Norwich bulletin., 1917-05-07
MEETING OF
 AM. REAL ESTATE COMMITTEE.
Henry w. Tibbits Represented Nor
 wich Security Holders.

A meeting of the reorganization com mittee of the American Real Estate company was held at Hartford Fri day There are quite number of holders of these securities in Norwich and vicinity. Henry w. Fibbits at tended the Hartford meeting, repre- senting a number of Norwich invest CTS.
 F. S. Bangs of New York, counsel for the committee, addressed the meet ing and explained the progress made to straighten out the tangled affairs of the big real estate concern which failed about a year ago. Lawrence Mcclure, president of the real estate board of New York and chairman of the committee, was also present.
 MT. Bangs said the reorganization committee did not represent either directly or indirectly the former man agement of the American Real Estate company.
 ''The committee has the very seri- ous responsibility of protecting the in vestment of over 10000 people, most of whom can ill afford to lose the money which they invested in the American Real Estate company" he said. When this concern failed it had outstanding securities and claims amounting to nearly SIS, 500 900; 1t had large realty holdings in New York city, particularly along the line of proposed transit development, which it carried on it's books at $25, 900. 900. Against these properties were mortgages and other liens aggregating $10, 750, ,000.' MT. Bangs said the average holdings of those owning the company's securi- ties was $700 and they were widely scattered, some of them being in Flu rope, which made the labors of the committee difficult.
 The so -eaIled per cent. bonds of the company were not bonds at all, but were really demand notes payable in 60 days" he declared. The com pany failed because large numbers of fhoSa hnndhnldarc TOada 9 G1Iddan de- mand for the redemption of these se- Curities and the company had no cash to meet the situation.
 When the committee first began to study the plan of reorganization it tried to work it out on a basis of g1v- ing to the investors of the company 50 cents on the dollar in a new se- curity and it started out to see whether that amount could be realized without calling upon the bondholders to con- tribute anything. The committee very soon found, however, that it was too optimistic Men who knew real estate values would rot give 15 cents on the dollar for the equities in the property if it were put up at forced sale. The conclusion was accordingly reached that if the property was to be saved it would be necessary bo carry it along until realty conditions were more fa- vorable, and to rely upon the bond holders for new funds. They have accordingly been asked to raise some lHlHS llke Sz,UUUyOUU TOT IAlS purpose
 MT. Bangs said about $500, ,0eo of the above sum had already been sub scribed and the committees plan of re- organization had been approved by holders of bonds,- certificates and un- secured claims deposited with the com mittee amounting to $9,319, ,668.15, rep resenting 85 per cent of the whole amount deposited and 69 per cent of the whole amount of the unsecured in debtedness of the company. The plan had accordingly been declared to be operative provided the additional gunds were forthcoming. MT. Bangs ex- pressed tn eopinion that if 1t were necessary to dispose of the property of the company at forced sale there would be practically nothing left for the bondholders. As an indication of the accuracy of this observation, he cited a sale recently made by the re- ceivers of a large buildings in New York owned by. the company This property brought about $500, 900, which was loss of nearly $4o9,0o0 on it's cost, and after deducting about s47s,- 900 for mortgage indebtedness there was left in net cash, as the actual equity. less than S24 900, which was equivalent to 5.6 per cent. of the equity based upon cost.