New-York tribune., 1921-02-09
Goodyear Financing
Formally Ratified;
$85,OOO,OOO Issue
New Securities Divided Into
Three Groups, Including
BondsandP Preferred Stock
Authorized to Meet Loans

| Holders Of the majority of the com.
mon stock and the largest creditors of
the Goodyear Tire & Rubber Company
have agreed upon plan OF reorgani-
cation which Is intended to take care
of its bank loans, merchandise credi-
tors, and other obligations, the total
of which is placed at s65,9e4, ,2eO, ac-
cording to en- announcement yester~
| day by Robert r. Swainc, Of Cravath
Henderson, Leffingwell & dc GersdorfP,
counsel to the company.
In brief, the plan contem plates the
issuance Of approximately $4,000, 900
first mortgage twenty-year per cent
sinking fund bonds; s25,ooo,00O ten
year per cent sinking fund deben-
lures aud SS6 100000 prior preference
9 per cent stock, making a total of
| $50, 100000 in new securities. The com
pany at present has no bonded debt.
but has outstanding S2o,731. 100 com
mon stock and $40,000,0O0 arst pre-
! ferred
The proposed issue of bonds and
| debentures, Or their proceeds, will be
used to pay OF the company's bank
corporate purposes" General cred;-
tors are asked to accept the prior pref
erence stock for existing debt and in
| part payment for future deliveries of
| materials.
Holders Of existing preferred stock
are offered preferred stock of the reor-
| ganlzed Goodyear corporation having
substantially the same rights and pref
erences as the present preferred
share for share, and holders Of exist
nrr 1rNn
stock, which will probably have no par
value.
The $25,ooo,o0O of new debentures
together with 25O,000 shares of new
| common and the 35,000,OOO of urior
preference stock arc to DO offered for
subscription to existing stockholders.
The company has assurances from
strong banking interests" Mr.. Swaine
announced, (which it believes Justify
the expectation that if the necessary
assents of creditors and stockholders
are Forthcoming the bonds and deben-
lures can be underwritten and the
plan conSummated.
The negotiations leading up to the
plan have developed spirit Of CO.
operation by all parties in interest to
preserve the valuable good will which
the company has built up through the
excellence of its product and the eff
IL.
believed that if assented to By the
creditors with substantial unanimity
and by the requisite proportion of the
stockholders, the plan will not only
save the company from its present en-
barrassment, to the advantage of its
creditors as well as itself, but will
also put it upon sound financial
basis for future operations"
The plan virtuallyplaces the control
If the r0TI1DoDu
uture in the hands Of the merchandise
creditors through the creation of a
voting trust or management stock
- the merchandise creditors may elect
The management stock, if issued, shall
oe entitled so long as the first mort
cage bonds or debentures are outstand-
lng, to the exclusive voting power for
the election of at least majority Of
the directors. In case a voting trust
is created the voting trustee is to be
designated by the merchandise credi-
tors committee
1t is proposed that the reorganiza-
ton plan shall be carried out under
| the supervision of the merchandise
creditors committee, bank creditors
committee, preferred stockholders
committee and common stockholders
committee. The bank creditors com
mlttee consists Of Robert G. Schaffner.
Chicago; John Sherewin, Cleveland
and Ralph Van Vechten, Chicago.
The merchandise creditors committee
Is composed Of w. E. Pruyn, New York;
j. l.. Jenckes, Providence; Myron C.
Taylor, New York. Tho preferred stock
holders committee consists of George
" Grouse, Akron; Reamy E. Field,
Cincinnati; Charles A. Morris, A. F..
scoville, Cleveland, and j. Herndon
Smith, st. Louis. Common stockhold-
ers are represented by Fred S. Borton
Cleveland; C. r. Erwin, Chicago; Z. E.
Mack, Canton; Russell i. Robinson,
Akron, and F. A. Seiberling, president
Of the Goodyear company.
In addition to the bank debt the COM
pany's other obligations are listed as
follows: Merchandise debt, $11 ,3O5, ,1O4;
discounted bills receivable, $1970 900;
other secured notes payable, $467,83O;
taxes partially in dispute, S4,3S7 ,026;
preferred stock subscriptions of en-
ployees TO be refunded, $318,701; other
miscellaneous indebtedness, $413,573;
other contingent obligations (esti-
mated), s2,120,558.
Present commitments for future de-
'iveries Of merchandise on which speci-
fcstions and prices have been fixed
how a total OF S54,3os,o0S, wnrch in
c!udes $7,200,740 for rubber, $6,664, 900
for cotton, Sal, ,879,763 for fabric and
$215,000 for other materials.
The company's estimate Of deprecia-
ton of materials covered by commit
ments, not previously written off, was
$18,247 900.