The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-06-23
NEW FIGHT OYER
GREENHUT PLAN
Minority Creditors, Opposing
Reorganization. Demand
Inquiry.
WANT RUMORS SIFTED
Capt. Grccnhut's Examination
Halted by Illness Case
to Go On.

Referee Peter ". Olney decided yes
to-day. In spite of the completion OF
definite plan to reorganize the j. II.
Greenhut Company, to allow search
ing investigation Try the minority credi-
tors of insinuations that the financial az
fairs Of the company had not been prop
erly handled and of charges that pref
rental payments had been madc 10
members of the Groenhut family when
the officer, OF the company knew 1t
was insolvcnt.
These charges. made repeatedly In the
examination Of the officers in the last
month by seldom Bacon ~ counsel to
the minority creditors. organized as the
independent creditors committee aud ut
yesterdays hearing in the Merchants
Association rooms. are embraced in
seventeen page pamphlet. which was
sent out to all the Grecnhut creditors
last night on the heels OF the reorgani-
cation plan submitted by thu majority
mercantile creditors. known as the
creditors protective committee
There have been great many claims
made on behalf Of the minority crcii-
tors" said MIR Olney when Mr.. Bacon
objected t. another postpunement OF
Capt. Grcenhut's examination, which
ought To b. investigated and proved or
withdrawn and the charges set at rest.
I think that now is the time TO do H.
think that some steps ought 10 be taken
against anybody WHO is guilty OF mis-
conduct. ii any misconduct is found"
CaiI Plan Inadequate.
The minority committee IL opposed to
tn. reorganization plan az inadequate.
TIE committee maintains that the
meTChH ndise creditors would not receive
as much as they would get in liquida-
tion. that the proposed new stock in
n new company would be OF little value
and that the proposed plan. which would
give the merchandise creditors l2i, per
cent. In cash and the balance Of their
claims In stock. protects the Greenhuts
in paying more than Si,0o0.00o TO them
selves, while at the same time leaving
the merchandise creditors with unpaid
bills for s2.s51. .0oo.'
AS il stands" SAYS the minority COM
mlttee's pamphlet and ms announced to
Mr Olney by Mr. nacon Yesterday.
leaving out the more difficult claims
there are clear, substantial claims
against the Greenhuts and the Mon
mouth Securities Company controlled
by the Greenhut family for their with
drawal from the funds Of the estate OF
the following sums Ilisted as sum
mary OF assets not turned over to the
trusteesD:
Excess salaries .................. $3.50, 900
Payments under banking indem-
nifty agreements. .....,,....... 500, 900
Preferential payments 70 Mon
mouth Securities Company
from October - to December ,.
Preferential payments on notes
indorsed by j. Is. Grcenhut.... $4,000
Preferential payment Of interest
to Monmouth Securities Com
pany. January /. isi5......... los, 900
Total. OBSERVATION-DISCLOSURES 81. i0s 900
In addition" continues the pamphlet,
"there are the very important though
difficult claims that the stock and bond
issues tsG.O00.000 second mortgage
bonds issued when the J. b. Greenhut
Company was organized late in 1910
the consolidation) were based on over.
valuations; that the stockholders hav
ing put the corporation into the bank
ing business. are under the personal la
hllity imposed on stockholders OF bank
ing corporations. In discharge of al
these claims on which heavy recoveries
would seem clear the Greenhuts nUT
proposed 10 SuDsCElDc Sobu,VNV VI
the proposed first preferred stock Nn
the new company AT par"
THE indorssme of the plan by the
Monmouth Securities Company and the
bondholders' committee" says the
minority report. ''is in reality nothing
bu; the Greenhut interests speaking un-
der these masks. Rather than stand
suit for the millions of dollars OF claims
Of the estate against them, which we
believe should be most vigorously
pressed by the trustees. they will. We
have reason to think. make a far better
offer"
The proposed plan of reorganization.
which drew forth the hurried report OF
the minority creditors, has been agreed
upon by the bondholders committee and
the majority merchandise creditors COM
mittee. holding claims against the ]. Il.
Greenhut Company. IL provides for \
new corpor ton to take over the bus-
ness as a going concern with capital
stock divided into three classes: First
preferred, per cent. cumulative, sec
ond preferred. per cent non-cumulative
and common stock without par value.
Two propositions for settlement of
claims are offered TO the merchandise
creditors. One was i2ia per cent in
stock to be retired out OF the earnings
of the company before any OF the other
first preferred stock, and % per cent. In
second preferred stock and 3. =. per
cent common stock. on a basis Of one
share for each 800.