The sun. [volume] (New York [N.Y.]) 1833-1916, 1902-12-22
AMERICAN BICYCLE DISPUTE.
NEW REORGANIZATION PLAN EN-.
COUNTERS OBJECTION.
Receivers Themselves Disagree and
second Committee Is Formed With
an Opposition Plan-COl. Pope says
the First plan VIII 30 Through.

A brisk contest among the principal
Interests in the American Bicycle Company
Is developing over the plan 81 reorganiza-
ton announced to-day 10y the committee
which has had the matter in charge since
September. OF the three receivers OF the
company, Col Albert A Pope is in favor OF
the plan, H. Lindsay Coleman, the former
presiden, Of the company, is emphatically
opposed to il, and Judge John 4. Miller
of Newark il non-committa al. with leanings
toward the opposition. Col. Pope said last
night that Judge Millers attitude didn't
matter, as he had no interest in the com
pany.
The committee consists Of William A.
Head of Nermiye h Co, Frederic p. Olcotf,
George F. Crane, Colgate Hoyt and Francis
+. Smithers George W. Young, president
of the nited States Mortgage and Trust
Company, was originally member OF the
committee Onp of the committee said
last night that Mr.. Young was asked 10
retire because he did not subscribe To the
underwriting of the plan. Mr.. Olcott
replaced him several days ago.
The opposition to the plans on the part
of some Of the bondholders has crystalized
into a second committee which is said 70 IN
Cllde Edwin Gould, Henry h, Mcftarg,
vice president Of the Bank Of the Man
haitian COMPANY Daniel =. Morse. diI &C.
tor of the Irving Bank, Lee Higgins OF bos-
ton, George W. Young and others.
The plan submitted 10y the reorganization
committee provides for a capital stock OF
S22. 500, 600. OF this 5, 500,OOO per cent
cumulative first preferred is 10 be Issued
for cash only $40 100, 600 is q per cent. nom
cumulative second preferred, and slO'Om,oV
In common stock To holders OF the present
per cent. debenture bonds par in the
new non-cumuative second preferred stocks
az is offered To- holders Of the present
preferred stock = in new first preferred
and $50 in new common stock on the pay
ment of al assessment OF " share ana 10
holders OF the present common stock on
the payment Of ike assessment - in new
first preferred and SIS in new common
stock
The objections Of Receiver Coleman and
the opposition bondholders' committee are
chiefly to the exchange Of debenture bonds
for non-cumulatNe second preferred STOCKS
They point out that II the bondholders
do not choose to make the exchange the
reorganization committee has so arranged
the plan that there is practically no alterna-
tive offer. They say that the committee
should have stated how much it was pre-
pared to pay for the company's plants TO
that bondholders might have made choice
between taking non-cumulative stock and
demanding cash from the proceeds OF the
sale. Aside from this objection the pro
testants say that they have had no oppor-
tuntv to share in the underwriting.
Receiver Coleman made this statement
last night: Il have refused TO sanction
the plan for two reasons. The bondholders
are not properly provided for and believe
the plan calls for over capitalization. To
the bondholders are offered non-cumula-
tive second preferred stock and no al
ternatives. for the plan does not provide
for the having on of tho hopu npllprs
Some amount. $50, $40 or $25. should have
been offered as an alternative. IL the
properties sell for a small sum the nom
subscribing bondholders suffer. The
plan Ia therefore coercive in that respect.
In the second place the company. has not
COO Then the company is to be placed for
five years in the hands OF a voting trust
which knows nothing about the bicycle
business The plan ia not, therefore, a
fair and just one to all the creditors of the
company
Judge Miller said last night that he was
In favor Of any plan That made for the best
interests OF the creditors. He thought
the bondholders ought to be assured
Of a fair return for the money they had
invested, and agreed with Mr.. Coleman
that the contemplated capital was too big
Col. Pope said that he indor sed the plan
In every particular.
sIt has been worked out by men Of the
highest financial and business standing"
be said, sand Is absolutely the fairest to all
creditors that could he devised. myself
OWN more bonds and stocks than any three
men, and, with my friends. intend to de-
hosit my holdings and help put the plan
through. There are always disgruntled
persons in a case of this kind but their
&forts will prove of no avail as our in
tefSAts are too strong to be thwarted In the
evnspie,inR Of this plan. The plan will go
through safely, the creditors will be well
repaid and the business will be put on
substantial and remunerative basis"
AT waA learned yesterday that the inten-
ton Of the opposition committee is to issue
a plan early this week and TO ask for it's
Endorsement by the bondholders. In any
case. it was said. the committee would go
into the market when the plant II offered
at sale and bid against the reorganization
epnrnittee with the object OF securing the
plants 81 the company in order to operate
them, permanently.
Judge Miller said last night that this
opposition bidding, II il came about. would
probably result in favor of the companys
creditors, as II would lead to the payment
a good figure for the assets.
The cash requirements Of the plan which
has resulted In 40 much opposition have
been underwritten principally by the mem
bers OF the reorganization committee.
The American Bicycle Company was in
corporated In New Jersey in MAY, 1899
The valuable assets Of the company consist
largely Of shares Of stock in the following
corporations, among others
Share,
American Cycle Manufacturing Co........... so.cO
Federal Manufacturing Co ,,............... ~ OD