Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-23
RECEIVER NAMED
FOR MAYFLOWER
Hotel Company to Fight Ac-
ton of Group Represented
by Mrs. WiIIebrandt.

The Mayhower Hotel today was under
a temporary receivership, following the
filing late yesterday of petition on be-
half Of i've bondholders, who, 1t Is de-
clared, take this step as protection
against a proposed new financial set-up.
Following close on their action, notice
came from William E. Leahy, counsel
for the Mayfiower Hotel Co., the own
ers, that the receivership would be
fought, and that the vast majority" of
second-mortgage bondholders would line
up with the company against the re-
ownership applicants. who are represent
ed by Mrs. Mabel wsMer WiIlebrandt.
Justice oscar r. Luhring of District
Supreme Court, who granted the tenn
porary receivership. named Thomas P.
Lttlepage and Joshua Evans, ir., to
take over the property pending outcome
of the court action, which Is designed to
have the hotel placed permanently in
the hands Of receivers or Of a group Of
stockholders.
Bond Company Receiver Named.
The move here was concurrent with
court action in Chicago, where the Fed
eral District Court appointed q receiver
for the American Bond & Mortgage Co.,
which financed the Mayflower and
which, according to the petition here,
owns the Mayhower Hotel Co. The
hotel is operated by the Mayfower Ho-
tells Corporation, q subsidiary, which Is
also a defendant.
The complaining bondholders in the
action here ara Ernest c. Mulvey and
George r. Ellis of North Attleboro,
Mass; 9. Wallace Tibbetts of Boston,
Franklin F. Noyes of Waterville, Me,
and John D. Colgan of New York
The bond company is said to be
owned by William j. and Hattie Moore,
Harold A. Moore, Kenneth w. Moore,
Katheryn Moore and Charles G. Moore,
all Of whom are named Is defendants
with the company and receiver.
out that the first bond issue was fioated
for the hotel in 1922 and operations
begun In 1925.
In May. 1928, she says, when the rea-
Sonable market value Of the property
was $6,300,000, the bond issues and
other membranes amounted to ST.
ITS, 900.
Charges Intent to Cheat.
At that time, she said, the defendants
floated first and second mortgage bond
issues of 100000 and $2,400, 900, re-
spectively for the purpose Of "enriching
themselves and with the intent to trick,
cheat and defraud the investing public"
Her petition adds that the cost of float
ing the bonds was 81 ,099, 1886, and that
in addition, old encumbrances of ST.
175,000 were paid off, with the result
that the defendants enriched them
selves TO the extent Of $1,625, 614.55.
The defendants, 1t is further con-
tended. knew that they could not comply
with the terms Of repayment, because
the hotel had been unsuccessfully OPP
Grated during the whole OF its history
and operation"
Alleged losses Of approximately $780,
900 in 1927 and $460.000 in 1928 ere
cited in support Of this argument, and
the assertion made that they would
have been 100000 greater had proper
allowance been made for depreciation
In all, petitioners say, the bonded in
debtedness of the hotel is at the rate of
S9,537 per room, exclusive Of the public
rooms.
Reorganization Outlined.
Going in the proposed reorganization
plan, the court Is told that on March
81, last, the defendants organized The
Maynower, Inc" and four days later
-
fraudulent" plan Of reorganization.
Bondholders who will not agree TO this
reorganization are to be frozen out" 1t
is commended, while the plan, it is de-
clared, is TO derive solely to the profit
of the operators. and would remove
safeguards the holdings of the second
bondholders now enjoy and throw the
losses on them.
Interest due on the bonds April /,
ton.
Interest due on the bonds, April !,
was not paid, according TO the petition.
The bonds are said to be held by
people all over the country, and unless
the court acts Immediately, the petition
says, the defendants may destroy or
secrete the books of the concern or may
squander 100000, now held by the
Mayflower Hotel Co.
The petitioners believe that the ho-
tel may be made to pay operating ex-
penses and make some return to them
selves, 1t is set out, and the court is
asked TO enjoin the operation of the
establishment by the receivers, or any
attempt to bring other legal action be-
cause of the default of the bond pay
ments or failure to pay taxes.
The Mayflower is one of the best
known hostelries In the country and
Vice President Curtis makes hts home
there.
Management Not Affected.
Daniel j. O'Brien, president and man.
aging director of the hotel, issued a
statement today calling attention to the
fact that the receivership order does not
affect the management Of the institu-
ton.
ut should be distinctly understood
that the managing company is not In
receivership. The order was granted
against the owning company (the May
flower Hotel Coz and not the managing
company (the Mayhower Hotels Cor
poration Of America).
The managing company has q AZ
year lease" O'Brien said, land guarar-
tees to its patrons the same high stand
ards of management which have given
the institution an international reputa-
ton.
THE present receivers assert no
claims whatsoever to interfere with this
management"
RECEIVER APPOINTED.