The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-12-18
A NEW RAILROAD DEAL
INVOLVES LOUISVILLE, EVANSVILLE
& ST. LOUIS CONSOLIDATED.
Disagreement Among BOndhoIders
the Present DificuIty-PIan
Proposed.

Some time ago the Journal stated the
fact that preparations were under way for
the sale and reorganization Of the Louis
vile, Evansville & st. Louis Consolidated
Railroad under plan by which the bond
holders were to buy the road at a fore
closure sale. 1t was learned yesterday that
Receiver jarvis is now in New York call
ing on the holders of the bonds of the road
with a view to effecting some sort of an
understanding between them by which the
road can be operated without the supervision
of the Federal Court.
About a week ago a meeting of the bond
holders was held at Louisville for this pur-
pose, but it was found that q portion of
them were not in accord with the plan of the
reorganizers-their interests according to
their views, being apt to suffer by the sale
of the road as whole. The reason for the
peculiar stand taken by some of the bond
holders lies in the fact that the road was
originally operated as four divisions and
each one had issued first mortgage bonds
before the consolidation of the different lines
into one corporation and under one manage
ment
After the consolidation blanket mortgage
was placed on the entire road, bringing the
entire bonded Indebtedness of the road up
10 $lO,OOO0O0 The blanket bondholders are
ready and willing to reorganize at any time,
out the obstacles come from some of the
holders of the frst-mortgage bonds who
seeing the future of the road under Re-
ceiver Jarvis's management are unwilling
70 sen tneir holdings The ACCESSIBILITY of
ponds is fully realized and concurred i'm nv
me nrst-mortgage bondholders, but the diff
some of them to accept uniform apportion-
uehI OF new bonds among the holders of
the ponds OF the former four separate COM
RetiueS: L ne claim IS made that some of the
TOUR divisions are moro valuable properties
than others, and, in reality earn more of
the gross receipts than others. This is the
basis of the claim that in the reorganiZa-
tion me hoiders of the bonds of these more
valuable divisions should receive enough
more of the new bonds to make I'M the diff
terence In earning capacity between their
divisions and the less valuable ones The
Boston and Louisville, while the western
division bonds are held in New York, which
is beEeVed to be the seat of the new syndi-
cate which is trying to secure control Of the
properly by forced sale and a reorganza-
The question of the difference in value be-
tween the different divisions was appreci-
ated by Receiver Jarvis when he assumed
control OF the road and the possibility of
SUCH a complication was realized. Since that
time the accounts of the different divisions
nave been kept separate, showing what pro-
portion of the business originates with and
IS earned by each one. With this data at
hand 1t is hoped that the Federal Court
which 1t is now felt to Il certainty must
finally pass upon the question of apportion-
ment, VIII be able to assign to the bond
holders of each division an equitable por-
ton of the bonds of the new company, but
the present obstacle to negotiations outside
of court lie in the fact that each set of
bondholders feel that their particular di-
vision Of the road is the most valuable, and
nothing short of a ruling by the Federal
Court will satisfy them as to the justice of
any sort of a distribution of new bonds
Receiver Jarviss visit to the East is eX-
D9cted 10 bring the refractory DOndhO0PFS
to an agreement to abide by the decision of
the federal court without appealing to any
higher court and causing endless and annoy
ing litigation and obstruction to the pros
perity of the road.