The New York herald., 1921-02-09
GOODYEAR PLAN Is
FINALLY SETTLED
Interests Agree to Scheme Of
Readjustment Of Debt and
disqualification.

Robert T. Swaine of Cravath, Hender-
son. Leffingwell & De Gersdorff. counsel
to the Goodyear. Tire and Rubber Com
pany announced yesterday that a plan
for the readjustment of the. debt and
recapltaiization of the company had
been agreed to after several weeks Of
negotiation between the company, its
stockholders and its banking and mer-
chandise creditors. The only issuance
OF securities for sale TO the investor con-
templatedf is $25.000.000 of first mort
gage twenty year per cent. sinking
fund bonds. but that financing will not
be undertaken until the junior situation
be cleared up.
The plan, as agreed to-. is a sort OF
when, as and il issue affair, although 1t
has been assented to by the bankers, the
largest creditors and the holders of a
majority Of the company's common
stock. Holders of the existing common
and preferred stock will receive like
amounts of stock in the reorganized
company, except that the shares will be
changed to no par value for the purpose
of wiping out the existing deficit and of
funding 20 per cent. of the company 5
liabilities on merchandise commitments.
on which specifications and prices have
been fixed. Then the company will be
recapitalized by the issuance Of the fol-
lowing additional securities: Twenty
five million dollars of first mortga &c
bonds, $25, 900, 900 of ten year per cent.
sinking fund debentures. $35.0O0.00 OF
s per cent. preference stock, SOS. 90
of Z per cent. preferred stock, and 900.-
900 shares of common stock of no par
value.
The bank creditors committee will try
to effect the sale Of S25.000,000 of de-
benturcs, $4,000. 900 Of prior preference
stock and 256,000 shares Of common
stock to present holders of the COM
pany's stock Cash realized by the COM
pany from that sale will be applied
toward the payment of it's bank debt
and to provide it with new working
capital.
Control of the company is to be taken
out OF the hands of the present manage
ment by provisions satisfactory to its
merchandise creditors committee for
the future election of directors, by crea-
ton OF voting trust, or by creation
OF a class of management stock vested
in five persons designated by the mer-
Fchanfiise creditors committee.
Before the plan can be declared op-
erative it must be approved by the COM
panyS stockholders in meeting to be
held shortly, and the stocks which are
to go to the merchandise and contingent
creditors must be exchanged for the
debt by negotiation with every creditor.
Steps taken denote cooperative progress,
but 1t is recognized that it will be sew
eral weeks before the plan be consum-
mated.
The plan will be carried out under
the supervision OF a bank creditors
committee. composed of Robert G.
Schaffner. Chicago; John Sherwin.
Cleveland. and Ralph Van vechten. Chi
cago a merchandise creditors commit
tee, composed of W. z. Bruyn. New
York: f. l.. Jenckes. Providence: Myron
c. Taylor, New York; preferred stock
holders committee, composed of George
w. Grouse, Akron; Reamy L. Field.
Cincinnati; Charles a. Norris. Cleve-
land I; A. ii. Scoville, Cleveland, and j.
Herndon Smith, st. Louis, and a COM
mon stockholders committee. composed
of Fred S. Borton. Cleveland G. r.
Erwin. Chicago: r. Il. Mack. Canton
Russell l.. Robinson, Akron, and L. A.
Soldering, Akron.