The Birmingham age-herald., 1909-04-27
FINAL ARGUMENT IN SOUTHERN STEEL Judge HundIey VIII Pass on
 Sale Today NEW MOVE IN NEW YORK Moreau Seeks to Restrain Reoreanza- ton Committee from Dsposing of the Assets of the Com
 pany.
NEW MOVE IN NEW YORK


 Judge Hundley will hear the final argu- ment in the Southern Steel case this morn ing and 1t is expected that he will im- mediately issue an order confirming the sale Referee Sterling A Wood was busy in court all of yesterday hearing testi- mony on expenses and objections brought by several creditors.
 The New York Commercial of Satur- day prints the following:
 An effort of minority bondholders to up- set the reorganization plans of the bank rupt Southern Steel company came to light yesterday in an application to Su- preme Court Justice Davis for an in committee from selling or in any way disposing of the assets of the Southern Steel company. The company has just been reorganized under the name of the Southern Iron and Steel company, 4ncor- porated in New Jersey.
 The plaintiff named in the action is Lew is Moreau, who says he is the holder of $l0000 trust bonds in the company while he names as defendants James T. Wood ward, Otto T. Hannard. Walter T. Rosen. Franklin O. Brown, William P. G. Hard ing Cornelius Vanderbilt and Robert B. Van Cortlandt. composing the reorganiza- tion committee. Luther Lafiin Kellogg appeared for Moreau, while the commit tee was represented by William B. Horn blower.
 Moreau in his affidavit declared that the plan of reorganization Is fraudulent and MT. Kellogg characterized it as an '1nquitous scheme" to form a new corpor- ation composed of a great quantity of watered stock, The plaintiff admits that he once agreed to the organization plan, but says he didn't know at the time that the value of the entire property with all it's subsidiary companies was only $75OO,- OOO He says that fin 1907 when the com- pany got into hot water the men conpos- ing the present reorganization commit tee, who represent all the first mortgage bondholders, sent out a plan of reorgani- zation In which they put the value of the assets as S27, 100000. He deslared that the appraised value of the assets is only $7, 100000, and when sold by order of the court on April 12 last and bought in by the committee, 1t brought only $5,OOOoOO,- GOO. The new company, the Southern Iron and Steel company, has capital Of $27, ,OOO, ,o0o
 MT. Hornblower told the court that the reorganization plan was far from a fo of on Of or stockholders, because instead of seiz- ing the entire assets to offset the first mortgage bonds, which they might have done they have arranged to protect everyone. He said those interested in the company who have agreed to the reorganization, include all the first mort gage bondholders, 99.75 per cent of the holders of the collateral trust notes; 4S2 out of the 66s creditors, having s1,3S7 ,15S out of the s1.510.SoS total claims; 1Oe pre- ferred stockholders, who have sS5,0OO of the $10O 900 preferred stock, and 105 of the common stockholders, having $1SS,25S out of the entire $150O00 stock. He says that only nine stockholders have declined to agree to the plan.
 The reorganization committee has gone to some trouble to find out something about Mir Moreau, MT. Hornblower said The four 10000 trust notes now in the hands of Moreau were originally owned by Samuel l.. Knight of No. 41 Gramercy Park, who originally consented to the reorganization and deposited his notes with the New York Trust company. Later he changed his mind and withdrew them, and the committee didn't take advantage of it's right to withhold them.
 When the notes were redeposited later under the name of Moreau, Mir. Horn blower said that the committee decided to look into the matter. It learned that Mo reau is a Frenchman about "A years old, who lives at No e16 Lormer street. Brooklyn, and is bookkeeper employed by w. L. Lewis & Co.,, manufacturers of paper lace, st No. 134 Wythe avenue, Will liamsburgh Moreau gets $25 week sal- ary The committee found out with lit tie trouble that MT. Knight is a member of this firm MT. Hornblower said 1t was clear that he was simply used as cover for someone else.
 Mir Kellogg wound up his plea by say ing that the injunction ought to be issued not only on the ground of fraud. but be- cause the new corporation has been formed in distinct violation of the laws of New Jersey, where it is incorporated. He says that the laws of that state pre- vent the issuance of stock for any amount above the actual value of the stock, and pointed out that property which the ap- praser valued at only $75Oo.oOo. is the basis of the company having a capital stock of $27,Ooo,o0o. Justice Davis reserved decision
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