The Columbus weekly dispatch. (Columbus, Miss.) 1902-1905, 1906-08-23
SALE IS RESTRAINED
HON. JNO. A. DAVIS, REFEREE
IN BANKRUPTCY FOR THE
NORTHERN DISTRICT
OF MISSISSIPPI,
Issues Order Restraining the Sale OF
Underwear FactOry--Property
to be Sold Under Trust
Deed by Local Banks.

On Thursday Hon. Jno. A. Davis,
referee in bankruptcy for the North
ern District of Mississippi, issued an
order restraining the proposed sale
of the property of the Columbus
Underwear Company, which was TO
have taken place on yesterday. The
three local banks, the First State
Bank, the Merchants and Farmers
Bank, and the Columbus Insurance
and Banking Company, hold bonds
of the Columbus Underwear Co.,
which, together with the accrued in
terest. make therein the total amount
of Indebtedness $62, 100000. These
bonds are protected by deed OF
trust on the plant and machinery,
and it was TO enforce this deed OF
trust that the sale was TO have been
made. In addition to the S62,100
above mentioned, the company owes
a sum amounting to about $23, 900
to other parties which is entirely
unsecured. The unsecured creditors
are the Marlboro Cotton Mills, of
Mccall, S. c.; the Statesville Cotton
Mills, of Statesville, n. c.; Paulson
Linkrum & Co., of New York, and
the Refuge Cotton Oil Company, and
these creditors, through their attor-
news, Hon D. w. Houston, of Aber-
deem, and Hon. 4. P. Landrum, of
this city, asked Referee Davis TO
issue an order restraining the sale.
The argument of the case took
place before Referee Davis at the
Office of Messrs. Belts and Sturdivant
on Thursday afternoon. Mr.. Hous-
ton and Mr. Landrum were present
to look after the interests of the
plaintiff, while the First State Bank
was represented by Col. VIM. Bald
win, the Columbus Insurance and
Banking Company by General E. T.
Sykes, and the Merchants and Farm
ers' Bank by Messrs. Belts and Stur-
divant. In their petitions the plain
tiffs averred that to sell the property
under the deed of trust as proposed
would be manifestly unjust, as the
holders thereof would bid in the
property for the sum covered by their
Indebtedness, and that the unsecured
creditors would be left entirely with
out recourse. They further alleged
that the mortgage or deed of trust
under which the property was to be
sold was invalid, claiming that
clause which it contained including
''all after acquired property" was
illegal.
In their argument urging the wis
dom of the proposed sale, the attor-
neys representing the three banks
differed somewhat as to the actual
value of the property. Col. Baldwin,
representing the First State Bank,
set up the, claim that the company
was solvent, while Mr.. Sturdivant,
one of the attorneys for the Mer-
chants and Farmers Bank, admit
ed that he believed the company to
be solvent, and said that he did not
believe that when put up at public
sale the plant would bring no more
than enough to pay off the bonded ,
Indebtedness. He argued, therefore,
that it would be unwise to restrain
the sale, as the property would bare
ly bring enough to pay off the bonded
Indebtedness, and the unsecured
creditors would gain nothing by de-
laying matters. Mr.. Sturdivant also
stated that the property was now be-
ing maintained at a cost of about
$3.50 per month, $500 being paid
out as interest to the banks and
about $50 for incidental expenses.
He said that in view of these facts
the sale should be allowed to pro-
ceed. ~ 8%H Il
All of the attorneys spoke exhaust
lively on the different features of the
case, and after listening to their adj
dresses Referee Davis decided in |
favor of the plaintiffs, and issued an
order restraining the sale, as prayed
for in the petition.
Messrs. Lan1rum and Houston
have, on behalf of Of their creditors,
already filed a petition asking that
the company be declared fnsolvent, /
and after a meeting of the creditors !
a receiver viii be appointed Ref
cree Davis has promised to call a /
meeting at the earliest possible mo-
ment. though it. will be probably )
sixty days before the matter can be
finally disposed of. - ~