The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1904-02-05
SH|PBU|LD|NG CASE
HAS BEEN SETTLED
Schwab VIII Not be Required
to Testify
NEW COMPANY IS FORMED
Both Sides Give Up Many Things
Which They Fought Vigorously
for Up to the Last
Moment.
NEW COMPANY is FORMED

New York, February 4.-After frequent
conferences the long fight between the
Sheldon reorganization committee in
United States shipbuilding affairs and
the bondholders protective committee, rep
resented by Samuel Untermeyer was set
tied tonight by the formulation Of a new
plan. which has been agreed to by both
sides, and the litigation in which Charles
NJ. Schwab has been the central figure
will end.
Max Pam has been removed from the
reorganization committee and Pleny Fisk,
the banker whose house, will take part
of the work of financing the new COM
pany, takes his place. while Max Nathan
of the International Pnmp company has
been agreed on as an additional member
of the committee to represent the pro-
tective committee.
Provides for New Company.
The new plan made public by William
Nelson Cromwell is put out as coming
from Receiver Smith, and provides for
a new company with capitalization of
$50. 900, half preferred and half COM
mon, Mr.. Schwab as the owner of the
Bethlehem bonds to get 100000 of pre-
ferred and Sc, 600 of common stock, and
the first mortgage bondholders to get the
remainder pro rata.
Mr.. Schwab gives up his prior lien on
Bethlehem and all the present stock is
wiped out. The present stock is TO be 7
per cent non-cumulative. There are to
be issued $3000.000 of collateral trust
sinking fund PEE cent, ten-year gold
bonds which are TO be taken up by a
syndicate of which the Morton Trust
company and Thomas F. Ryan are to be
mo md IIat r.
Elephants, the latter to market the bonds.
These bends are to be sold to the syn
dicate at S75 per 1000.
Root Is Counsel for Syndicate.
Former Secretary of War Ellhu Root
is counsel for the syndicate managers.
The new reorganization committee will
consist of George r. Sheldon, chairman:
Charles S. Fairchild. John e. Borne,
Blens Fiske, Charles w. Wetmore and
Max Nathan.
Other terms of the compromise to which
both sides gave up many things which
they have fought for up to the last mo-
ment, include provision that the ex-
penses of the fight of the bondholders
protective committee shall be paid as a
part of the expenses of reorganization.
With the reorganization, there was made
public a circular letter from Harvew
Fisk & Sons to take up the new issue OF
bonds.
Mr.. Untermeyer admitted that the
fights in the courts was practically set
tied and that 1t will now be dropped AZ
far as the litigation is hostile to Mr..
Schwab.
Mr. Schwab will not be called upon to
testify.
Case VIII Go On.
The pending case will have to go on
formally, and the matter of testing the
validity of the so-called fraudulent
bonds will be taken up in earnest. No
mention of these bonds is made in the
compromise plan. Whether this will settle
all litigation remains to be seen. 1t was
confidently predicted that the common
wealth trust interests would agree, but
this is not matter OF certainty. There
are a number of stockholders who have
threatened to bring suits. and the up
state interests. who have just entered the
field, also are to be considered In the mat
ter ~ lifiga tfon