The New York herald., 1921-08-28
RECEIVER SOUGHT
|. FOR M7ERDOROUCH,
$3,O00,OOO IN DEBT
American Brake Shoe and
Foundry Company Sues
Over S57,074.90 Bill for
Equipment. 1
TRANSIT PLIGHT CITED
Traction System Unable to
Meet S10.000,000 of Its
Notes on Thursday, Is 4
Statement.
But HEDLEY IS HOPEFUL
New Action Is Fourth Against
Big Lines in City Since B.
r.. T. Was Declared In
solvent in 1918.
BUT HEDLEY IS HOPEFUL

The : merican Brake Shoe and Foun-
dry Company in an equity suit filed
yesterday in the United States Dis
trict Court asked for the appointment
OF a receiver for the InterborouGh
Rapid Transit Company.
The foundry company has a claim
of s57.074.90 against tho traction COM
pany for brake shoes and castings and
sets forth that the Interboroushs
floating Indebtedness for materials.
supplies. equipment and taxes is in ex-
cess of s3,o0O.oo0 The Interborough
company has twenty days in which TO
file an answer.
This is the fourth big New York
traction system to be taken into re-
ceivership proceedings in less than
three years, the others being the
Brooklyn Rapid Transit Company, the
New York Railways Cgrecn lines) and
the Interborough Consolidated Cor
poration, holding company for stock
Of a large number OF traction lines in
New York city The New York Rail-
ways receivership also was the result
OF a claim filed by the American Brake
shoe and Foundry Company
Intcrborougb Hopeful.
I Frank Hedley. president and general
manager OF the Interborough Rapid
Transit Company. made the following
| statement:
This forenoon the American Brake
Shoe and Foundry Company fled
creditors bill In the United states Court
! for the Southern District Of New York
on it's own behalf and on ,ehalf OF all
creditors OF the Interborough RAPID
Transit Company who may join I'm the
suit. asking that a receiver be appointed
in order that all creditors may be treated
alike and that there be no multiplicity
OF actions brought by & litors and note
holders in different courts
"The Interborough Rapid Transit Com
pany has appeared in the suit but IL has
not yet filed an answer or consented 70
the appointment Of . receiver, II has
| twenty days in which 10 answer and dpr-
i ine that time Il IS horcd .hat all ofsits
notes maturing September ne2t viii
Z have been extended for year and that
\ with tie further indulgence of It's gem
craI creditors a rscelyership may yet be
avertcd.
/ IF. however. II shall become necessary
ultimately to have receiver the filing OF
the bill this morning confers Jurisdiction
upon the court, which Is now administers
ing the affairs Of several other traction
companies. 1t is believed this course
will be Of advantage 70 all interests in
vclved. The filing OF this bill does not
change the situation as TO the extension
OF tho three year notes
The three year notes referred TO by
Mr. Hedley are those sold ia September.
1918, to a syndicate headed by J. p.
Morgan & co. The total now outstand-
ing is placed at s3S.i44.o0o. They were
secured convertible per cent. gold
notes, behind which are pledged ssf,24a,-
900 Interborough Rapid Transit COM
pany hrst and refunding mortgage ; per
cent. bonds.
I A fortnight or more ago the Inter-
\ borough company addressed communi-
cation 10 an Of the holders of the notes.
asking that at their maturing on Sep
4 tember / they be extended Tor another
year at per cent. At the office Of the
Morgan firm. through which the negotia-
tions are being conducted, Il was said
no announcement could be made regard
ing the number az favorable responses
\ 10 tho request. Mr. Ifedley's statement,
\ however. indicated that the company be-
lieyod d large majority Of the noteholders
would consent 70 an extension The
plaintiffs bill OF complaint says that
more than one-half Or the principal OF
tho notes has been extended b. agree.
ncnt Of the holders.
Creditors Pressing.
Tho sin II complaint against the
traction company says the floating IN
debtedness of s3,ooo.00o fcr supplies,
materials. taxes, SC. IS overdue and that
the defendant e. unable 10 pay t. II de-
clares that certain creditors ero pressing
for payment. that suits arc threatened.
that executions may be levied on equip
nent and property "a tine traction COM
rany and that there "a grave danger the
defendant may thereby bc deprived oe
the use 81 equipment, rolling stock Sc"
The complaint declares further that
for the benefit Of the public and for the
creditors. Il Is desirable that the opera
ton OF the subway and elevated lines ba
kept intact George NJ Judd. attorney
for the plaintiff. filed tho suit. and the
complaint was attcstcd by clifton u.
Pettls. vice-presidcnt Of the foundry
company.
on several occasions In tho last two
or three years reports have been current
that q receivcrship for tho lnterborough
Rapid Transit Company was imminent.
on each occasion the threatened crisis
was averted. and Il was not until Yes
terday that the corporations difficulties
were tho basis Of 4 complain actually
filed in tire Federal Court. This action, IL
Is understood Is friendly and designed
to protect the company in the matter OF
jurisdiction.
. ~ shs elps Of Ltis scpgisias ths