Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-27
RHEEM INVESTORS
TO LOSE HALF, NEW
ESTIMATES REVEAL
Investors in Bankrupt Mort.
gage House Must Wait Two
Years for Money.
LENGTHY LIQUIDATION
PERIOD SEEN NECESSARY
Condition of Real Estate Market
Bars Immediate Settlement,
Eden Declares.

Creditors of the bankrupt Swartzell,
Rheem &; Hensey Co. will be fortunate
! If they receive so cents on the dollar
on their investments after the assets of
the firm have been liquidated, and will
have to wait two years to get that, it
was learned today.
This estimate of the capacity Of the
estate to pay off is considerably lower
than former ones, some of which valued
the assets high enough to predict that
creditors would receive back 80 cents OF
every dollar they invested.
At the same time it was brought out
that those who invested their money
with the company will have to wait at
least two years before receiving any
substantial reimbursement as creditors.
Conditions Bar Speed.
Pointing out that the bankruptcy act
contemplateS a speedy liquidation Of
assets, Referee in Bankruptcy Fred J..
Eden said that in this particular case,
however, a protracted liquidation period
would be necessary.
1T is in the interests Of the creditors
to market assets of any bankrupt as
advantageously as possible" Mr.. Eden
said. Although no unnecessary delay
will be tolerated in this case. the con-
dition of the real estate market is
such that Swartzell, Rheem & Hensey
Co. assets in the form of real estate
cannot be profltably disposed of i'm
mediately
I'VE will wait five years If necessary
to bring about a desirable liquidation.
N lny1nnr h. IA&k IL -
for the creditors"
Although explaining the extensive
real estate holdings now in the hands
OF the trustees must await an upturn of
the market before being sold, one trus-
tee expressed the opinion today that not
more than two years would be required
for a complete liquidation.
In the meantime, it was said, other
assets will be marketed and the credi-
tors paid off as quickly as possible. 1t
was expected that some small payment
might be made at the next creditors
meeting. which probably will be held
within the next three or four weeks.
Pending Suits Cited.
Attention was called that some delay
will result from the fact that suits
have been filed to restore released
trusts.
it was pointed out, the liabilities of
the estate would be reduced. One Of
fetal gave the following explanation:
Suppose trust for 81 ,200, 900 on D
property was released and a trust for
81 900 900 substituted. The noteholders
under the released trust are now cred
itors of SwartZell. Rheem & Hensey Co.,
but If the trust should be restored they
would no longer be creditors. Those
holding under the substitute trust would
step into their shoes as creditors, but
the total of their claims would be $780,
900 less, reducing the liabilities in that
amount"
One trustee. in discussing the ability
of the trustees to pay off claims,
said that even under the most favor
able circumstances it was doubtful II
the creditors could be paid as high as
so cents on the dollar
These bankruptcies" he said, al
ways look worse as you get deeper into
them"
When receivers were first appointed
and after assets and liabilities had
been tentatively assayed, a pay-off of
80 cents on the dollar was forecast in
some quarters.