The morning news. [volume] (Savannah, Ga.) 1887-1900, 1893-01-24
THE CENTRAL TO BE SOLD
UNDER FORECLOSURE OF THE
TRIPARTITE BONDHOLDERs.

]
Taken Into Consideration by the
! Reorganization Committee aud Not
an Unfriendly Nove-Mr. Conner Ap-
pointed Receiver Under the Bill.
| The Georgia Company Mortgage
Without. Effect on the ReorRaniz1-
| ton Plan.
The Central railroad will be advertised
and sold by due process Of law. This is in
consequence of a suit filed in the United
States court here yesterday morning to
foreclose the mortgage representa- by the
! tripartite honda The suit was filed by Col.
George A. Mercer, representing the FARM
ers' Loan and Trust Company Of New York,
trustee for the mortgage.
1t was known to President Conner and the
reorganization committee of the Central
that the suit was in preparation and was
about to be filed
Though not acting in conjunction with
the reorganization committee, this action
by the Farmers Trust Company was taken
into account by the committee in arranging
Tor the future OF the road and the result
Will be the same as if the suit had been
brought at the instance OF the committee
So President Conner said yesterday, The
sale OF tbs road by order of the court is
necessary for the purpose OF carving out
the plan of reorganization Mr.. Conner
said that the committee will buy in the
road for the security holders, OF so many of
them as had deposited securities with the
committee.
THE TRIPARTITE BONDS,
The tripartite mortgage bonds were is
sued in 1872 In accordance with a special
act OF the legislature passed the same year,
empowering the Central railroad, the
Southwestern and the Macon and ~ estern
railroad to issue "a. 999. 900 Of bonds in the
| denomination OF 81 600 each. to be used for
the purposes specified in the bill. The
three roads were severally and Jointly
liable for the amount of the bonds, the
Central railroad being the chief party to
the mortgage. The Macon and Western,
| from Macon to Atlanta, was consolidated
with the Central the same year, the South
western being already under lease to the
| Central
The bonds were to run twenty years, and
bore interest at the rate of per cent. per
annum. They have al v avs been considered
q gllt-edged investment, and are still quoted
| above par. notwithstanding the Centraps
dihculties and the two recent defaults upon
the interest
The bill of foreclosure was brought upon
the grounds of the default upon the interest
and the alleged insolvency of the Central
railroad.
The bill was ordered filed by Judge Speer
and the usual process issued in the case. L.
| requested the appointment of a receiver,
but made no mention Of any person as pre-
ferred, or said anything against the man
aRement of the present receiver.
MR.. Conner APPOINTED.
Col. Mercer said, after presenting the bill,
that the present receiver is satisfactory to
the parties bringing the bill, and that his
| appointment in behalf of the cUmplainants
was requested by the Mutual Life Insurance
Company and other large holders of the
| tripartite bonds.
In accordance with the prayer of the COM
plalnants Judge Speer issued the following
| formal order
In the fifth circuit court of the United States
| for the eastern division Of the Southern dis
trict of Georgia, The Farmers Loan and
| Trust Company, trustee, VS.. the Central
Railroad and Ranking Company of Georgia
| ct al.
| The bill in the above case having been fled
this Gay by order OF the court, upon motion of
| solicitors for complainant, it is considered and
ordered by the court that Hugh NJ Conner
Esq, the receiver of the court under the litiga-
ton now pending in said court, be and he is
| hereby appointed temporary receiver under
the above bill fled this day.
| This appointment is cumulative and supple
mentary TO the orders heretofore made, and
is not intended to vacete or affect any previous
1 order. EMORY PEER u s. 1udpe
In open court this Jan %. 1893
There had been some expectation before
the bill was filed THAI a co-recaiver might
be appointed, but the request for the APP
pointment of Mr.. Conner in behalf Of the
compliments disposed Of all approximations
of this character.
SIX MONTHS BEFORE THE SALE.
Mr. Conner, in speaking CT the matter
yesterday afternoon, said it will probably
| he months hafOra ba roIl
that the committee Of reorganization will
| have plenty Of time to make all its arrange
ments for buying in the road and organ
| lZlng the new company. In case there
should not be sufficient deposit of securi-
ties to make the reorganization possible.
Mr.. Conner said the road will be sold any
way and the stock and junior security hold
ers will 60 to the wall
| There will certainly be opposition bv
the Richmond Terminal to the sale of the
road and the carrying out of the plan of
reorganization" SAID Mr.. Conner. "Thev
will throw every obstacle possible in the
way
| Terminal people would seek an Injunction
| to prevent the sale Of the road. He replied
that they will without doubt come into the
courts in some shape. The opposition of
the Terminal will cause considera bic DELAY.
| he said.
| THE GEORGIA COMPANY MORTGAGE.
MIR. Conner was shown the following ex-
tract from the New York Sun Of Sunday
with regard to the status of the Georgia
| Company in the matter of the reorganiza>
ton:
| The proposed plan of reorganization of the
| Central Railroad aud Banking Company of
Georgia presents a striking instance of the care
| less way in which the mortgages given by cor
| porations to secure bond issues are often read
BY a mortgage Gated July !, 1897, the Georgia
| Company conveyed TO the Central Trust Com
| pany, as trustee, 10000 shares of Georgia
Central stock owned by it as security for 81 co.,
100 or per cent. bonds. The fourth clause of
| the mortgage declares that in the event of a re-
| organization of the Georgia Central Railroad
| Company the trustee may, and upon the re
quest of a majority Of the bonds must, become
party TO such reorganization. and any stocks
| or ponds that may accrue in place of the Geor-
gla Central railroad stock are subject to the
terms of the trust as if they had been originally
| pledged. The concluding part of the clause is
| especially pertinent to the present situation
| and is as follows: provided, however that the
said trustee shall not consent TO any plan of re
| Organization by which the said trustee shall not
| retain the majority Of the capital stock of the
! said reorganized company, in the proportion OF
| 40 to %, for the benefit Of the bonds secured
| hereby"
| This mortgage is signed by H. B. Holns, then
president OF the Georgia Com pahy. now chair
| man OF the Georgia Central reorganization com
| mittee, and attested by L, h. Douniston secre-
| tary OK the Georgia Company, who IS a mem
| Der OF the committee. Under the plan recon-.