New-York tribune., 1922-12-04
Shares May Face
$40 Assessment
Status of 6O,O0O.OOO in
Defaulted Debt Is Only
Item Yet To Be Arranged

The Brooklyn Rapid Transit Com
pany receivership will come TO an end.
IL was stated yesterday upon good
authority, before January /. Arrange
ments for the termination Of the re-
ceivership, which will include plans
for the reorganization Of the property.
are expected to DO completed at the
series Of conferences now going on be-
tween repr sentatives Of the note
holders' committee and the eommittes
Of the stockholders.
The reeeivershlp has been In force
since December 81. 1918. when Federai
Court Judge Julius NJ. Mayer appointed
Lindley M. Garrison. former Secretary
OF War and a member Of the law Arm
Of Hornblower. Miller, Garrison &
Potter. as receiver. This was two
months after the disastrous wreck in
the Mslbone Street tunnel Of the
Brighton line on November 1, 1918.
that cost the lives Of ninety-two per-
sons and carried the transit line into
damage suits running into the millions.
In the present conferences looking
to the end Of this receivership and the
reorganization Of the entire B. r. 7.
system the stockholders' committee Is
represented by Alfred E. Nudge. OF
Rushmore, Stern & Bisbee, with Rob
ort p. Swaine, OF Cravath, Henderson,
/ Leffngwell g. De Gersdorif represent
/ ing Kuhn, Loeb & Co.. Kidder Peabody
4 Co.. and the noteholders.
Status of Notes still Pending
The important point now AZ issue In
/ the negotiations between the stock
holders and the note holders, IL was
reported yesterday, is the terms upon
which approximately S60,000,000 in
notes, which have been in default since
1919, are to be cared for in the reor-
ganization plans.
Although no information as 20 the
definite terms upon which the reorgan-
ization would DO based could be OBJ
talned yesterday, IL was understood
that an assessment upon the stock
holders from $40 share upward Is
now under consideration. Il was
stated that there was no justification
for any statement on this point At the
present time, as no agreement had
been reached, but that some such ar
rangement is now under consideration
was not denied by those In close touch
with the situation. The conferences
we're proceeding smoothly, IL WAS said,
but beyond the expectation, that the
receivership would be terminated be-
fore the first Of next year, no one felt
authorized 10 speak.
Damage Claims Must Be Settled
Elsewhere II was said that the pros
poets for the termination OF the re-
ceivership upon the adoption Of a
satisfactory plan Of reorganization had
had much 70 do with the upward trend
Of B. r. T. stock in the market within
tho past week. The rise began with
the stock quoted at 1875. On Saturday
Il closed at 1914. The explanation Of
the rise, In advance OF any announce
ment Of a definite time for the termi-
nation Of the reeeivership, was that
rumors were going forth that the con-
ference committees were approaching
an agreement and that fairly reliable
information as to the terms was cir
culatinR In we'll informed quarters.
ANY plans for liquidating the re-
ceivership must include the settlement
OF the damage claims arising out Of
the Malbone Street wreck, the pro-
vision OF funds for cars and equipment,
and any other moneys that may be
necessary to put the system on sound
financial basis. Estimates as 10 the
size of the levy on the stockholders,
should one be made, run as high as S2b
share.
That the system has made steady
gain under Mr.. Garrison's receivershir
ish shown by the reports Issued from
time to time during the year. On May
4 last the Transit Commission an
nounced that for the ninth months
ending In aMreh, 1922, there was a net
income of S2,012,04l, as compared with
a deficit Of S5,3s6,34G for the same
period in the prece1in gyear. In July
of this year the B. r. T. issued finan-
cial statement that showed net In
come for twelve months Of S3,OS7,-
0is.7s. This gain has been continued.
Mr.. Garrison refused 60 comment on
the liquidation and assessment re-
ports yesterday, saying that these were
matters upon which the stockholders'
and noteholders' committees alone
could speak.