The Detroit times., 1912-06-13
KUHN WOULD INTERVIEW
FOR STATE IN THE PERt
MARQUETTE RECtIVtRSHIP
Acknowledgement Files Petition
Declaring Road Has lncapac-
itated Self as Carrier
BoNDHoLDERS IN PROTEST
Farmers Loan & Trust Co.. OF
New York. Opposes Issuing !.
of Receivers Certificates


In accordance with intentions an
nounced when the Pere Marquette
railroad first went into recelyership.
Attorney General Franz Kuhn. Med a
!pe,,;lon in the United states court
"wednesday morning. asking that the
,s,ate be allowed 10 Intervene IN the
rectivershlr proceedings, for the pro-
lection OF the people OF the state
The petition says The property
NJ the railroad has been allowed TO
ldeteriorate. and its equipment mas
been permitted TO run down without
proper repair and maintenance or It's
tracks and roadbeds, without supply
new engines and cars and other
equipment 10 replace WORKOUT ana
Worthless equipment, and the com
pany has thereby incapacitated ltseH
/ for the performance OF its duties as
a common carrier for the people or
the state OF Michigan.
The petition goes on 10 reclte mat
the people acquired rights and interest
/ M the proper management, operation
land control OF the railroad by grant
ling Il a franchise 10 build It's lines IN
the state. and that the estate should
| be allowed 10 intervene and become
party 10 the case on behalf OF the
people OF he state.
Through Attorney Hinton Z. Spald-
ing. the Farmers Loan & Trust Co.,
of New York. Wednesday morning, pc
titioned the court 10 set aside Judge
Angels order OF May 80. permitting
the issue OF $500, 900 receivers GER
az f.an M -
bondholders on or before June L..
The filing OF the objections VIII pre-
vent the issuing OF receivers certih-
Gates until the matter has been
heard further In court.
The Pere Marquette case, on which
the receivers were appointed. is dock
eted as that OF the American Brake
Shoe & Foundry Co. against the Pere
Marquette Railroad Co, and the
Farmers Loan & Trust Co., in filing
its objections, alleges that the S1,lb4
claim OF the American Brake Shoe q
Foundry Co. has never been reduced
TO a judgment and remains a general
unsecured Indebtedness, the many
millions OF liens outstanding not be-
ing represented in the cause pending
In court.
The receivers were appointed" II
is alleged, AT the instance OF parties
who have not shown any real interest
OF equity in the property" and IL is
further declared in the objections
filed by the Farmers Loan a. Trust
Co. that IL is doubtful whether there
could b. any equity above the amount
of the mortgage debts.
Further, IL is alleged, that the
status OF the system is so complicated
by the receivership and the imminence
of defaults contemplated in the re-
ceivers' petition that situation is
precipitated threatening the dismem-
berment OF the system.
The information as TO the proposed
disposition OF moneys realized by the
sale OF receivers certificates is al
legged by the Farmers Loan q Trust
Co, TO be insufficient to determine
whether the proposed expenditures
will benefit that part OF the system
which individually comes under the
consolidated mortgage OF Jan. 2, 1901,
in which the bondholders for whom
the loan company is trustee are In
terested
"Betterments and improvements
should be paid out OF net earnings,
says the Farmers Loan & Trust Co.,
rather than applying the net earn
ings 10 the payment OF interest In
the hope OF preventing a dismember-
ment OF the system which may come
anyhow, and certainly threatens UNI
der this petition OF the receivers"
The hearing on both petitions was
set for June "a.
The action OF the attorney general
is believed to have been precipitated
BY the announcement that certain OF
the bondholders would Ale objections
to the issuance OF receivers certih-
Gates TO provide for improvements in
the Pere Marquette. The attorney
general will oppose the admission OF
these objections. and will urge that
the order which was issued by Judge
ANGEL. May 30, be allowed TO stand,
IL his petition for the right to inter
vene in the case Is granted.
The Farmers Loan e. Trust Co. rep
resents a bondholders committee
which has been authorized TO act for
a large majority OF the holders OF the
mortgage bonds, amount
ing 10 IS. 49,. 900. and II Is the general
opinion that their action in interpos-
ing objections is simply a move to
drive a better bargain with those In
terested In the rehabilitation or the
Pere Marquette. There Is no sugges-
ton that they would force the road
to disintegration. because II Is doubt
full II they could realize anything on
their holdings under such circum-
stances. II Is believed that the OBJ
jections will be withdrawn II some
can be reached whereby
the consolidated mortgage can be
given precedence over the receivers
certificates. A similar provision was
made for the underlying bonds in the
order as originally issued by Judge
Angel.