New-York tribune., 1909-03-27
TALK OF BANKRUPTCY
Otto Hein>e s Co. Creditors Reject
Plan of Settlement.

It was learned yesterday that a deadlock exis'eo
between the failed brokerage firm OF QUO aeln-o
& Co. and its creditors IN regard 10 the settle
meht OF their claims. the alternative plans for
settlement practically having been rejected by both
sides A meeting of the creditors will be held next
week consider what further steps shall oe taken
and from authoritative it was learned that
they might decide to throw the firm into bank
ruptcy.
Ever since the failure Of the fr1n at the begin
ming Of the 1907 panic. in an unsuccessful attempt
to corner United Copper on the curb. it has been
fighting hard against being placed in bankruptcF'
asserting that with time it could meet all KS
obligations in full \ careful examination OF It's
books and accounts by a firm of public accountants
engaged by some Of the creditors for the purpose
shows however, II is said, that the actual hablh-
ties of the firm outsiders are &.l64a2l, 10 meet
which there are to-al assets OF s37460S2 OF these
total assets however. Lindsay Russell the re-
ceiver. has found actually cOllectble only between
S3e0 coo and s4G0Op0. or this $4,000 is IN cash
and $4,000 in securities. which that amount can
be realized The estimate of colIectlole as
includes all the free United Copper stock
From this showing il appears that the unsecured
creditors Wik receive less than cent OF their
claims.
It is understood that about half the creditors Of
otto Heinze & Co. principally banks, agreed TO
the plan of settlement submitted to them by the
firm. but 10 become operative 1t required the con-
sent of all the creditors. Counsel for Otto Heinze
& Co denied yesterday that the plan had fallen
through and said that they still expected 10 see
it put in operation but representatives of the cTed-
took a different view of the situation.
The plan called for the Organization Of a corpora
ton to be named the Western Development COM
pany, which was to take the collateral of the
firm. consisting almost entirely Of preferred and
common stock of the United Copper Company, ana
Il was issue its common and preferred
stock to be delivered the creditors. Each unse-
cured creditor accept preferred stock OF
the company for the par value Of his claim. while
&iv,, his tie all rolls
him would confirmed, and he would extend TO
the company option for the purchase by 1t or
such collateral the face Of the original claim
Secured creditors to receive in addition TO
the preferred stock. 30 per cent Of the amount or
their claims in the common stock Of the company
the balance of which to to Otto Heinze d
Co Arthur =. ITeinza and Max H. SchultLe. Mem
ters Of the failed firm to devote their time TO
the service Of the company. at salaries to be fixed
by the committee. II further agreed that the
board Of directors Of the company would not sell
the United Copper preferred stock at less than 80
the common at not less than &6. nor the 5000
bonds Of the La France Copper Company at less
than $3.50
The creditors were also asked to consent TO the
re-esta blishnent Of Otto Heiuze & co. Stock
Exchange firm One-half Of the firms net earnings
during the first two years be paid to the
new company to assist in the liquidation ef the old
debts.