Combine Camera Stores, Inc. v. Interphoto Corp.

Order, Supreme Court, New York County, entered June 28, 1978, dismissing the complaint on the ground of res judicata, is unanimously affirmed, with one bill of costs and disbursements to respondents. In addition to the reasons stated by Justice Hughes, we note that the alleged misconduct of defendants—whether it be labeled breach of contract, fraud, duress or oppression—related to whether or not defendant would agree to a plan of arrangement in the chapter 11 bankruptcy proceeding and thus should be deemed disposed of by the order approving the plan of arrangement. As stated in Miller v Meinhard-Commercial Corp. (462 F2d 358, 360) "The suit obviously turns upon what could *802or should have happened in the bankruptcy proceeding.” Further, plaintiff corporation as debtor in possession urged this claim in the bankruptcy court as a ground for damages and for disallowing defendant’s claim to vote on the plan of arrangement; plaintiff withdrew that claim in open court in connection with the submission of the amended plan of arrangement; and thereafter agreed on the amount of defendant’s claim to be allowed in the chapter 11 proceedings, and an order was entered allowing the claim. Concur—Fein, JJ., Sandler, Sullivan, Lane and Silverman, JJ.