The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1915-10-12
Foreclosure and Receiver
Asked For Hilo Railroad
Suit Under 1909 Mortgage Begun
In Hio--Bishop Trust Company
Is Named as Applicant :

Proceedings for the foreclosure Of
the 1909 mortgage given by the ,Hilo
Railroad Company to the Bishop Trust
Company as trustees Of the bondholders,
have been begun in Hilo. z7at y :
"A bill in equety for the foregoing
purpose was filed in the Circuit Court Of
Hilo on Wednesday last, October Z.
The bill Is filed in the name of the
Bishop Trust Company, Limited, trus.
tee and names the Hilo Railroad Com.
pany aud the First American Savings
and Trust Company Of Hawaii as res.
pondents. .ia. .... T..
The bill is entitled "Bill for fore.
closure of mortgage and the appoint
ment Of receiver g.
The bill alleges that the bond in.
terest is overdue and that tne Railroad
company is unable to pay it.
Foreclosure Asked
The general prayer of the bill asks
that the court order the foreclosure Of
the mortgage in question and the sale Of
the property, the proceeds to be dev0t-
ed to payment pro rata of the bonds
to the amount Of $3,500,000 secured
by the 1909 mortgage.
Special prayers are that a receiver
he appointed TO take possession of the
property and carry the same on pend.
ing foreclosure proceedings.
Also that preliminary injunction
Issue prohibiting the railroad company
from selling or disposing Of any Of its
property pending this litigation.
Order Is Issued
An order was issued by Judge Par.
sons on the same day the petition was
fled, October 7, granting the issuance
of the injunction and setting Friday
next, October Is, as the day for hear.
ing the question of whether a receiver
should be appointed or not.
The First American Saving and Trust
Company is made a defendant in the
case because that company is the trustee
under another mortgage for one million
dollars, dated 1901.
The First American Savings and
Trust Company has signifed its inten
tions to resign its position as trustee
under the 1901 mortgage; the reason
for such action being, it is understood
that IL Is a large owner of bonds OF
the 1909 issue. Who will be appointed
trustee in place of the First American
is not yet decided. The trustee will
be selected by. q ma ority vote of the
1901 bondholders., 1t is Tumored that
. the First Trust Company of Hilo may
be made the, trustee.
Simultaneous Foreclosure
Under, the "bondholders protective
- kaiI o.. ,oh hat
heretofore published, the proposition
is that the 1901 trust mortgage shall
be foreclosed at the same time as the
mortgage Of 1909, the railroad being
sold as whole. A considerable ma ior,
ity Of the bondholders of both the 1901
and the 1909 mortgages have already
signed this agreement.
Under these circumstances, the nor,
NAL thing to expect is that the 1901
trustee will consent to the foreclosure
proposition of the 1909 bondholders, and
will ask that the 1901 mortgage be
foreclosed at the same time.
A. A. Wilder appears as attorney
for the petitioner, in the suit now pend
ing.
Holmes abb Olsen are attorneys fol-
the joint bondholders committee; but dc
not, as yet. appear as attorneys OF
record in this litigation.
Frear Drafting Reply
w. +. Frear is the attorney of the
HilO Railroad Company and will pre-
pare the returns of the company on
the order to show cause on Friday next
why receiver shall not be appointed
He will also prepare the answer of the
company to the bill in general, which
must be fled in ten days.
1t is understood that the company
will not object to the appointment Of a
receiver. T@ =
Attitude Not Announced
o. Just what attitude the company will
take in its answer, on the main issue,
is not yet known,
1t has been intimated by the bond.
holders committee that some agreement
with the present stockholders and the
unsecured creditors of the Hilo Rail,
road Company will be made by the
bond holders, under which the claims
of such stockholders and creditors will
be considered in the formation of u
new company which may buy in the
property Of the Hilo Railroad Company
upon the mortgage foreclosure above
referred to.
'Gonfmittees representing the secured
rTailIbors and the stockholders of the
company, respectfully, have been ap,
pointed. These committees will doubt
less some. to an understa uding with the
bOndhOllers committee at an early date
So far Ia now known, there does not
seem to be any, reason why an equatR,
bile understanding should be arrived at
between these committees.
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