The New York herald., 1922-07-06
August Belmont, Cornelius
Vanderbilt and Plant Estate
Principally Involved.
S35,OOO,OO0 WAS PLEDGED
Foreclosure Follows Plan of
Readjustment Proposed by
Judge Mayer.

AS a result of a decree issued by
Judge julius M. Mayer of the United
States District Court ordering the
foreclosure sale of large block Of
the s35,000000 capital stock Of the
Interborough Rapid Transit Company
the proposed readjustment of the
financial affairs Of that corporation.
as outlined last May by Judge Mayer
and the interests concerned. will be
advanced through the passing of the
common stock into the actual posses
sion Of the owners of the companys
Az per cent. collateral trust bonds.
The transaction will in no way change
the control Of the Interporough company
or its policies. II Is expected that the
stock when sold will be simply absorbed
through their protective committee by
the holders of the greater part of the
s7o.00o,ooo gold ~ per cent. bonds.
Three Of the largest OF these bond holders
are August Belmont. Cornelius Wander
bilt and the estate Of Morton Plant,
which for years have been and still are
potent factors In Interborough finance
and management.
More than 80 per cent of the $685.
100000 stock issue was pledged as secu-
rty for the bonds at ratio OF i to g.
Since the Interborough Consolidated
Corporation. the holding concern, went
into bankruptcy, in October. 1918, no in
terest has been paid upon these bonds
and the arrears of interest on April
amounted to s11.362.157. The bond
holders. represented by protective COM
mittee at the head of which is Grayson
M. II. p. Murphy and also by James
K Sheffield. trustee In bankruptcy for
the Interborough Consolidated, demanded
the foreclosure sale of the stock now in
the hands of the holding corporation.
The number of shares to be sold Is fixed
In the decree at 359,12S
Judge Mayer ordered the sale upon
the petition Of the Empire Trust Com
pany. 1t succeeded the old Windsor
Trust Company. in whose hands the S70.-
100000 bonds we're placed. as trustee.
under a trust agreement executed May
o. 1915. In papers accompanying the
court decree, made public yesterday. the
bonded Indebtedness of the Consolidated
Corporation is placed at $50, $500, and
the accrued and unpaid interest to April
! Is given as S11.362.157. The court also
holds that bonds to the amount OF
s4,017.000 OF the old Interborough- Met
ropolitan Company. which was sue
cceded by the Interborough Consolidated
and which bonds Mr.. Sheffield obtained
when he took over the assets of the lat
ter bankrupt concern, have no lien on
any property of the bankrupt and must
be surrendered to the Empire Trust
Company to be cancelled.
Under the provisions of the bank
ruptcy statutes Judge Mayer will appoint
three appraisers, who will value the Sc
cur.ies to be sold, their appraisal prob
ably becoming an upset" price at the
sale. which Is to take place on August
1 in room 401 of the Federal Building.
The decree directs that the value OF the
stock shares shall be determined by con-
verting them into cash: tina: the stock
must be sold In one block: that Mr..
Sheffield. as bankruptcy trustee. shall
&C. as a special master In conducting the
sale. and that bidding shall be condi-
tional upon the deposit of a certified
check for $4,000 drawn on a bank or
trust company having a cash surplus OF
not less than 100000, to be approved
By the court.
Should the sale Of the stock yield a
sum In excess OF that needed to liqui-
date the interest arrears. It Is expected
the surplus will be applied toward the
retirement OF the bonds.