The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1886-07-02
RECEIVER FOR THE l., B. & W.
The Formal Proceedings by a Creditor
Are Not Opposed by the Company.
Manager G. e. Henderson Appointed-The
Company Could Not Pay Claim Of
$4,000 Per Year Extra Rental.

The Indiana Bloomington 81 Western railroad
went into the hands of receiver yesterday, by
order of Judge Gresham of the federal court
There was no opposition to the proceedings for
the receivership. and the court at once appoint
ed as receiver Mr. G. E. Henderson, manager of
the company. He will file his bond at once, and
will then take formal possession. The proceed
ings were somewhat peculiar In that they were
instigated in part by the company itself, which
had concluded that it would be best to take this
action, and not by the demands Of creditors
The visit of James Hurd, of New York, who is
a Judgment creditor for $40, 900, and his applica
ton for receiver were the basis Of the action of
the court This suit, however, could readily
have been settled by compromise. The real
trouble which led to the desire of the company
for receiver was claim for increased rental
of the Cincinnati, Sandusky e. Cleveland
railroad, which the l., B. 81 W. had leased
and the probability that the claim could be en-
forced by law. The l.. B. & w. leased the O.,
S. & G. in 1881, and have paid for it in the way
of rental 1910, 900 annually. This was $685. 600
per year more than the road had previously been
rented for. Mr.. Fairbanks solicitor of the road,
said yesterday that while the owners OF the l.,
B. 6 w. were willing to furnish the needed
funds to maintain it and improve it, they were
unwilling to pay this additional rental and
decided so put the road in the
hands of receiver. To pay the
additional $40 900, the total earnings of all the
lines would have had to be increased $500, 900
year. The question to whether the extra
rental shall be paid will now be decided in the
courts. The condition of the road is good, and
its earnings for three years past have exceeded
its expenses and are increasing.
Another account of the difficulty with the c.,
S. & G. is that a part Of it WAS leased by the
Bee line, and that the l., B. & W., claiming to
have leased the entire line, deducted from the
annual rental of 1910 000 to be paid by them
c., S. q G. must look to the Beeline for that
sum. The c., S. & G. brought suit, and the l.,
B. q W. was successful. The case was carried
to the Ohio Supreme Court, however, which,
about ten days ago, decided against the l.. B. &
w. This led the l., B. & W. to decide upon the
receivership.
While this move on the part of the l., B. g.
w. people was quite surprise in home circles,
it was not surprise to those who are we'll in
formed regarding the finances of the company.
Before the payment Of their June interest ru-
NOR gained currency that it would net be met
and the property would pass into the hands of a
receiver, but the friends of the road. on the
handsome increase in earnings, took cour-
ing up whatever deficiency there was.
While the Peoria division has always been 3
good paying division, the fiddle division until
quite recently, has fallen far short of meeting
the expectations of the management in the vol
ume of business and the amount of earnings.
The Co. S. g. c. division has been, also. some
thing Of an elephant, and bids fair, under recent
decisions of the court; to be larger one The
lessons have, from the beginning, shown dispo
sition to crowd the l.. B. & W.. and this is simply
a natural result While the officials of the l.. B.
& w. are not disposed to make public their fut
ure intentions regarding leases, etc., those
we'll informed in such matters are of the opinion
that the c. S. & G. lease will be modified, and
that the bonds of the road will be scaled down.
While it is stated that the road, physically, is in
good condition, a large sum of money could be
expended on it to good advantage, more especial
y on the Sandusky division.
The l., B. & w. has of late years paid it's en-
ployes very promptly, and has now no floating
debt of any amount 1t has always been looked
upon as an Indianapolis road, and much interest
is taken in this unexpected movement.