South Bend news-times. (South Bend, Ind.) 1913-1938, 1921-05-27
JOHNSON MOTOR co.
GETS COURT ORDER
TO SELL PROPERTY
Destiny of Local Corporation
Decided by Superior
Court Jurist.

The petition Of the Johnson Motor
Wheel Co., asking for a right of
sale to a recognized company. was
granted by Judge Chester Montgom-
cry in superior court No. l, on
Thursday afternoon.
The creditors committee as repre-
scented by + II. wellington. South
Bend Watch Co. r. s. Caldwell,
Fisk Rubber Co, Chicopee Falls.
Mass. and L. NJ. Hammerschmidt
South Bend, is the opponent Of the
sale in the belief that the reorgan-
lied company intends to purchase
the assets of the corporation with
out beneftting the creditors, IL was
set forth.
The Union Trust CO. was named
receiver for the corporation when
proceedings were first brought into
court. According to Mr.. Hammer
schmidt so much PRESSURE was
brought TO bear upon the receiver
by local stockholders that the COM
pany Immediately rendered their
resignation.
According to Mr. Hammerschmidt
the creditors position in the matter
was that they were led TO believe
that an arrangement could be per-
fected whereby the company could
pay 10 cents on the dollar 10 the
creditors and give notes for the bal
ance payable in one year in four
installments This agreement had
been practically decided upon until
a week ago, the South Bend attorney
explained. when. a hitch came in
the program.
History Of Receivership.
The history Of the receivership
dates back to Dec last when state
ments were submitted to stockhold-
ers and creditors showing the pre-
seriousness of the company's pres
ent financial situation. Many PLANS
had been suggested for keeping the
institution out of the receivers
hands in the belief that a reorgan-
ization could be effected and the
concern continue to do business and
make up its alleged insolvency
These plans miscarried and on
Feb. 10 the receiver was named.
Then came the rendered resigna-
ton OF the bank as receiver and
Wellington was suggested as sue
cessor. This did not meet with
favor on the part Of attorneys rep
resenting the creditor who had APP
piled for the receivership. Mr..
| Hammerschmidt explained. and the
bank as receiver merely marked
( time.
After that came the proposition
1 to reorganize the company and pay
10 cents on the dollar with notes
20 satisfy the creditors claims and
/ also 10 levy a $40 assessment on
stockholders 10 take care Of cur
! rent emergencies. with new COM
pany to take over the firm.
One of the large stockholders.
/ Rathburn, Grout and Heller, Chi
cago. had built up a successful John
/ son Motor Dyke shop in Chicago
for the distribution Of the Johnson
motor wheels in that territory.
The reorganized company. how
ever. proposed To enter into an eX-
| elusive sales contract with Edwards
/ & Crist which would eliminate al
! other distributing contracts.
Rathburn. Grant and Heller. In
order to prevent elimination as dis
: tributing agent brought suit against
| the Johnson company in Chicago
and then formed a new company
I 20 take over the assets Of the John
son company This distributor de-
/ clined TO proceed with the arrange
| ments heretofore worked out where
/ by a ssessm ents were 10 be levied on
/ stockholders and volunteered 70
! form a new company which should
| purchase the assets, letting the
| creditors take what remained out
Of the sale In that manner he
he would still be a distributor for
/ the cycles.