New-York tribune., 1922-04-01

chances under receivership if the
Manhattan people do not reduce the
rental.
By Monday or Tuesday of next week
President Hedley and James l.. Ouack-
enbush, counsel, expect to work through
an agreement with the Manhattan
stockholders committee, represented by
Alvin W. Krech and George Wellwood
Murray. which will "step down" the
rental. but the Manhattan people are
meeting with unexpected difficulties in
rounding up the more than 1000 )ck-
holders.
Manhattan stockholder conversant
with the affairs Of his company said
last night:
"No matter what majority of the
stockholders may wish to do with ref
erence to modifying the marlborough
lease, we are faced with Tremendous
obstacle in the fact that every stock
holder is law unto himself. Mr.
krech's committee represents perhaps
60 to IS per cent Of the more than 1000
stockholders. At least two thirds Of
the stock IS necessary to sanction a
modification Of the lease. If third or
less than a third of the stockholders
refuse to come into any new agree
rnent, they have an actionable case
against the 1nterborough and can begin
a foreclosure suit in any court of rec
ord. They might not be able to per-
suade the Federal Judge to appoint a
receiver, but they can make it difficult
for any one to make much progress in
mod flying the per cent rental.
"1he contract between the Inter
borough and the Manhattan was drawn
by the late Julian T. Davies, and he
made the tsrms very strong, so that
they amount to giving to every indi-
vidual stockholder q binding contract
therefore purely an advisory body, be-
ing without power to enforce its deci-
sions. 1t doubtless can influence SC
per cent Of the stockholders, but this
leaves potential minority in posi-
tion to demand the carrying out of the
lease.
"The Manhattan stockholders have
not been in position at any time to as
sure the Interborough that there will
be a modification Of the lease. 1t has
not been able at any time to do more
than to say that it will consider any
thing the 1nterborough has to offer. 1t
is not true that the Manhattan is in
the attitude of demanding it's pound of
Hecii. II Is tOtl1IOuteu WIN II rigorous
condition over which it has no real
control.
"If an objecting Manhattan stock
holder should begin an action against
us to recover the amount of his de-
ferred dividends, and came around for
his money, we would have to tell him
that we had no money. After that he
could resort to proceeding for re-
ceivership, but he would fetch up
where the American Brake Shoe and
Foundry Company and Mr.. Venner
have brought up
Outsiders say that in the nature of
things the main business of the Krech
committee for the ensuing three or
stockholders opposed to modifying the
Interborough lease that if they don't
come in the company will be forced
into receivership. which would mean
dissolution of the company, and in
such case the Manhattan stockholders
would have to take what was left,
which would leave them worse off than
II they assented to a sharp reduction of
the rental,
Another phase of the situation is
that, while the Interborough is in de-
| fault, technically, only to the extent of
the quarterly rental due on January l
iast. the frst quarterly rental of 1922
is also due to-day, and the company for
It's default on the earlier quarters
rental is subject to action for both
quarters, The ninety-day payment op-
tlon which the Interborough enjoys
Under its contract would operate to
save the company from dispossession
until the full period elapsed, but stock
holders actions might lie, regardless
Prior to the payment of 1881. .16O. au-
thorlzed yesterday for the semi annual
interest due on the Manhattan Com
pany's bonds, the Interborough owed
the Manhattan two quarterly rentals of
Sl'0oo,o00 each--one ninety days over
due and the other due at the close of
the business day yesterday (but with a
nl1ety- day payment option), and also
some $3,400,000 additional for interest
or bonds and for taxes in arrears, The
rental. according to the lease. is com
puted at Z per cent on the capitalize
tion If $6o,0O0,0oo
II IS understood that the negotiations
under way between the Interborough
and she Manhattan have hinged la argely
urtn q proposed reduction of this I
per cent guarantee to something like
AZ or 5 per cent. The Interborough's 8
total obligations due to-day are about
100000, and it has about $4,000, 900
with which to meet them.
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