Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-20
Hotel Corporation Counsel
Say March | Interest
Cannot Be Paid.
TWO COURSES OPEN
TO HOLDERS OF BONDS
Foreclosure or Reorganization Of
Unit Possible, With Latter Meth.
cd Held Most Favorable.

Collapse of the elaborate financial
operation of 10 Wardman-built prop
critics in Washington, which was fol-
lowed by the floating of a s16,o00,000
bond issue, was foreseen today with the
announcement that the owning cor
porations would not be able to meet
an interest payment due March /.
Sharp criticism of alleged inflated APP
praisals Of some of the 10 properties
in connection with the excessive" bond
issue were made recently before the
Blaine Subcommittee Of the Senate In
vestigating real estate conditions here.
Counsel for the Hotels Management
and Securities Corporation, which con-
trolls the stock Of the owning corpora
tons, said it would be impossible to
meet the interest payment coming due.
Two Courses Open.
This will leave open two courses of
action-one of foreclosure on the prop
critics and appointment OF a receiver,
and the other a voluntary corporate
reorganization. 1t was hoped that a
sufficient number of bonds would be
placed on deposit with protective COM
mittees recently formed in New York
to make possible the voluntary reor-
ganization. This course of action, 1t
was contended, would be to the best
advantage Of the bondholders as well
as the operators of the properties.
The buildings involved are the Ward
man Park Hotel, the Carlton Hotel. the
Chastleton Hotel, Stoneleigh Court,
Cathedral Mansions (north and center),
the Highlands the Boulevard, Daven-
port Terrace. 2700 Connecticut avenue
and the Department Of Justice Build
ing.
OF the total bond issue, $11 900 900
In securities was sold through four
prominent investment houses, with
Properties, Inc, as security. This was
followed by the issuance and sale of
$2,50O,000 of 612 per cent gold de-
bentures Of the Wardman Realty &
Construction Co.
Controls Construction Group.
The Hotels Management g. Securities
Corporation Is said to control the stock
Of the Wardman Realty q Constructor
Co., which in turn controls the Ward
man Real Estate Properties, Inc.
It was also understood that $2,225,-
OOO VI Ju1l1OT QcDcuJuIeS WSIe Issued
to Emory l.. Coblentz, prominent Fred
erick, Md, banker, and his associates.
1t was pointed out that some other
kind of security will have to be SUBJ
stituted for the gold debentureS in
event of reorganization. Counsel for
the corporations expressed the belief
that the 100000 issue was adequate
ly secured by the properties.
j. Reed Lane, president OF the Hotels
Management & Securities Corporation,
issued statement to the effect that
the corporation has on hand sufficient
operations and the pay rolls. He said
this corporation has been managing the
properties as agent.
Two Committees Formed.
Two protective committees have been
formed In New York. One is for the
benefit of bondholders under the SILL
100000 issue, on WHICH the interest
payment will be due March l. Declar-
ing 1t has received information that
the interest payment will not be net,
the committee urges all bondholders to
deposit their securities with the Central
Hanover Bank & Trust Co. of New
York, so that concerted action may be
taken for the benefit of ALL
The other committee formed for the
protection of debenture holders, says it
has been informed that the Wardman
Realty Construction Co. has failed to
make sinking-fund payment due Feb
ruary /, and also urges the deposit of
all debentures with the Irving Trust
Co., also of New York.