The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1893-12-24
THEY ARE CLOSING in
Lake Shore Bondholders Secure
Another Receiver.
MR.. BROWN is CONTINUED.
John II. Bryant 60 Act With Him ~
Bondholders' Representatives.
Step 70 Foreclosure.

The Union Trust Company, OF new
York, which is the trustee for the bond
holders Of the Seattle, Lake Shore and
Eastern railroad, yesterday took q de-
cisive step preliminary to the foreclosure
of the mortgage on the road by obtaining
from Judge Hanford, in the United States
court, the appointment Of John II. Bry-
ant. of New York, to be co-receiver with
Thomas r. Brown.
The complaint filed by Hon. John B.
Allen for the Union Trust Company al
leges that at various times prior to August,
1886, the Seattle, Lake Shore Il Eastern
Railway Company made over to the
plaintiff bonds to the number of 5.675 of
81 600 denomination. bearing g per cent
interest, payable semi-annually. securing
payment by deed of trust making the
bonds a first lien; since which time III
bonds have been redeemed, leaving 5.55s
outstanding. upon which latter neither the
semi-annual interest payment. due August
1, 1898. nor the per cent. of the principal
due the sinking fund, have been paid.
The complaint further shows thar there is
So, 395. rs in the sinking fund as the balance
due the defendant Of the payment made
August l, 1892
After alleging Receiver Browns ap-
TIC SOsup tdiut StRSCs Nhas IL 10
essential that the income of the mortgaged
property shall be sequestrated and applied
to the payment of the amount due on the
bonds; that there is no proper remedy at
law, and that the plaintiff prays for a de-
cree adjudging the amount of the bonds
outstanding and directing their payment,
ana the payment Of whatever is due the
sinking fund: that the court set time for
fba, Of he inf fonnd I,to nd
decree a foreclosure if it is not paid that
receiver be appointed with the usual
powers, and that the officials of the road
be enjoned from any interference.
The affidavit for receiver accompany
ing the complaint contains the same mat
ter in different form.
The order signed by Judge Banford
gives the plaintiff permission to file the
foreclosure suit; appoints J. II. Bryant
receiver with bonds of $50. 600; grants an
extension of Thomas r. Browns receiver
ship to the present suit, and directs that
both receivers shall act conformity in all
things and report jointly all their actions
to the court.
This action on the part of the bondhold-
ers is in pursuance of the steps they have
| for some time been taking towsrds the
| foreclosure of the mortgage. Soon after
| the default in the interest payment due on
| August the bondholders. who are chiefly
located in New York, appointed COM
| mittee which arranged for the deposit of
the bonds with trust company. A large
majority of them have been deposited
| with the Manhattan Trust Com
pany. which gave engraved certifi-
| Gates to the owners. Under the mort
| gage foreclosure is to follow the
| next default in interest payments on Feb
| ruary /, 1894 which seems certain, as the
| road is earning little over operating ex-
| penses, and the Northern Pacific, though
| IL has guaranteed the interest has not the
| ability to advance the funds, even if il had
| the will, under present conditions. If the
| road is not sold under foreclosure it is
| likely TO be reorganized by the bondhold-
ers: in fact foreclosure would be only q
| preliminary to reorganization.
1t is understood that Mr. Browns man.
| agement of the property has met with the
hearty approval of the bondholders, and
that he was continued as receiver with
| their ready consent. While he will more
| particularly have charge of the operation,
| Mr.. Bryant will pay closer attention 10
| the finances. One subject which has hast
| ened action by the bondholders is the pc
| tition of the Northern Pacific for the is
sue OF receivers certificates for the large
! debt which ii claims TO be due from the
Lake Shore and which would constitute
! prior lien TO the bonds. The holders of
the latter can now, through Mr.. Bryant,
take hand in the accounting which is
| likely 10 occur between the two companies,
as asked by Mr.. Brown in his reply to the
| Northern Pacific's petition, and can thus
safeguard the interests of the Nav York
! people
Mr.. Bryant is we'll known in New York
financial circles and has paid several visits
to Seattle. He was one of the original
| stock bondholders of the Lake Shore road
and was one Of the syndicate which sold
the majority OF the stock to the Northern
Pacific. He is largely interested in the
Seattle Coal and Iron Company, and in
other mining property on the Sound.
Judge Hanford yesterday approved Re-
ceiver Browns last report in all particu-
| lars, giving him also the permission he
asks 10 put in additional sideiracks at
Sedro. Mr.. Brown was also given sI,eoo
for his services in addition to his monthly
! sfiouauea