Evening star. [volume] (Washington, D.C.) 1854-1972, 1911-10-15

Continued From First Page
Tobacco Company as the consideration
for conveyances of certain of its factories,
brands, businesses and capital stock of
tobacco manufacturing companies. The
common stock of the new companies then
will be sold for cash at par to common
stockholders Of the American Tobacco
Company, thus making what is In the
nature Of an assessment of $780, 651 ,925 on
the common stock Of the American To-
bacco Company.
This sum-" the plans states, will be
used for the retirement and cancellation
of existing bonds of the American To-
bacco Company. Each per cent, bond
holder of the American Tobacco Com
pany Will be offered S120 In cash for half
his holdings. and for the other half Z
per cent bonds at par in the aggregate Of
the hggett & Myers and Lorillard COM
panies.
Each 4 per cent bondholder of the
American Tobacco Company will be Of
the other half per cent bonds at par in
the aggregate of Liggett & Myers and
Lorillard companies.
Each preferred stockholder of the
American Tobacco Company will be Of
fered the right to exchange one-third of
his holdings at par into per cent pre-
ferred stock of the Lggett & Myers and
Lorillard companies.
To Pay Bonded Debt.
THE effect Of these changes when made
will be to pay off the entire bonded debt
of the American Tobacco Company,
| amounting to $1O4, 236. $50, and to reduce
! its assets correspondence. 1t will be left
with $50. 459500 of the preferred stock
and $40, go, 400 of common stock, as its
only outstanding securities. The prefer.
| red stock will be given full voting rights
and the control of the American Tobacco
| Company thus will pass from the twen-
1 ty-nine Individual defendants to the hold
| ers of S92 us. 800 preferred and common
| stock.
! Both. the preferred stock of Liggett
& Meyers and Lorillard companies
also have full voting rights and the
| twenty-nine defendants will control
| neither of these companies. The same
will be true of the r. j. Reynolds To-
bacco Company. None of the four COM
panies Will have any interest in or
relation to the other, although at the
outset they will, of necessity have
many stockholders in common"
The securities In existing subsidiary
companies which 1T is proposed to dis
tribute include those of the United
Cigar Stores Company, the Cenley Foil
Company, McAndrews & Forbes Com
pany, American Cigar Company, Brit
ish-American Tobacco Company. and
the American Snuff Company, including
those of the two new companies to be
formed out of the last-named COM
pany. What will be the total value Of
the dividends from the distribution Of
these various securities the plan does not
set forth
Covenants Are Terminated.
All restricted covenants. both domestic
and foreign, with corporations and indi-
viduals not to engage In the tobacco
trade are to be terminated, it is stated.
| Execution Of the plan will involve, 1t
is stated, the disposition by the American
: Tobacco Company of stocks, factories,
brands and other-pFeperty earning a net
annual income. based on actual results III
1910. of Sc, 5aS. az and will vest the
control in a. body of more than 6O00
stockholders.
No small group of men, not even the
twenty-nine individual defendants. in the
{ aggregate will own the control of any Of
the principal, accessory or subsidiary
companies, the plan states.
The total cost to the common stock
holders of putting the plan into effect,
1t is set forth, including the increased
interest. and preferred dividend charges
capitalized on five-per-cent basis, the
payment of bonds at above par, the
expense of the disintegration itself and
the organization Of the new companies.
will amount, at least. to S22. 900. 900, this
| In addition to the $50. 651 ,925 in cash
| to be used toward paying OF the bonds
| Of the company.