The Memphis appeal. [volume] (Memphis, Tenn.) 1886-1890, 1888-08-08
RELIEF In A RECEIVER.
THE PROSPECT PARK AND BELT
DUMMY LINE IN CHANCERY.
Mr.. William Katzenberger Placed in
Charge. of the Road to Continue It's
Operation Against Menacing Indebt-
edness-Why Its Condition is Such.

Application to the courts for relief was
a voluntary proceeding on the part of
stockholders, and was done to protect all
creditors alike in anticipation of suits for
unsettled indebtedness and to keep tie
road in operation by using its earnings to
pay running expenses.
The petition for relief, filed in the
chanccry court under the caption ''The
Chickasaw Sand company-T. j. Latham,
Andrew J. Harris, II. J. Person, l.. +.
Adams, David Holt, d. NJ. Scales and A.
NJ. Hill, and the Manhattan Bank, Of
Memphis, VS.. the Prospect Park & Belt
Railway company, il lan important
one. 1t recites that compliments
with the exception OF the Manhattan
bank (Which is acting as trustee) own the
major part OF the stock OF defendant COM
pany. The purposes OF the organization Of
the Prospect Park x Belt Railway COM
pany are set forth at length to he the i'm.
provement OF the suburbs, and the history
Of the enterprise from the time it was first
conceived as the Memphis, Prospect Park
& Greenwood company, which sold out to
defendant company last December for
Sl5, 900 OF defendant companys mortgage
bonds, is given.
Compliments state that on the day of
the purchase the defendant company exc
cuted TO the Manhattan bank its mortgage,
covering all OF its property and privileges,
10 secure bonds aggrcgating $3.50, 900, pay
able in 1908 and bearing interest at the
rate OF O per cent. OF these bonds $3.50, 900
was used in paying for the property of the
Nj. q. Il 7. r. X. r. company, and the bal
ance held rs treasury fund. Compliments
are bona tide holders Of over two-thrds Of
the Sl50,OO0 Of bonds, and some OF COM
plainants are liable rs indosers or security
on debts Of defendant company, for which
all OF the 100000, except $4,000. arc
pledged as collateral. Defendant company
is in possession OF the road and privileges
and has expended large sums of money in
developing the property. Defendants also
own $50 acres OF valuable land reached by
its railway, besides nine and a quarter
miles OF track locomotives, cars, etc. Not
outstanding this, defendant company Is
embarrassed financially, and in an exhibit
II is shown that the running expenses ex-
coed the earnings by S5, 4l7.S5, but for re-
the expenditures. Defendant owes $40, 900
floating debt, and its credit is exhausted,
its employees are Disconnected and appre-
hensive. The July interest ON the mort
gage bonds was advanced by some OF COM
plainants. Tse defendant company's sys-
tenn OF works is incomplete and Il is threat
ened with multiplicity Of suits and tho
suspension OF operation.
COmplainants further show that tho
Chickasaw Land company Is the largest
holder OF stocks and bonds. having ST.
900 Of the bonds and 500 in stock. The
company also owns about 5000 acres Of
land on the lines OF the road. The value
OF this land depends largely upon the
operation OF the lines OF defendants com
pany.
In addition 10 the Chickasaw Land COM
pany, Of the compliments, Latham owns
81, 900 OF stocks and $1,000 OF bonds:
Person, $500 Of stocks and g. 500 OF
bonds; Adams, 81, 900 OF stock and 81 900
OF bonds; Scales. 81 900 Of stock and 600
OF bonds; Lamb. $1,000 OF stock and
$1,000 OF bonds; Harris. 81 900 OF stock;
Hill, $1,000 Of stock and g, 900 OF bonds.
Premises considered, compliments ask
for receiver, that the lines Of defendants
company may continue 10 be operated and
claims paid of and the bondholdcrs pro-
tccted.
Alter considering the premises as prayed.
Chancellor Estes appointed Mr.. William
kalzenbcrger receiver, under bond OF
sJ1,OOO, which was promptly furnished.
IL will be remembered that the road was
opened for patronage late in the year 1887,
alter the summer with It's advantages had
passed. The purpose for which II WIS
oil ole Il 4 Al.
burbs along its line. could not hope 10 bo
accomplished In winter. In consequence
that period Of several months brought ouly
heavy losses. When spring returned, aud
other conditions seemed favorable. tho
roadbed had partially given way.
there was no ballas,ing, aud several
bad accidents occurred, causing serious
damage 10 rolling stock. The company,
With commendable enterprise. contracted
Tor, and In due time, received costly addi.
ions To its stock, including both cars and
motors. Added 10 these, and the facts
enumerated In the petition, Il appears
there was an unfortunate hitch in the
placing OF the bonds. This prevented the.
arranging Of the indebtedness In fixed
shape, made floating, and thereby ron.
dcrcd u absolutely necessary 10 le con.
aantly providing for ~ demanded liauldn.
ton. Had II been fixed by the successful
placing OF securities, the difficulty into
which II Is prccipiiaicd would have been
averied. As the petition states, the earn.
ings have exceeded expenses during tho
last several months. indicating that tho
projectors were not mistaken in regard TO
The ultimate high value of the property.
Unless other complications arise the line
VIII continue 10 be operated ut usual, aud
carry It's train loads Of swelicring humanity
10 delightful suburbs, particularly ON sun.
days Everyone IN Memphis sincerely
hopes this may bc done. ~ the road ia,
contributed incidentally 10 tho upbuIld.
ing Of the southern suburbs by people who
pinned their faith 20 the enterprise. The
latter consideration j. believed 10 have hal
great weight with Chancellor Estcs In