Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1914-10-31
KBRYDE Will
HOLD IMPORTANT
MEETING NOV. Il
To Consider a Reduction o
CAPITAL for legalizing
Dividend Payments

Company, Ltd, on November IL; TO
reduce the capital stock by 800, 900.
by means OF q reduction OF the par
value OF common stock shares from
so 10 SIC each
This proposition Is based on an opin-
ion given, in response TO request
from the directors OF McBryde, by e.
n. Hemenway of the law firm Of
smith. Warren, Hemenway q Sutton,
and Judge ]. T. De Bolt lately q
justice OF the supreme court In the
request only preferred stock was mem
toned in connection with the question
OF dividends, but the lawyers say there
is no distinction between the common
and preferred stock as to the payment
| of dividends.
Stated in formal language, the
opinion continues, "the exact question
submitted is whether or not McBryfe,
Sugar Company. Ltd, can legally de.
clare dividends considering the fact
that the profit and loss account Oh
1.-THE company shows debit balance,
or. in other words. that although the
company win carry over cash surplus
at the end Of the year taccording te
! the best estimates which now can be
made) after paying all obligations,
other than the outstanding bonds and
| I'M connection with the bond issue, max
| ing the prescribed payments to tht
sinking fund, the books of the com
pany will still show loss and not
profit.
=. r,.-. 49, a.. i,es orcnrrad II
| the early years Of the plantations
existence, some time prior to the 10;
suance OF the preferred stock, alsf
that the proper per cent dividend
was paid in 1912 on the preferret
stock even though the profit and lossl
account a. that time had q debit bal
| ance as Is the case now. The ques
| ton has now been raised by the re
| port OF an investigating COMMITTEES ap
lpointed by the stockholders on Jan
Iuary 90 last, the committee being o
| the opinion that no dividend will b.
justified as long as debit balance re
mains I'm the profit and loss account /
LIT IS also held by the committee tina
1.-THE installation account is par OF tn.
Iproit and loss account, and the Law
yers consider that the installation &C
count should be treated as loss &C
count.
In their opinion any objection which
lean be made to the payment Of a div
Idend, either ON the preferred stool
Tor on the common stock, is q YER.
technical one. They practically holt
that the danger of legal objections o.
adverse proceedinss II the courts from
either creditors or holders Of common
stock Is very slight. Yet they believe,
|athat the practical and safe course i
to reduce the capital stock by such AZ
|amount as win wipe out the debi
balances In the loss accounts,
No reduction should be made In thu
par value Of the preferred stock, thu
opinion holds, because the holder
thereof occupy toward the corpora
|tion an attitude very similar to that o
4 creditor. Under the reduction il I
/ par value OF the common stock, 1t i.
pointed out common stockholders vii
have nothing taken from them, as th,
assets remain unchanged, and vii
have an equal voice with preferred
stockholders in the affairs of the com
pany. In conclusion the opinion says
Al reduction can be accomplishet
by the affirmative vote Of the holder
Of three-quarters OF each of the two
class of stock outstanding, but no re
dAction can be made which will resuI
I'm the remaining capital stock bein
less than double the outstanding In
|debtedness. We understand that tn. {
directors of McBryde Sugar Company !
Ltd. have authorized the immediat,
payment to the trustee for the bond |
holders OF the balance remaining du.
on account OF the $780, 900 sinking fun.
payment due for the year 1913, and o.
the full amount OF 100000 due the
sinking fund Tor the year 1914. as re
suit Of which the outstanding bond
win be reduced slightly below the az.
grekate par value Of 81, 800, 900. No re 1
duction therefore OF the capital stoc
can be made which viii result In 1t
being less than the aggregate amour
| Of So. 500, 900. The present capita
stock Of McBryde Sugar Company