The New York herald., 1922-08-01
RYANRECEIVER FAILS
TO HALT STUTZ SALE
Creditor Banks Expect to
Buy Shares at Auction
Tomorrow.
INTEREST In PRICE
Judge A. N. Hand Refuses
to Upset Agreement AL
ready Terminated.
DOCUMENT NOT IN FORCE
Ryan's Petition Amended to
Say Allan A. Ryan & Co.
Has $500 Assets.
DOCUMENT NOT In FORCE

AiicH "A. Ryan SlutZ SIOck, winch
he cornered in 1920. bringing about his
own expulsion from the New York
Stock Exchange. and. in the judgment
of the financial district, preparing the
way for his own bankruptcy, will be
sold at public auction at IA vesey
street tomorrow and will be bought
in by the banks that have been hold
ing it as collateral for loans made to
Ryan.
Judge Augustus N. Hand, in Federal
Court yesterday, denied the motion Of
Col. Francis G. Caffey, receiver of the
Ryan estate. to stay the sale.
Collateral valued at approximately
$14000,000 is involved in the decision
of Judge Hand OF Stutz stock there
are about 125,O00 shares. What these
are worth is pro3lematical. At the
close of the Ryan corner episode the
price agreed on was 1851 share. 1t
has sold since as low as $11.
The balance sheet of the company
which will probably pass to the con-
troll of the group of banks that lent
Ryan money-shows a worth approxi-
mating $27 share. The stock was
ruled off the Stock Exchange, and
such dealing as there has been in it
has been on the Curb.
That the banks will buy in the stock
was charged directly by David Miller,
attorney for Col. Caffey, in requesting
an Injunction. Allen Wardell, represent
ing the Guaranty Trust Company, the
principal holder of Stutz stock and prn-
cipal party in the trust agreement be-
tween the banks and Ryan, contended
that the banks should not be obliged to
wait TO realize on collateral pledged for
loans made in cash.
Aren't the banks going to buy the
stock in themselves demanded Miller
'Of course they are replied Ward
well.
Trust Agreement Attacked.
The Guaranty lawyer went on 10 say
that the loans the trust company had
made to Ryan totaled 1886. 900 and
that the sale OF the Stutz stock at SO
would not bring that amount. The other
collateral. he said. would bring about
100000. The Guaranty has about
llt000 shares of the stock
Tho whole argument centered on the
trust agreement made between the Guar
anty, the Chase National and other
banks with Ryan. his partner, Kenneth
r. Howard, and Alvin Untermyer, trustee
FOR Ryan. This was entered into in
December. 1920. and was to run for
eighteen months. during which the col
lateral was to be held by the banks.
Certain specified obligations of Ryan
were TO be liquidated and certain addi-
tional loans were to be made to him,
which old loans We're to be extended for
the term of the agreement
Mr.. Miller's chief argument was that
the agreement was null. void and fraudu-
lent, inasmuch as II was I'm reality an
assignment OF all the property OF the
debtor for the benefit OF limited num-
her OF creditors. leaving out OF considcra-
tion other creditors. IL
Mr.. Wardwell and Eden Bisbee, APP
pearing for the Chase National Bank.
pointed out that the agreement was not
10 be considered anyway. inasmuch as
II had been terminated in accordance
with its own terms on July s. While Il
provided that on the termination the
holders OF the collateral should dispose
OF II as they saw fit, repay themselves
for loans and expenses and then turn
back to Ryan what surplus might re-
main. the agreement could not be
brought into consideration until there
was "A surplus. None of the lawyers ap-
pearcd to believe there was any possi-
bility OF there being a surplus.
The lawyers for the banks contended
that the agreement being terminated
they fell back on the collateral trust
notes. The immediate security for all OF
the loans. and that under the terms OF
these notes. one OF which stood for
every one OF the loans. they urquestion-
ably were entitled 70 sell the collateral.
At one point Mr.. wardwell said:
Practically ell OF the creditors in
some mann er Of other. come under this
agreement Including Mr.. Schwab and
Mr.. Whitrey. They were given certi-
fcates OF participation In any surplus
there mtght be- What threw Ryan into
bankruptcy was that he wasn't able to
pay his current debts incurred from
time to time since the agreement
Under the agreement he was given
S150,000, as a loan, In addition to the
amount that had already been ad-
vanced TO him."
Receiver Not In Possession.
MIR. Bisbee said at one time:
There is nothing whatever to show.
~ Mr.. Miller contends, that Ryan was
stripped OF everything he had by this
agreement. Actually. the purpose of
the agreement was 10 give Ryan and
Ryan & Co. an opportunity to relieve
themselves OF a situation that was
pressing on them heavily II seems a
travesty OF fate that those who stood
by Ryan at that time should now be
charged with something unfair. or in
equitable or wrong"
Judge Hand asked all the lawyers n
great many questions and finally
pointed out that some OF the authorities
quoted by Mr.. Miller did not apply
Were the receiver In possession OF the
property In question and there existed
possibility OF sale. free and clear, he
might have granted the injunction. In
asmuch as this was not the case he de-
MED II. At the same time he told Mr..
Miller that he had simply done his duty
in trying TO preserve for the unsecured
creditors as much OF the estate as
possible.
An amendment to Ryan's voluntary
petition In bankruptcy setting forth that
Allan a. Ryan & Co. has tnpledged
ASSETS OF $500: that the firm, as well az
Ryan individually Is insoivent, and that
the same Is true of his partner. Howard.
was filed in Federal court.
pRtcEs realized on Swift 4 Company sales
on carcass beef IN New York CITY for week