The New York herald. [volume] (New York, N.Y.) 1920-1924, 1922-10-19
PLAN NEW COMPANY
FOR FOOD PRODUCTS
Reorganization Committee
Makes Public Proposals in
Asking Bond Deposits.

A proposed plan for the reorganization
Of the United States Food Products
Corporation. involving the organization
OF a new company, was announced yes
terday by tho reorganization committee
representing Distillers Securities Cor
poration per cent. bondholders and
United States Food Products Corpora
ton per cent. noteholders. Of which
Arthur W. Loasby is chairman.
Tho reorganization committee now Is
engaged in the work OF perfectins the
proposed plan. the successful consunl-
nation of which Is dependent upon
practically unanimous cooperation ny
the bondholders to be evidenced by the
deposit OF their bonds with the COM
mittee. The majority Of the bonds al
ready have been deposited. but the COM
mittee says II Is necessary that praoti.
cally all tho obligations should be de-
posted at once.
The main features OF the plan are as
follows: A settlement OF the pending
litigation respecting the guaranty by the
Kentucky Distilleries and Warehouse
Company Of the United States Food
Products Corporation bank Indebtedness
Is to be made as soon as final detailed
plan of reorganization is adopted;
new corporation is to be organized
which shall buy in such of the various
properties now held as security for the
Distillers s per cent. bonds and the Z
per cent. notes as the reorganization
committee may decide to be in the in
terest of the new corporation: new
money for reorganization purposes is to
be provided by the issuance by the new
corporation of a guaranteed note issue
secured by a first mortgage on certain
properties owned by the various COM
panies benefited and Jointly guaranteed
by the Kentucky company and ting
Yeast corporation; the new corporation
also shall issue general income secured
bonds in t~o series-Series A to be is
sued In exchange par for par for Dis
tillers' bonds and Series = to he issued
in exchange par for par for the per
cent. secured notes.
II. Hobart Porter, who has been In
close touch with the properties since
March, 1922, has advised the commit
tee that tho results from operations Of
the yeast business, the alcohol business
and the preserves business during the
last several months, in spite of handicaps
arising from the receivership. indicate
that it is advisable to continue opera
tons: that overhead expenses have been
substantially reduced and that trade
conditions have improved materially in
recent months, with consequent i'm
provement in earnings. Prospects for
the whisky business have been much
improved by the enactment of new legis-
lation permitting the concentration of
whisky held in storage, which should
result in decrease in overhead expenses
and permit bottling prior to payment OF
taxes and allow the company to realize
more immediate revenues from bottling
operations.
j. w. Jones, chairman of the bond
holders committee, made the following
statement yesterday: THE definite plan
and agreement has not yet been COM
pleted, but it is expected that, so far as
is practicable. it will contain appropriate
provisions under which the stockholders
of United States Food Products Corpora
ton, by subscribing to guaranteed notes
TO be issued under the plap, may acquire
stock in the new corporation"