New-York tribune., 1922-05-23
"here l.. r. T. Holders Stand

l. H. l. Holders Stand
horouSh'l,r, an p holder Of som. Inter
yer cent bonds which never have 49, 80 q
rVsIted, In Yesterdays mail ! rars,,!a1
'i,N oohdholdcrs' protective commit
tho plans soHF Of r. sga, q, doonent expla ming
an s"curtties of the Interborourh ~, suee'
polttan Cnmpan,. '' - u N'lVo
ma am am, sotI9 though that cannot clearly
nnoerS'and lust what is offered To thn roi
.tIeral trust bondholders. and woU,d an-
si,h "h explanation from YOU on ,he
cu'3eCt recognize that therc are two
'Pllpns given the bondholders:
tal or purchasing Is per cent Of ,he
~ ~ pal amount of their bonds
90 CO. or sprrendering so per cent or their
oonds To an Underwriting svndicate
WIN you tell mo
on What bondholders Will lose IN ,he
reeorganization If they do not assent t., the
80 90 Arc the AZ per cent bonds to be
f",iled by the new issue of the per cent
go Am I correct in assuming that the
interest on these bonds is paid from earn
lnEA Of tho ln'erhorouEh stock If This
ISSu'np'loh rs correct. where do the bond
n"IderS come off III view of the stateme nj
lha 10 dividends arc TO he paid on the
lnterhorough stock until 19253
Nnat advantage Will there he in
they are to carry no interest nntil 1q25?
'D II ! hold ton 1nterborough bonds
ana surrender so per cent. or six Of them
~ 'f'' hhI'I NllllHE SNnNlCdfe, what
}nunefatlon VIII be received for these six
would greatly appreciate it II you
would an-Wer the above questions and
give any general information on tie sub
lect that YOU may have on hama. as It
affects tho 90 per cent collateral trust
corporation. 1t seems to me that you will
he doing service TO mo personally and to
. great many other Of your readers
Answer--Owing TO mechanical
error this question was only partially
treated Ill the investment columns yes
terday, and we repeat it here because
OF the widespread interest in this sub
ject If holders of lnterborough VI ct
ropolitan 412s do not assent to the plan
they lose every chance of sharing in
the prospective recovery of the Inter
borough system. The Intcrborough
Rapid Transit stock will be sold, to-
gether with other assets of the Inter
borough Consolidated, and dissenting
bondholders will receive only a pro
rata share OF the proceeds of such
sale. The stock is now selling around
80 and the other assets have an esti-
mated value Of $50 to $50 per 81 900
bond
Your second question is not alto
eether clear If you wish to know
~ !it 'i.'l tIlN ne 90 ne II tiicl tut
Of the proceeds ol the sale of new per
cent bonds the answer is negative.
When the trust agreement under which
the Interborough stock is pledged to
secure the 4125 is foreclosed the bonds
will practically cease to exist. The
holder of ten of TIE a 4 per cent bonds,
Tor Instance, will realize a return COM
men&Uratc with his action on the com
panN's proposal. Thus, if such holder
should elect TO purchase the new per
cent notes, he would buy 81 500 Of notes
at par and would receive $1,000 par
value of lnterborough Rapid Transit
stock
II, on the other hand, he should de-
eide to participate in tho plan but
should not choose to purchase s Per
cent notes he would receive $1,000 nar
value Of Intelb0rough stock. This an
sWor5 your fifth question as we'll. You
VIII receive no remuneration for the
GO pcr cent Of bonds surrendered in the
event that YOU do not subscribe to G
per cent notes. The surrender Of THAI
GO per cent is in the nature of an as
scsSment.
Questions Nos. and come under a
common head and call for one answer
We assume that you want to know
NhHtACi tHc l'IlSit tFC OH lNc y per cent
notes is TO be paid from earnings on
lnterborough stock The per cent
notes arc to be debenturc obligation
of the lnterborough Rapid Transit
Company, the interest to be paid out
OF earnings 1t may interest you and
all others who are contemplating the
purchase of the 6 per cent notes to
know that the plan Of rcadiustment
calls FOR the payment Of interest on
these notes and all other funded debt
Obligations before any dividends can be
paid on the Manhattan Railway stock.
Holders Of lnterborough Rapid Tran
SIT stock. if they wish to preserve
their stock, must subscribe 10 the new
= per cent notes to the extent of SO
per cent OF the par value of their
stock. If they do not subscribe TO the
notes they must surrender SO per cent
of the!r stock to the syndicate. Own
crs of Az per cent bonds which have
been deposited must state on or before
June Ii whether they wish to purcha Sc
6 per cent bonds. Otherwise it will
be taken for granted that they prefer