Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-06
Ruling Expected Next Week
on $16,000,000 Mortgage
Motion.
REORGANIZATION is AIM
OF GROUP MAKING FIGHT
Opponents Declare Move Inexpe.
dent, Contending Selfish Rea-
sons Are Back of It.

A motion to foreclose a $4,000 ,0OC
mortgage on nine so-called Wardmar
properties here was being considered to.
day by Justice Jesse G. Adkins of the
District Supreme Court.
Justice Adkins heard argument Of
counsel for and against the motion
yesterday, and took the matter under
advisement. He is expected to an.
nounce his ruling next week.
The motion for foreclosure Is beine
pressed by a committee representing 81
per cent of the purchasers of approx
mately $1l 100000 worth of bonds ISSUED
under the mortgage. This group, after
the foreclosure, would put into effect 6
plan for recognizing the properties.
BondhOlders Opposed.
Some of the bondholders who have
not deposited their bonds with the So
called protective committee vigorously
opposed the foreclosure at yesterdays
hearing, contending such a move woulc
be ineXpedient now, in view of current
market conditions, and would prove
detrimental to the interests of all the
security holders.
They also complained that the fore.
closure plan Is being sponsored by Hal.
sey, Stuart g. Co., a member of The
banking group through whom the, bonds
were sold, for selfish reasons. and that
the proposed substitute securities are
inadequate.
In addition to the $ll 900 900 In
bonds. there were issued approximately
81, 500, 900 of senior gold debentures anc
more than S2,000O00 in junior golc
debentures, the latter being turned over
to Emory l.. Coblentz Frederick, Md
banker, in exchange for his equities in
four Of the properties. Both the bonds
and debentureS are now in 6efault
There are also outstanding 1920 OOC
of two-year notes of the Wardman Real
Estate Properties, Inc.
Propose Income" Bonds.
The proposed plan of reorganization
would substitute for the present inter-
eSt-bearing bonds an equal amount OF
z per cent income" bonds, or bonds OIL
which interest would be paid only as
the earnings Of the properties justified
such step. 1t has been commended
bonds OF this character would minimize
the danger of another interest default
and foreclosure. These income bonds
would be secured by a new mortgage
on the nine properties.
For each $500 Of senior gold deben.
G&(IldIRp0 ON(
shares of common stock in a new cor
poratlon to be formed to take over the
properties and assume the obligations
1t has not been disclosed to what ex.
tent the senior debentures have beer
sold to the public.
The tWo-year notes will be taken care
or by the issuance of one share of com.
mon stock in exchange for each soc
block Of notes.
COblentz Faces Loss.
The plan makes no provision what.
soever for the junior debentures issued
Coblentz If it is put into effect. il
Will mean a paper loss of more than
$2,000,000 to the Maryland banker.
Under the reorganization plan a sum
not to exceed $2400,00O would be Dor.
roWed to renovate some of the proner.
ties and to provide an operating cash
fund. This proposed loan would be
secured by a mortgage on the proper
ties, which would be a prior lien to the
mortgage which would secure the issut
OF income bonds.
1t was contended on behalf of those
sponsoring the foreclosure that such >
move is imperative, and that the best
interests of all the security holders viii
be served by a prompt acceptance ri
the proposed reorganization plan.
The properties involved are the Ward.
man Park Hotel, the Carlton Hotel the
Chastleton Hotel, the Department ~
Justice Building and the Boulevard
Cathedral Mansions north and cen.
teri, Stoneleigh Court. Davenport Ter.
race and 2700 Connecticut avenus
apartments.