.C.A.

In support of this argument appellant relies heavily upon the Seventh Circuit's holding in Matter of National Aircraft Corporation (Duggan v. Sansberry), 7 Cir., 1945, 149 F.2d 548. The facts there, though similar, are not identical with the facts in the present case. On December 27, 1943 Christopher Engineering Company filed a petition for Chapter X reorganization in the Eastern District of Missouri. On January 21, 1944 creditors of National Aircraft Corporation filed in the Southern District of Indiana an involuntary petition in ordinary bankruptcy against that corporate debtor. On April 6, 1944 the referee in the Indiana proceeding ordered certain of National's properties sold on April 20. On April 19, upon allegations that National was a wholly-owned subsidiary of Christopher, a petition was filed on National's behalf in the Eastern District of Missouri seeking a Chapter X reorganization. Thereupon, on that same day, the Missouri court issued an injunction enjoining the sale that had been ordered in the Indiana proceeding and that was to occur on the following day. The injunction order of the court in Missouri was ignored, the sale occurred as scheduled, and it was approved by the referee in the Indiana proceedings. This approval was affirmed by the district court in Indiana and then by the Court of Appeals for the Seventh Circuit. One of the grounds for the Seventh Circuit's decision was that a subsidiary which had been adjudicated a bankrupt in one district may not thereafter file a Chapter X petition in another district even though a Chapter X reorganization of its parent is pending in the latter district. The Seventh Circuit's reasoning in support of this ground is found at pages 551-552 of its opinion, supra, and is identical with appellant's argument as set forth in the preceding paragraph of this opinion.

The decision of the Seventh Circuit in Duggan v. Sansberry was reversed by the Supreme Court, 1946, 327 U.S. 499, 66 S. Ct. 657, 90 L. Ed. 809. However, as we read the Supreme Court's opinion, the reversal was on other grounds than the ground just mentioned. The Supreme Court held, we believe, that an injunction issued by the reorganization court pursuant to Section 113 of the Bankruptcy Act, 11 U.S.C.A. § 513, may not be collaterally attacked, and that the existence of facts necessary to sustain the jurisdiction of the reorganization court is an issue to be litigated only in that court pursuant to the provisions of Sections 137 and 144 of the Act, 11 U.S.C.A. §§ 537, 544. The language in the Supreme Court's opinion upon which we principally rely for this interpretation is set out in the footnote.2 Our interpretation coincides with that of Collier (6 Collier, Bankruptcy (14th Ed.), § 3.12), and that of the Eighth Circuit, Magidson v. Duggan, 8 Cir., 1954, 212 F.2d 748, 757. Therefore we conclude that the question now before us was not considered by the Supreme Court in its decision reversing the Seventh Circuit in Duggan v. Sansberry.

We agree with the Seventh Circuit's analysis of Section 129 in all particulars — save one. That single point of disagreement, however, is vital to the outcome of the present case. We agree that Section 129 applies only to an "original petition." We agree that the term "original petition" is defined by Section 128 to mean a petition filed on behalf of a corporation at that time not the subject of a pending "bankruptcy proceeding." We disagree, however, with the Seventh Circuit's apparent conclusion — a conclusion that is clear dictum in view of the fact that the prior proceeding there involved was a proceeding in ordinary bankruptcy — that the term "bankruptcy proceeding" in Section 128 includes all Bankruptcy Act proceedings rather than merely proceedings in ordinary bankruptcy.

Sections 126-133 of the Bankruptcy Act, 11 U.S.C.A. §§ 526-533, are a unit constituting Sub-Chapter IV of Chapter X. Accordingly, as the Seventh Circuit recognized, these sections must be construed together. Section 127 provides:

"A petition may be filed in a pending bankruptcy proceeding either before or after the adjudication of a corporation."

The use in this Section of the word "adjudication" (see Section 1(2), 11 U.S.C. A. § 1(2)) requires the conclusion that in Section 127, and hence in Sections 128 and 129 as well, the term "bankruptcy proceeding" refers only to a proceeding in ordinary bankruptcy, i. e., a proceeding under Chapters I-VII of the Act.3 This careful use of the term "bankruptcy proceeding" occurs not only in Sub-Chapter IV of Chapter X but throughout Chapter X (see, e. g., Sections 112, 114, 121; respectively 11 U.S.C.A. §§ 512, 514, 521) and throughout Chapters XI, XII and XIII (see, e. g., Sections 312, 412, 612, 316, 416, 616; respectively 11 U.S.C.A. §§ 712, 812, 1012, 716, 816, 1016.4 As Collier states, 6 Collier, Bankruptcy (14th Ed.), § 1.10 at p. 245 (footnotes omitted):

"As we have seen before, a Chapter X proceeding is a bankruptcy proceeding in the broad sense. But the Act itself, as a matter of technical terminology, does not use the words `bankruptcy proceedings' or `proceedings in bankruptcy' in that sense, but uses them rather to distinguish the ordinary bankruptcy proceeding under Chapters I-VII from the debtor relief proceedings under other chapters of the Act."

And see also 8 Collier, Bankruptcy (14th Ed.), § 4.03 at pages 279-81.

Therefore, a Chapter XI arrangement is not a "bankruptcy proceeding" contemplated by Section 128; and so it follows that under Section 129 no objection may be raised on grounds of venue to Keta's petition in the Southern District of New York despite the existence of a prior Chapter XI proceeding in the Western District of Pennsylvania.

Appellant's second contention is that the court below erred in holding that Keta's Chapter X petition was filed in good faith.5 Under Section 141, 11 U.S.C.A. § 541, this finding is essential to approval of a Chapter X petition, and the term "good faith" is itself defined (at least partially) in Section 146, 11 U.S.C. A. § 546. At the outset two general principles seem clearly established. First, the burden is upon the petitioner to demonstrate that the petition has been filed in good faith. Marine Harbor Properties, Inc. v. Manufacturer's Trust Co., 1942, 317 U.S. 78, 84-85, 63 S. Ct. 93, 87 L. Ed. 64, rehearing denied, 317 U.S. 710, 63 S. Ct. 254, 87 L. Ed. 566. And, second, the district court's decision as to whether a given petition has been filed in good faith is a finding that will not be set aside unless clearly erroneous. Matter of Riddlesburg Mining Co., 3 Cir., 1955, 224 F.2d 834; Matter of Mt. Forest Fur Farms of America, Inc., 6 Cir., 1939, 103 F.2d 69, certiorari denied, Merritt v. Mt. Forest Fur Farms of America, 308 U.S. 583, 60 S. Ct. 105, 84 L. Ed. 488.

Appellant first argues that there has been no showing that adequate relief is unobtainable under Chapter XI. (Sections 130(7) and 146(2), 11 U.S.C. A. §§ 530(7), 546(2).) Appellant, relying upon SEC v. U. S. Realty & Improvement Co., 1940, 310 U.S. 434, 60 S. Ct. 1044, 84 L. Ed. 1293, maintains that Chapter X was designed to grant relief only for widely held corporations or corporations with complicated structures of secured debt. We disagree with appellant's interpretation of that case. Any doubts on this point have been dispelled by General Stores Corp. v. Shlensky, 1956, 350 U.S. 462, 465-468, 76 S. Ct. 516, 100 L. Ed. 550. There the Supreme Court held that it is not the size or capital structure of the debtor that determines whether Chapter XI relief is adequate, but rather this question is to be determined by the problems likely to be faced in the attempt to restore the debtor to health.

We hold that when the parent corporation is in manifest need of Chapter X relief that fact alone is sufficient to establish in most cases the inadequacy of Chapter XI proceedings for its whollyowned subsidiary. Intervention by the Securities and Exchange Commission on behalf of the parent's security-holders (an intervention not available under Chapter XI) will be less effective if the advice of the Commission as to the disposition of the parent's assets, e. g., its wholly-owned subsidiaries, cannot also be obtained. Again, the superior protection afforded the parent's creditors in a Chapter X proceeding will be partially dissipated if the management of the subsidiary is not subject to the same control. In addition, it is obvious that the consolidated proceedings will result in an expedient and economical administration.6 See, generally, Duggan v. Sansberry, 1946, 327 U.S. 499, 510-511, 66 S. Ct. 657, 90 L. Ed. 809; SEC v. U.S. Realty & Improvement Co., 1940, 310 U.S. 434, 448-454, 60 S. Ct. 1044, 84 L. Ed. 1293; Capitol Motor Courts v. LeBlanc Corp., 2 Cir., 1953, 201 F.2d 356, 358; certiorari denied, 345 U.S. 957, 73 S. Ct. 940, 97 L. Ed. 1378. Cf. Matter of Pittsburgh Rys. Co., 3 Cir., 1946, 155 F.2d 477, certiorari denied, Philadelphia Co. v. Guggenheim, 329 U.S. 731, 67 S. Ct. 89, 91 L. Ed. 632; Matter of Schafer's Bakeries, D.C.E.D.Mich.1955, 129 F. Supp. 82.

Second, appellant argues that there has been no showing below that it is reasonable to expect that a plan of reorganization can be effected. Section 146 (3), 11 U.S.C.A. § 546(3). It is well settled that the petition need not contain a specific plan of reorganization. The petitioner need only demonstrate that there exists a reasonable possibility of successful reorganization. Matter of Castle Beach Apartments, Inc., 2 Cir., 1940, 113 F.2d 762; Matter of Julius Roehrs Co., 3 Cir., 1940, 115 F.2d 723; 6 Collier, Bankruptcy (14th Ed.), § 6.09, pp. 1779-1780. The finding of the court below that this possibility exists is not clearly erroneous.

Third, relying upon the fact that, as a consequence of Birrell's manipulations, Swan-Finch and Keta assert antagonistic claims to certain properties and also dispute an alleged loan from Keta to Swan-Finch, appellant argues that Keta's creditors will be adversely affected by the termination of Keta's Chapter XI proceeding in favor of a consolidated proceeding with the same persons serving as trustees of both Swan-Finch and Keta. Section 146(4), 11 U. S.C.A. § 546(4). We are of the opinion that Keta's creditors have been adequately protected by the appointment of a trustee charged with the specific responsibility of protecting Keta's interests. In support of this conclusion we note that no Keta creditor has joined in this appeal. In fact, the creditor alleging the largest claim against Keta has expressed approval of the three-trustee administration. Furthermore, the three creditors alleged to have the next three largest claims have offered no objection to the Chapter X petition. The facts do not support appellant's belief that Keta's creditors will be adversely affected. Cf. Matter of Diversey Hotel Corp., 7 Cir., 1948, 165 F.2d 655, 658; Matter of Loeb Apartments, 7 Cir., 1937, 89 F.2d 461, 463.

Appellant's other contentions are without merit.

Affirmed. Costs to be paid by appellant.