The Washington herald., 1914-06-26
'CLAFLINS FAIL
FOR s34,OOO,OOO
Mercantile House, Controlling
Stores All Over Country,
Goes Into Receivership.
MANY CITIES AFFECTED
Indebtedness May Reach $40. .0OO. 900,
with Assets of $4,000. 900 Bliss
Takes the Reins.
,c.,l o rh, W.shinrton HeraN.

Special TO The Washington Herald.
New York. June 2.-The most colossal
mercantile failure in the history Of the
United States was recorded today when
the II. b. Clafin Company passed into
the hands of Federal receivers. Assets
are placed at s44. .ooo 900, liabilities at S34,-
ooo. 900. with contingent liabilities that will
increase indebtedness to close to $4,000
ooo
| Twenty-seven stores in New York and
other cities throughout the country are
affected. Many of these will be closed
temporarily pending taking over their af-
fairs by the receivers.
John B. ClafiiR as a result of the fail
ure. resigned the presidency OF the United
Dry Good and Associated Merchants
Companies late this afternoon. Thus,
after seyenty-one years, the association
of the name OF Clahin with the CONNER
cial life OF New York passes into history.
Cornelius n. Bliss was elected by the d.
rectors OF the United Dry Goods and As
ISOLATED Merchants Companies to sue
ceed Mr.. Clahin. and T. B. Atwater was
elected treasurer.
ClaEin to Aid Work.
Immediately following the announce
ment of the receivership. an involuntary
petition In bankruptcy was filed. and 4
ceedings will be fought steadily, notwith-
standing attempts at reorganization, un-
less individual creditors are taken care
OF on a basis that will insure them an
| early cash settlement.
John Clafin, II is announced. will de-
vote his time exclusively TO attempts
at reorganization Of the business Affect
ed and In Strengthening out the affairs
OF the companies involved In the failure.
FaiInuyinO that f0nE p1ar
yesterday afternoon in the Offices Of J.
P. Morgan & Co. at which II was de-
cided that the condition OF the Clafiin
Company did not warrant the New York
banks giving Mr.. Clafiin the amount of
money that would be required to meet
the immediate necessities OF the busi-
ness a conference was held in the Fed
eral Building in the chambers OF Judge
Hand Wednesday night. which continued
from to o'clock. At s o'clock the
papers in 4 suit OF equity were signed.
These were sealed by Judge Hand until
the opening Of court this morning when
they were opened and filed.
Creditors to Meet.
Ten minutes after the suit in equity
had been filed a petition in involuntary
Court. but the equity suit took pre-
cedence.
The equity suit was instituted by John
c. Eames. vice president OF the H. B.
Clafiln Company. who alleges in his petit
tion a claim for S3,6ss for money loaned.
Judge Hand appointed Joseph B. Martin
dale. president OF the Chemical National
Bank. and Frederick JuilIard. Of the A.
l. Juillard Company. receivers with
bonds of S5Oo.O0O. Corbitt and Stern are
counsel for Mr.. Eames. At their ONCE
II was stated that the receivership was
a friendly action TO prevent the precipita-
tion OF petitions in bankruptcy.
Judge Hands order appointing re-
ceivers provides for a general meeting
of creditors at the earliest date pos
sible. at which they are 10 be allowed
TO determine whether the receivershIp
shall be made permanent and TO decide
who the receivers shall be under such
circumstances: whether the receivers
shall be authorized to borrow money:
IL so. how much. and on what terms.
and whether the assets shall be sold
and in what manner.
The judges order also contains a
prohibition against the sheriff. city
marshal. or any other person placing
an attachment on the property of the
Clafiin Company and the Defender
Manufacturing Company. Litigsnts
also are restrained from pressing suits
against the companies named.
The bankruptcy petition was fled by
John T. McGovern, OF Gregg McGov-
ern. This instrument alleges that the
Claim Company is indebted to Albert
s Bergner 10 the extent of S2S,370:
william Worth, of New DoTp. Staten
Island. S3.l31. and John Muller, Of
Brooklyn. S731.