The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1908-06-29
REACH CLIMAX
INB|GE[DORADO
MPANY CLASH
Bankruptcy Tribunal to Unravel
Tangled Affairs of $l,000,000
Lumber Corporation
Bond Holders of Concern Wage
Bitter Strife Over Manage
ment of lie Breton
Court to Decide Long Standing
Dispute Between Creditors
and Receiver

A series of disputes which at times
threatened to assume the character oi
fistic encounters over the affairs OF the
Eldorado lumber company, one of the
strongest industrial concerns con.
trolled by the defunct California safe
deposit and trust company, will reach
climax today in the bankruptcy
court. A petition has been filed by E
]. LIE Breton, receiver of the bank
and it is the confident belief of those
acquainted with the circumstances that
an order will be issued that the af-
fairs of the company be wound up as
rapidly as possible.
The story of the Eldorado lumber
company. a corporation valued al
$1,000,000, has been since the failure
of the safe deposit company a series OF
bitter internal dissensions, in which the
rival interests have been unable to
reach common ground. The bond hold
ers. whose claims aggregate $4,000
have clashed repeatedly with LIE Breton
and q friction has developed which mas
engendered much bitterness of feeling.
The bond holders do not question LIE
Breton's intentions. but charge that he
has managed the property in an un-
satisfactory manner. In reply, LIE
Breton states that he has been acting
solely to serve the interests of all par
ties concerned. The real trouble involves
a question of policy, and when it be-
came evident that the bond holders
and the receiver could not agree the
former took steps to foreclose and the
receiver at once took the matter into
the bankruptcy court.
CREDITORS AND DEPOSIToRs
Not only are the bond holders of the
company and LIE Breton parties to the
controversy, but the creditors of the
lumber concern and the 12,50o deposit
ors of the California safe deposit and
trust company are directly involved.
A full exposition of the internal
wrangling is expected during the
bankruptcy proceedings, which Will be
begun this morning.
At the time of the bank failure two
properties were named as promising
good returns to the depositors These
were the Carnegie brick and pottery
company 1unD6r
pany As far as known, the affairs of
the brick company have proceeded
TRANQUILITY, but the trouble over the
lumber company was not long In devel-
oping. The bond holders discovered at
the outset that no provision had been
made to meet the interest on their Sc
curities and an arrangement was ef-
fected by which a sinking fund was
created to meet these payments
In order to protect their interests
the bond holders met and transferred
the trusteeship from the California
safe deposit and trust company to the
Union trust company. Since then an
other change has been made to the
Mercantile trust company. Among the
holders of these bonds are the Gallatin
estate, which owns bonds to the amount
Of S160,000; r. ]. Ralston, whose hold
ings reach $4,000; the Union national
bank of Oakland, 5000; o. M. Gold
aracena, $4,000, and a group repre-
sented by Oscar Sutro, whose holdings
amount to $4,000. After expressing
their desire to put the lumber company
on it's feet the bond holders named
Albert Gallatin Jr. as their representa-
tive on the board of directors of the
company.
OPERATION STARTS ROW
During the preliminary negotiations
all parties were in more or less accord
but when lie Breton undertook to op-
crate the mill at the companys prop
erty trouble arose. lie Breton had
called the creditors together, whose
claims aggregated S125,000, and secured
from them an advance of $4,000 with
which to resume operations. At the
same time he received permission from
the court to expend $250,000 on the
work IL necessary. The mill was
started and quantities of lumber cut
LIE Breton put on two shifts, running
the plant night and day. With the
slump in the lumber market demand
slackened and prices fell with a long
drop. The company found itself con-
fronted with a big supply of lumber
with no market at hand. The bond
holders entered a vigorous protest. de-
claring that it was unwise to operate
the mill full blast at time when there
was little demand for the lumber Ac-
cordingly a notice was sent to the
Mercantile trust company in which the
bond holders proposed that steps be
taken to foreclose unless the manage
ment of the property We're placed in
other hands. The bond holders charged
that they were denied any part in the
management of the concern and that
LIE Breton dominated the directorate.
At this time creditors also became
restless and met in the rooms of the
board of trade. The $4,000 they had
advanced had been used in operating
the mill, but no part of the $3.50, 900
which the receiver had been empow-
cred to draw from the bank had been
expended.
To involve matters still further the
lumber firm of Holt & Gray and the