The Birmingham age-herald., 1922-02-15

SNoN0 iS interested not only as cred itor' but coming before the court with an offer to match dollar for dollar the liabilities of the bankrupt company, suggesting a legitimate so- lution for the alleged financial diff faculties facing the company.
 Opposes Trustee
 The first tilt of the morning ses- sion came when Hugo Black, repre- sentative of a creditor who peti- tioned the court to vacate the order of the federal court in adjudicating the company bankrupt Mir. Black contended that the company was not lin effect bankrupt, and as a repre- sentative of a creditor who has q claim on the company for personal injuries, which case is now pending in civil court, he objected to the ar polntment of Roberts as trustee, although as there were no objections to the qualifications. Judge Edmond Dryer, referee, accepted his nomina- ticn and placed his bond at $50, ,000.
 Following action in accepting the trustee, Mir. Black took up the light of the state headed by Maj Hartwell c. Davis, attorney general. where tkey, with Judge J. J. Mayfield and Ma rion Rushton, assistants, engaged in conference.
 Taking the stand after his ap-
 pOintment as trustee, Mir. Rob
 erts admitted under examinatfo
 that after talking over the mat
 ter of acceptance of trusteeship
 of the company, it was the sub
 stance of conversation with both
 Mir. Nesbitt, receiver, and Mir.
 Lowell, president of the company,
 that the offer of the state would
 not be acceptable, notwithstand-
 ing the fact that the state of-
 ferred to assume all obligations
 of the company and pay the dif-
 ference between the liabilities
 and asNets in cash. The value of
 the company property. he inti- mated, was greater than given in
 the schedule filed with the bank
 rupt court.
 G. A. Thomas, vice president and secretary of the company, was the first witness examined He valued the mechanical equipment of the bankrupt company used in mining oi coal at s27O, 900, which is accord ing to his testimony, the actual value, less depreciation included. His testimony dealt mainly with convict labor and free labor engaged in work at Aldrich mine and the method of mining employed by the company.
 However, he did state that the
 &2z0,OOO value on personal prop-
 erty, located in Shelby county,
 was in excess of that given In
 sworn testimony to the bankrupt
 court in filing the written peti-
 ton which gave the return ms
 800, 900. This was the first decided
 victory scored by the state and
 in reality the legitimate creditors
 of the corporation.
 One statement in his testimony which caused murmur from the state was that the real estate of the com pany was valued at s57 7,0o0 while the personal property listed at the mine amounted to 1000. These figurs ss, he said, were filed with the county tax adjuster and accepted by him as the official set figure given for tax valuation, which he added were only 0u per cent Ol Int Ttdl Ndlut.
 Resuming the hearing after re- cess for lunch Mir. Thomas again took the stand and contradicted his statement of the morning session in placing the value of mining equip ment located at the mine and suo stituted in place of S270,000 $211,- S11OS as a fair valuation. He also said that he had one voting share in the company which was assigned to him by the president, but which had later been transferred to the owner. This was in answer, however. to a statement propounded by state rep resentatives asking if he had ever paid any cash consideration for the stock, to which he answered in the negative.
 Following Mir. Thomas on the
 stand was W. s. Lowell, president.
 His was the most important of
 all testimony heard On exnmina-
 ton he admitted under oath that
 he believed that the assets of the
 company were double the habiI-
 fties and that the company was
 solvent.
 "You say you believe the company solvent?" MT. Black asked. Then, as president of the company, why did YOU permit attorneys for the com pany to file petition asking that 1t be adjudicated a bankrupt"
 "They thought it best was the reply.
 MT. Lovelis memory seemed to be vague on certain questions pro- pounded by Marion Rushton, who di- rected his question with rapid fire and the afternoon session did not make much headway after MT. Sad Ter completed his examination.
 "Please tell the court just when
 the company decided to go into
 bankruptcy" MT. Black asked.
 The question seemed to cause
 hit of anxiety among those pres
 ent.
 "It wnx about the carly part of
 January" the witnesse replied.
 No Suits Threatened
 The witness next told of the visit of Mir. Nesbitt to Montgomery follow ing a conference with William F. Feagin, state warden general, in ref erence to the indebtedness of the company on the convict lease. Here he was interrupted by counsel for the state asking if the state threat ened to sue on their contract. He replied that the state had never threatened to bring suit nor had any other creditor so threatened
 Then why did the company file petition with this court seeking to be adjudicatcd bankrupt" asked Mir. Black, rising to his feet.
 well, our assets were alright Mr. Lowell replied, but we just didn't have the cash money" Here he cx- plained that the banks refused to lard additional rnopey fo fh> roo~ror,,