Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-04-29
RHEEM TEST|F|ES
ON TRUST RELEASE
Lombardy and Marquette
Apartment Deals Revealed
to Creditors.

Testimony concerning release of trusts
On the Lombary and Marquette Apart
nents was introduced at a meeting to-
day of creditors of the bankrupt Swart-
Zeil, Rheem & Hensey Co.
1t was brought out that a first trust
of $350,000 on the Lombardy, at 2019
I street, was released and trust for
$325,000 substituted. The difference of
$4,000, 1t was said. was made up by
advances from the owner of the prop
erty and Swartzell, Rheem & HenSey
&C.
Edmund D. Rheem. vice president of
the bankrupt concern, told Attorney
Georeg E. Sullivan he did not know eX-
actly how many noteholders under the
original trust actually were paid off
after the release. He said all were
credited on the company'S books with
the amounts due them.
Question Abandoned.
An effort by Attorney Sullivan to in
quire into the history of the financial
relations Of the company with A. Jo-
Seph Howar, to whom the building lean
was made, was abandoned when the
referee commended it was not sufficiently
relevant to justify "cluttering up the
record"
The original trust on the Marquette,
located at Twenty-first street and Penn
sylvania avenue, was for 1885 900. This
was released and a substitute trust for
$260,000 was executed The balance.
$4,000, was raised for purchase by
Swartzell. Rheem & Hensey Co. Of a
second trust from the owner Of the
property, said to have been William j.
Schiller. Rheem said his concern acted
only as an agent when Schiller sold
the property to Howar.
He refused to say how many note
holders under the original trust were
paid, on the ground an answer might
incriminate him
The hearing will be resumed at 1870
o'clock Friday, May 8.
Quizzed on Apartment.
The creditors yesterday examined
Rheem on the financing of the Ponce
de Leon Apartments, Connecticut ave-
nue. and Appleton street.
1t was established that $685.
first trust had been released, Rheem
substituting another first trust for $685.
600, held by the New York Life Insur-
anca Co., Rheem said some of the note
holders under the original trust had
been paid, but he did not know how
many.
An effort by Attorney William E
Richardson to ascertain the exact num-
Der paid between November l and No.
vember Is, 1929, was abandoned when
it developed an hour would be required
TO obtain this information.
Rheem testified the 5000 difference
between the two trusts was raised by
placing second trust in that amount
on the property and that the entire
fund was deposited in the Federal
American Bank.
Attorney Marcus Borchardt brought
l1od m
leary G. Hoskinson, vice president of
Riggs Bank, for serving on a board of
arbitration which settled a dispute
over payment of a commission on the
Shoreham Building deal.
Borchardt also questioned Rheem
concerning letter sent to Southern
Diaries, Inc, regarding a 100000 cur
tailment Of second trust note on the
Shoreham Building. Rheem said the
for $685. 900 put through the Riggs
Bank. He said this was paid after
special account, established for the
benefit OF the note holders under the
original first trust, had been transferred
to the general account of his company.
He said a statement in his letter that
his company was using the bank to the
limit" was sales talk"
Brewer Questioned.
J. Newton Brewer, second vice presi-
dent of the company, was quizzed by
Attorney George z. Sullivan concern@'
ing the release of a trust on the Broad
moor apartment project. Brewer dis
claimed all responsibility for the trans
action, saying he. was merely carrying
out Rheem's instructions. The latter
was in Florida at the time, he said
Didn't you know at the time you
put through the release that Sxartzell,
Rheem & HenScy Co. didn't haze
enough money on hand to pay off the
frst-trust holders?" Sullivan asked
We'll, know it now, but 1 didn't
take it into consideration at the time"
Brewer replied
Did you take any action when you
learned the noteholders were not being
paid?"
mo. I had no authority. I didn't
even know at the time that Rheem
wasn't paying them"
Referee Fred j. Eden announced
Frederick B. Pyle, Morton J. LuchS and
John F. AIaury have been appointed
appraisers 10 evaluate the real property
in the assets of the bankrupt