The Detroit times., 1914-04-30
NOFRESH ACTION
ONP.M. RY. CASE
EXPECTED MAY |
Grace on Failure to Pay Interest
/ Expires, But Nothing is
Likely to Happen
DEFAULT MADE AS
FAR BACK AS YEAR AGO
''Can't See How Any New Fea-
lures Can be Added" Says
Attorney Campbell

No new Developments In Pere Mar
quette matters are expected TO FOL.
low May /, when the 90 days Of grace
after the failure to pay interest on
the Flint e. Pere Marquette irst
mortgage bonds expire. The reason
Is that there was default on these
bonds as far back as April, 1912. and
any action contemplated by cue bond
holders or their fiscal agents could
have been taken al any time since
then.
In fact, according TO those in touch
with the situation there have been
two defaults One came when the
coupons, instead OF being redeemed
by the Pere Marquette. when they
became due, were purchased by the
Guaranty Trust Co.. OF New York.
The other wac when the 1912 taxes
were paid by receivers certificates,
which take precedence even over first
mortgage bonds, as liabilities Of the
road. Action could have been taken
by the bondholders after each OF
these defaults The coming of May
merely adds another default TO the
list.
People close to the road say that
there have been defaults covering
every issue OF bonds save those on
the Gage Ib-- I(1eSi 0p wh3eN taxes
have been pald@and on certain bonds
secureR by mortgages OH special d.
visions OF the, road.
ANY further foreclosure proceed
ings must come under the general
foreclosure already begun, said At
torney Henry NJ. Campbell, represent
ing the receivers, Thursday morning.
II do not see how any new features
can be added to the situation What
ever may be started must follow the
course OF the proceedings already in
stituted and must come under the
same general head"
Frank w, Blair, one OF the receiv-
ers, said, Thursday, that the receiv.
ers are interested merely in continu.
ing. to operate the road as best they
can, and that the bondholders them
selves must look out for. their own in
terests.
The $7,610,000 which the Pere Mar
quette receivers have asked for, In
request TO the federal court 10 Issue
six per cent receivers certificates, is
TO be devoted, 1t is proposed, to the
following purposes:
4, Past due receivers tax certificates,
S605,000; receivers notes issued TO
pay 1913 taxes, $550.000; taxes for
this year. 100000; balance OF notes
issued TO meet pay-rolls. 100000;
present Indebtedness OF receivers, not
fsc cd In, Ana taa
notes, $4,000 900. matured equipment
obligations, not provided for by exist
ing receivers certificates, $775,00O;
unmatured equipment obligations, ma
turing before June l, 1915. $SS0,000.
cost of proposed block signal system,
100000; cost of proposed new equip
ment, $250,000; necessary repairs TO
5000 cars in bad order. S650,000
In addition, the receivers are asking
for $3.500.000 TO cover outstanding re.
ceivers' certificates, due June 80, 1915,
and such equipment obligations as
may mature after that date.
No money is asked with which to pay
interest on the bonds or the road The
purpose OF the court and OF the re
ceivers. who are officers OF the court,
is TO throw the road into reorganiza-
ton and sale.
''The important question for me TO
decide, May 16." said Judge futile,
sis just where | shall place the re-
ceivers' certificates with reference 10
security | can made them an abso-
Lutte first lien on the property, even
ahead of first mortgage bonds. This
will be opposed by the bondholders.
On the other hand, II they are not Civ.
en- this priority, there is danger OF
having TO sell them at discount, and
the court will be placed In the posi-
ton of adding water To the outstand.
ing obligations"
Judge futile does not believe that
foreclosure and reorganization can be
effected in less than g months. In
the meantime, his object is to keep
the road in operation, so that the peo'
pie OF Michigan may continue TO be
served by II.