The morning news., 1893-06-27
THE HOLLINS PLAN FAILS.
The Reorganization Committee Said
TO Have Gone to Pieces.

neys yesterday Causes Little Sur
prise to Those Posted on the Situa-
tion-sman Deposits of Securities
Necessitatinga Large Underwriting
Fund the Cause of the Disruption.
Its Effect on the security-Holders
and the Floating Debt.
The report was current among the at
torneys interested in the Central railroad
litigation yesterday that the Hollins reor-
ganization committee had gone to pieces
and had entirely given up its plan for the
rehabilitation of the Central properties.
This is the startling piece of informa-
tion that Mr.. Pat Calhoun referred to
some days ago when he said that some
interesting news from New York would
be forthcoming shortly. When asked
about the matter at the time, Mr. Cal
hOun merely said:
What would you think if you heard
that Hollins Il Co. had surrendered their
plan of reorganization"
The story at that timewas only rumor,
but yesterday morning there was scarcely
an attorney interested in the litigation
but was discussing the matter, all of them
apparently having received news that
such was the fact.
CAUSES OF TUE DISRUPTION.
1t was known here that the Hollins
committee was to hold a meeting yester-
day to consider the matter finally and so
far as it was concerned to renounce the
plan, which of course means that the plan
has resulted in failure.
| On inquiry it was learned that the COM
mittee had been contemplating giving up
the plan for several days, and that it had
! finally decided, now that there was no
| hope of it's success. Under these circum-
stances it has given up, it is said, and the
long talked of reorganization of the Cen
tral railroad has gone by the board.
| The reasons assigned for the disruption
| of the committee and the announcement
| of the plan are numerous, The tremen-
| dous litigation over the Central railroad
! properties has resulted in so much delay
and has deferred so many of the security
holders from depositing their securities
with the committee that the deposits
have fallen far short of what they were
expected to be.
| TOO BIG AN UNDERTAKING.
Owing to the large amounts of securi-
ties which have not been deposited, the
carrying through of the plan would haye
involved an enormous underwriting fund,
which in the present condition of the
money market would require a greater
expense to raise than the profits to the
committee from the reorganization would
warrant. The litigations in the case too,
| oh oil hat
much trouble from that source, so far as
the plan was concerned, has been appre-
hended.
For these reasons and others the COM
mittee has decided to give up the plan.
WHAT THE DISRUPTION MEANS.
The going to pieces of the Hollins com
mittee means that the Hollins plan is no
longer to be considered as a means for
assisting the road in it's financial embar-
rassment and that another plan win have
| to be formed by someone which will be
more acceptable to the entire body of Sc
curity holders, aand which will not meet
with so much opposition from creditors
representing small interests. In other
words plan will have to be formed which
will meet the approval of all security
holders, and into which ali of them will
enter.
Unless all can agree on some plan a
large amount of money would be re-
quired in order to buy off non-assenting
security holders. In the case of the Hol-
Inns plan it would probably have required
from SIS, 100000 to $2O,0O0,000 to carry the
plan through
WHO WILL UNDERTAKE ITl
The question arises as to who will un-
dertake the rehabilitation of the prop
erty. 1t is believed by many that it will
be Drexel & Morgan, as they are consid-
cred the strongest financial house in
America, but no one can as yet predict
with any degree of certainty what
turn affairs will take. 1t is be-
lieved that the same parties who
are now carrying the floating debt of the
Central, large portion of which falls
due July l, are friendly to the road and
that they will carry it until other ar
rangements can be made Otherwise the
court which is administering the property
would have to make some provision for
the carrying of the debt.
With regard to the litigation here the
failure of the plan would have no effect
as the reorganization committee is now in
court. The attorneys representing the
reorganization committee, represent them
as creditors of the Central, they being
large holders of mortgages representing
the floating debt.
SURPRISE TO SOME.
The announcement here created sur.
prise among those unfamiliar with the
situation, and to whom hopes of success
Of the Central's reorganization seemed
bright, but to those whc have. been post
ed on the turn affairs have takeh the re-
port caused little surprise.
The securities are of course, asv stipu-
lated in the agreement, at the command of
the original holders, and it is for them to
say whether or not they will enter any
other. reorganization plan which NAV be
formed. The official announcement of the
failure of the plan is expected within a
day or two.
The Morning News at Isle Of Hone.
The MORNING News is on sale at Bar
} bee & Willett's restaurant, City and