New-York tribune., 1911-01-06
NEW THIRD AVE. R. R. SUIT
BondhoIder Wants Protective
Committee Discontinued.
OUR INTERESTS SACRIFICED'
Robert A. Chesebrough, Dissat'
isfied with Plan of Reorgan-
ization, Takes Action.

Right on top OF F. W. Whitridges at
tack on the Public Service Commission for
not accepting the Third Avenue reorganl-
zation plan comes action against 1t on the
part OF some bondholders.
Disapproval of this plan led Robert A
Chesebrough, president Of the Chesebrough
Building Company and a trustee Of the
Chesebroueh Manufacturing Company. to
begin suit against the protective commit
tee Of bondholders Of the road 10 compel
the committee to wind up their trust imme-
diately and return the property to the
bondholders, for whom they purchased 1t
at the foreclosure sale.
In circular letter to the other bOndhold-
ers asking their cooperation I'm the pro-
ceeding Mr.. Chesebrough says that he is
dissatisfied with the action, and also the
inaction. of the protective committee and
their plan of reorganization. In this con-
nection he adds:
The protective committee have for some
time been endeavoring to put into execu-
ton plan Of reorganization whereby u
seems TO me that our interests are sacri-
feed. to the great advantage of the former
stockholders. Such a plan has heen das-
approved by the Public Service commission
twice: nevertheless. the committee persists
in endeavcring to carry 1t through lhey
are now about to take 1t 10 the couI'S'
where 1t will necessarily he under ADVISE
ment for many months and perhaps years
In the mean time we can receive no IN
come, but the expenses Of reIlNerSHlp
will continue"
Mr.. Chesebrough objects particularly to
the provision in the last plan Of reorganiza-
tion under which the former stockholders
are TO receive $4,000 Of bonds upon their
payment for new stock TO the amount or
$4,000.
These stockholders" he says were
foreclosed and cut off from all Interest III
the property by the foreclosure suit YET
I'm the distribution OF new securities theV
are awarded $4,000 of bonds. or TINS
same issue of bonds we are to receive 10
uer cent of the par value Of our old bonds
and 10 per cent for past due interest
Considers Value Uncertain.
"The entire balance Of our investments
s. per cent. is to he made mp to us IN
Junior securities subordinate TO the $S'i"'-
900 Of bonds to he given to the foreclosed
stockholders Twenty-Five per cent OF these
Junior securities consists of stock subject
to mortgages of over Si2O0o,ON thus rem
dering the value of such stock exceedingly
remote and uncertain. II is to restrain ana
prevent the execution Of this plan by the
committee that | have instituted TINS SUIT
Mr.. Chesebrough contends that instead
of paying the former stockholders What he
terms "a bonus of $4,000 for putting
up S.2O0O00 this sum can he readily op-
tained by a bond issue at Az per cent
Surely he adds, "a property Wnich be-
fore foreclosure could conveniently pay IN
terest charges on Si3OOO,O)o, and now has
net income Of approximately over S2,cohe0'
can find a ready market for $4,000 OF
bonds i'm addition 80 its present S3,ehoW
mortgage"
He suggests plan Of reorganization un-
der which new stock should be issued to
each former bondholder in an amount equal
TO bonds held by him. This stock, in his
opinion, he saws would he worth par on
the day Of issue, and in a few years very
much more than par, and pay dividends
from the start, being subject only to first
mortgage Of 100000 at per cent and
second mortgage of s7.2OO000 at Az per cent.
The protective committee against which
Mr.. Chesebrough has begun suit was
formed in October, 1907. and is composed
Of j. y. Wallace chairman; Adrian lselin.
ir. f. ID. Randolph, Mortimer l.. Schif
and James Timpson. Hans Winterfet, now
a member Of Speyer & Coz was formerly
member of the committee, but resigned
some time ago.
The invitation to other bondholders 10
join in the suit has been accepted already
by Francis Rawle, head of the Bar Asso-
iatiOn Of Philadelphia. among others.