The sun., 1889-11-28
PROBLEMS IN BANKRUPTCY.
CONFLICT OYER THE MISSOURI, KAN
SAS AND 7EIAS ROAD

| bdO AND IhAAb hOAD
Tho Compnny's Plan IL 20 Pay or It's PrIn.
cipni Creditors aud Retain Control OF It's
ProPerty-The BondhoIders Think They
Ought TO Run the RoRd-The Differences
between the Plans or Reorganization.
The representatives OF the various interests
in the Missouri Kansas and Texas Railway
Company have at last placed their several
propositions for the reorganization OF the
company before the public. The recent delay
In doing so has been due to efforts to harmon
izo the various interests 30 that single plan
OF reorganization might be presented to the
security holders. Those efforts have failed,
| and in consequence those who have as
sumed to represent the creditor interest only
have brought out plan OF their own. and tho
committee representing the company has with
drawn It's original plan and submitted moro
comprehensive one. The issue between the
owners Of the property that is, the stockhold-
ers. and the creditors. namely, the bond
holders. is now plainly presented.
The bondholders' plan upon which the
Adams committee representing tho general
and per cent bonds, and the King commit
tee, representing the7 per cent. first consol
bonds have united. provides for the funding
| OF present obligations into first mortgage OF
| $32.5OO.OOO, or $4,000 per mile, and an income
| mortgage for an equal amount Both are to
bear Ar per cent interest. but that upon the
incomes is non-cumulative The stock is to be
| assessed $40 per share and the funds thus
acquired used in part to pay the arrears
Of interest on the consol Is The
stockholders are to receive income bonds
at par for the amount Of the assessment paid.
The advocates OF this plan claim that the new
Az per cent. first mortgage bonds will be worth
30 and the Incomes 50 and the two classes are
80 apportioned upon the present securities that.
according to that valuation. the cash value Of
the new securities issued for the per cent
consois would be 99A. for the general Is S4A,
and for the general 5s TAX.
A distinctive feature Of this plan is that
the control OF the road shall be vested in the
ncome bonds until the company is able to earn
and does pay interest upon them. This feature
is not likely to appeal very strongly to the
stock, but as the plan is that OF the creditors
hardly to be expected. Tie absolute f2ed
charges cha under this plan would be s1.493755.
bonds-Sl. .4625O0 making total OF s2,956.255
per annum that must be paid before the stock
Improvement upon the Amsterdam plan that
Is before he he p1bs @ abroad and which places
the Union Trust Company. the trustee OF the
The new plan submitted By the railway COM
pany through committee OF which Presi-
e the Chairman, remedies rad ieal defect Of
the first plan Of that committee by proposing
trs to place singh, e, fret tP morEaSe upon the
for $40 100000 and the rate OF interest is per
cent That ey4 would va make the absolute fixed
Bonneville bridge bonds. and the sinking fund
Of that Issue, aggregatine s77,S2O. would have
This amount is a little larger than the similar
item in the first mentioned plan. but is well
exact difference between the TWO items Is is
The most important feature Of the new plan !
is that IL proposes to pay off the per cent.
bonds and All the small issues Of prior lien |
bonds, By doing so the company will rid itself !
that has SO So far assumed definite shape in the |
mater: Tho money to pay or the principal |
ing $4,000 900 OF the new first mortgage is to
the stockholders and to the general So and |
serbers are to be given small % bonas anG IN sae
ferred stock. This feature fs somewhat SINH
will be $2O000,000 OF second mortgage bonds.
II earned, but non cumulative. After Ave years
from the date OF the bond. the interest is to be-
eecount q this ISSUE will BE- ShS5Se a0d
upon s1sG009S0 300 6GG OF 4 per cent, preferred
Q66 more. than by the King Adams plan.
But there is this important difference between
control of the property to the owners namely.
the stockholdeTs; whereas the bondholders'
arrangement; as will be seen by refiecting
upon similar adjustment in AN individual
sba ton between sW debtor and creditor
share. apd like the fret leaves the amount I'M
CHANGED Assuming that the new per cent,
to the security hoiders nameIy So that hSefSs fSs
eecondso will command 90. and the preferred
the general mortgage Is would be- ' a6out Sgh 81. 81
ad % those to the vn9 general 6s about
sold to pay off the old rs. The terms upon
which which these subscriptions can be made, TO-
every security holder, are made public By the
ceommlStee In the ADVERTISING columns OF THE
equally mindful of the needs OF the security
The purpose Of this review is to make the
Which have % stT9pg h RaeEnG Their
holders. It seems quite clear that the prefer,
enee o., the stocEhoders viii be for the
M titled fSo na@e Ee ea' cosfS shSS q are their
bonds the company has divided the Ss creditor diHTi
Interests, since sh the real question with the
o 81 hS SGsS mSnsy Sns is TEs Sege nPs
,ertain TO do, as the Gompany's plan of reor-
VIII be underWrlttep by syndicate |
hat Will take whatever bonds the present |
security holders do not subscribe for.
II is possible that the Missouri Pacific inter-
sst that relinquished the Missouri, Kansas and
Texas road only afterit had drained It dry.
will eventually bring out plan OF reorRaniZa- !
ion. Mr.. Gould has been passing around the
iraft OF plan, concerning which it Is not
necessary to know more than that he wants to |
let earnings.
Objects to Paying State Taxes to the City.