New-York tribune., 1918-12-03
Mayer Submits
Adjustment Plan
In Aetna Dispute
Federal Judge Proposes
That Deferred Dividends
Reaching IA Per Gent
BE Paid to Shareholders

distinguished array of counsel
representing the conflicting interests
IN the Aetna Explosives Company, Inc,
the bondholdcrs, preferred and common
stockholders appeared 7before Judge
Mayer in the Federal District Court
yesterday for the purpose of discuss
ing the reports Of the three adjust
ment committees which were appointed
TO represent the various interests.
me business Of the concern, which
nas r, been IN the hands of Receivers
benJamin O'Dell and George c. Holt,
mas been SO profitably managed that
after paying debts and claims amount
ing to millions, it now has LIQUID as
@ se.s o: approximately S10,0OO,0OO, it
was SAID. This will be increased by n
oonslaerablc sum by compensation
+'hwa'cs +h maze by the government for
plosives. ioi GA
!, When the receivers arc DISCHARGED
the common stockholders will bave a
WORKING capital Of $4,000 900 after suh-
UracVlhg cash payments amounting in
round numbers to $4,000 900 from tba
mquld assets for the retirement of the
conPany's bonds and preferred stock
Attempts to Arbitrate
because of the variance in the re-
poIts Oh the three adjustment com
hlttees, Judge Mayer, in an effort 10
otinS ABOUT a fair and satisfactorv
settlement, submitted to the lawvers :.
tehtatlve plan in the form of sugqes~
Ions Inc conflicting interests will
rieeI on lhursday to consider these
Wa,'s pIams ana Will report back to Judge
fyrl fnt,,r Tn saturday when date for a
1uture hearing will be set.
AS to the bondholders. JUDGE Mavor
makes the following suggestion. tTo
give 10 the bondholders the ALTERNATIVES
- payment IN cash at 80 or letting the
Donds remain at 100, the princina} ~
pe PAID IN twelve annual instruments
at the rate of 812 per cent Der annum ),
\, VI the preferred stockholders, JUDGE
mayer makes the following suppes-
tons: The deferred dividends aggre-
gate IA per cent. 1t is but just that
part OF the plan should contemplate
payment OF this Ia per cent This
amount has been earned by the re-
celvers and should be paid. The liquid
poss!ble to foresee with accuracy that
the ilqu1d assets of the 4AItna Explo-
sives Company can properly be depleted
10 the extent of paying out at this
time, even at reduced figure, sufi-
clent cash to retire the preferred stock.
AT present the status Of preferred
stock has disadvantages both to the
owners thereof and to the owners of
common stock. The preferred stock
holders have no lien of any kind. On
the other hand a dividend Of 7 per cent
Will be. too large in the future, in view
OF the change that has taken place in
the affairs of the company"
The Sole Object
Continuing, Judge Mayer says: "The
company should be controlled by the
common stock holders, whose sole
business would be to earn dividends. !"
~ would suggest that the deferred
dividends, aggregating IA per cent be
paid to the preferred stockholders.
Then that the preferred stock be con-
verted into first mortgage bonds at
per cent, with a per cent sinking fund
retirement provision.'
If the foregoing suggestions are
adopted Judge Mayer said:
"Then the future of the company de-
pends largely upon the honest and able
business management. 1t will be for
the new management to determine the
policy of the company, which, among
other things, will involve the considera-
zion Of new branches of endeavor. It
is vital therefore that the new board
of directors shall be men of experience
and standing a. to command confidence.
II may add in conclusion that it NAV
be thought desirable that voting trust
be created in respect to the common
G tncko