Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-26
REORGAN|z|NG MAY
PROVE BIG SAVING
IN WARDMAN CASE
Plan includes Judicial Sale of
Properties to Avoid
Costly Foreclosure.
NEW CORPORATION
WOULD HANDLE AFFAIRS
First Mortgage Bondholders' Ap-
proval Required If Receiv-
ers Act.

Receivers recently appointed to take
over nine Wardman-built properties
here announced yesterday a tentative
plan of reorganization which they be-
lieve will safeguard investments aggre-
eating Sill 100000.
One of the outstanding features OF
the plan is a proposal to negotiate
judicial sale of the properties to a rep
resentative of the f1rst-mortgage bond
holders, thereby avoiding an expensive
foreclosure. If, however, a sale under
the trust should become necessary, 1t was
said, it would be in the nature OF
reorganization foreclosure.
The buildings affected are the Ward
man Park Hotel, the addition thereto,
the Carlton Hotel, Chastleton Apart
ments Cathedral Mansions, Davenport
Apartments, Boulevard Apartments,
Stoneleight Courts, 2700 Connecticut
avenue and the Department Of Justice
Building.
Payments Are Missed.
The present owning corporation,
Wardman Real Estate Properties, Inc,
was unable to pay interest on the mort
gage bonds due March l, last, and also
failed to meet certain sinking luna re-
ouirementS. These failures led to a
request for appointment of receivers,
which was granted.
The proposed plan, which must be
approved by the committee of first
mortgage bondholders, would first set
I'D a new corporation to own and oper-
ate the properties After transfer OF
title, the old first mortgage bonds would
be called in and new bonds In similar
amounts issued to the various holderS.
Mai. julius I. Peyser, one OF the ,e-
ceivers, pointed out that considerable
saving probably could be effected by
elimination of distinct operating cor
poration~ Not only might the buildings
be more efficiently managed, he SAID,
but a number of salaried officials could
be dispensed with.
Mai. Peyser also emphasized hat one
of the unsuccessful properties - the
Highlands-which was included In the
10 buildings originally grouped under
the present management, has been dis
posed of through foreclosure. This, ne
said. would eliminate considerable
drain on the revenues OF the mere
profitable properties.
Plan Of Reorganization.
The Spokesman for the receivers
made it clear that the plan OF reorgan-
izatlon now put forth looks only TO the
conservation of the investments OF oond
purchasers under the $11, 100000 nrst
and refunding mortgage, and the mold
ers of approximately $5,0OO,OOO In IN
DERIVING mortgages. !.
w.t. vie
what provision will be made for the
holders of $4,75o,000 in senior ana
Junior debentures issued along with the
bonds. It was learned that nearly one
half of these debentureS were issued 10
Emory L. Coblentz, Frederick, Mo,
banker. who was indicted here recently
on periury charges in connectlon WIN
the recent F. H. Smith Co. conspiracy
trial. 1,od
Mai. Peyser said the receivers mao
not as vet interested themselves IN tnls
phase of the problem. 1t was learned
in other quarters, however, that cne
debenture holders might be gwen soOGS
in the owning corporation, which Woulo
offer them a remote chance OF reaIlzng
something on their holdings.
The Bondholders' Committee, 1t was
said. has been pledged about 30 per
cent of the outstanding bonds al bnl Is
time. It Is believed more bonds Will
be pledged in the near future.
Possible Legal Proceedings.
It was pointed out that the minority
bondholders might initiate legal pro
ceedings to stop the proposed reorgani-
zation plan, but the receivers are max
ing every effort to forestall such de-
yelopment.
Douglas. representing the receivers, Is
expected to have the detailed plan
ready for publication within the next
few days.