The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-03-03
SlEGEL.V0GEL CASE
BEFORE GRAND JURY
1llegalities in Obtaining Credit
Alleged at First
Session.
STORES MAY LIQU1DATE
Plans for Reorganization Fail
ing-Prospective Money for
Creditors Dwindling.
STORES MAY L1QU1DATE

Dlbti1Ct AttOTney WHituhu Oo8hu yen
terday to present to the Grand Jury the
ease of Henry siegel and Frank Il. Vogel
as private bankers and controlling spirits
Of the Siegel enterprises Ono witness
was examined at the FIRST session, a rep
resentative Of a New York city bank.
There are two matters under investiga-
ton: One that. knowing themselves to
he insolvent. the private bankers accepted
deposits from customers; the second, that
In their written statements to credit agen-
cies, mercantile establishments and banks,
for the purpose of obtaining credit, there
was a failure TO report the indebtedness
Of the various corporations TO the pri-
vate bank.
Just about the time the District Attor-
ney took a definite step toward criminal
proceedings it became known that the
efforts OF the mercantile creditors to ef-
feet reorganization Of the Fourteenth
street Store and Simpson Crawford Com
pany have failed. This will mean that
instead Of obtaining $4,000 from the
mercantile creditors as a lump sum for
the Indebtedness of the stores to the pri-
vste bank tho bank depostors will not
get more than $c5o.000. Under the other
plan they would have received 32n cents
cash on the dollar. with the balance
due in five years and secured by $4,000
900 Of tho common stock Of the Siegel
Stores Corporation. Under the settlement
that seemed inevitable yesterday they
will obtain about 30 cents on the dollar.
" there 10 no prolonged litigation, with
dim prospects for the balance.
yatu s.ut~uce rhre.tev~d
The name Of the witness who appeared
before the Grand Jury yesterday could
not be learned He was said to appear
from bank with knowledge that some
man had signed a credit statement that
failed to set forth the Indebtedness of one
Of the stores to the bank Of Henry Siegel
l. Co. This is a misdemeanor under the
law. There can be a sentence of eleven
months in the penitentiary and a fine of
$1,000 upon conviction. There will be
more witnesses to-day. end some OF them
will bring books and other papers bear
ing on that branch of the case. The sec
Ond matter will DO taken up later.
A crowd OF depositors, committees and
representatives OF the various interests
appeared before ex-Judge Holt yesterday
90 hear the amended offer OF Harry kohr
in behalf OF the Depositors Assets Reaii2a
ton Corporation. which has tried to buy
the bank claims for Siegel and Nogel
Mr.. Kohn said the friends OF the two mer
have the $4,000 TO pay for the claims
and that this sum. with $4,000 supplied
BY the creditors, $780, 900 from the bon,
and 325, 900 cash in the hands Of the re
ceiver, Henry Melville, will permit a divi
dend Of 32is cents. and the balance wouit
be secured by notes. Mr.. Kohn said HI
understood that IL the reorganization
failed the depositors would receive onl!
Sss0.000 from the mercantile creditors
Thin would xiv, =, dividend of 10 cents.
Rcorga MIR alton Less Likely.
After Mr.. Kohn had finished talking 1
became known that tho mercantile credit
ors are on the point Of abandoning al
efforts TO erect Il reorganization tina
would continue the New York stores !,
business. There are two reasons ON
ie that the landlords will not make an,
concessions in rent due or any concession
on the lcases, which have e period to run
the second is that the present preferre'
stock holders of the Siegel Stores Corpora
ton. who were expected TO buy 100000
worth OF new preferred stock for casf
will not do II. While no one would b
quoted. II was intimated that II mean
the stores must go into liquidation.
Judge Holt allowed everybody to tai
yesterday and finally agreed to take Nj
Kohn's offer under adv!sement for a wee
TO permit depositors or anybody else t
ME OUytCtiOTs 10 IL. re coflt.HVeu III
hearing until next Monday at 1913
o'clock, after which the matter will &
TO the United States court for decision
Half a dozen depositors talked yesterda
on all sides Of the question. and John I
Murray of Coudert Bros. advised thei
TO consider seriously before making
fuss. He figured that the best they ca
get will be 90 cents cash on the do.la
II they reject the OFFER they will get III
cents in cash. and II they bring abor
litigation they will get . cents on tn
AOllar