Evening star., 1932-04-08
COMMITTEE BEGINS
NEW MOVE TO AID
HOTEL INVESTORS
Continued From First Page.)

NSOIlblIueQ fTOID f1ISL FdRe.J
in the fact that the Protective COM
mittee has obtained complete control
OF the Shoreham Hotel properties. 1t
is also announced that large per-
centage OF the total issues of S2,750,-
600 of notes are already on deposit
with the committee.
Total liabilities against the hotel
properties are in excess of SIS, 10000 of
which more than $2000,000 claim
priority over the Hudgins & Shore
ham Corporation series of notes.
In order to put through its plan, the
committee has acquired all the stock of
Shoreham Hotel Corporation, q consid-
cradle percentage OF the mechanics
liens and options for the purchase of
other mechanics liens and claims, at
large discounts
The Protective Committee and the
trustees for the new second deed of
trust viii retain consrol of the palatial
hotel properties until such tinae as all
OF the second deed Of trust notes. to-
gether with all interest due, are paid
of. The committee. however, adds that
1t cannot protect non-deposited notes.
1t was announced today that the
National Metropolitan Bank, which is
the committees designated depository,
Will continue to accept deposits of
notes, but the right has been reserved
to refuse sEch deposits after May /,
1882.
Further Details OF Plan.
In the letter Just sent to noteholders
outlining the plan which the committee
expects will recover the original invest
ment 1t Is stated that highly eompi-
Gated and almost endless legal diffi-
culties win be aveided-legal action
which would necessarily be attended by
tremendous expense and delay. with nc
certainty Of successful outcome. Fur
ther details regarding the plan include
these statements:
1t win make available 10 various
merchants, many of whom are local
people, cash which is required in their
respective businesses, and In such
amounts as should have an appreeiable
effect upon the existing situation in
Washington and will improve the credit
and financial standing Of the hotel,
thus enhancing the security Of the note
holders
1T will afford an opportunity for the
successful operation of the hotel prop
erty under circumstances more favor
able and economical than at present,
increasing its earnings in the interest
OF the notehOlaerS.
1T viii be necessary. In order to ac-
complish the foregoing and properly
clear the necessary Shereham Hotel
properties, to raise funds by q first deed
Of trust in such amount and upon such
terms as may be approved by the COM
mittee, though the exact amount Of this
loan cannot be determined at this time.
This trust would secure only COM
paratively small amount. which 1t
should be possible to continue almost
Indefinitely without curtail. DepoSittng
noteholders viii be given deed Of trust
notes, second only to such first trust
loan, of single issue. all bearing the
same date. having the same maturity
and the same security, thus eliminating
the possibility Of separate foreclosures"
Other details contained in the an
nouncement say that the committee,
until the second deed Of trust Is record
ed and the trustees named. will control
all owning and operating corporations
and have the power to compel the ap-
plication of all net earnings to the dis
charge Of the second deed OF trust
notes payable on or before 10
years" The trustees win also have the
power to take over and operate the
property in event Of any default or
any failure 10 properly apply any net
earnings.
Payment of Interest.
In conclusion the report says that
"the full amount of accumulated in
terest to the cate of the new issue will
be paid to depositing noteholders, pro-
vided the new first trust loan can be
obtained in an amount sufnciently large
to include such interest.
The new notes to be delivered to the
r1NfahnlAare xuin he in tho
same amounts as the notes deposited
by them, without deduction from or
charge against said notes on account
OF the committees charges and ex-
penses."
The Noteholders' Protective Commit
tee Is composed Of Edward =. Colladay,
C. F. r. Ogilby, Harry I. Rust, George
w, White and Walter b. Guy, chairman.
Innumerable conferences have been held
by this committee In the formulating of
this new plan to salvage funds of in
yestors in the big hotel project. The
preliminary work was made especially
hard owing to the fact that one set of
notes was issued on the portion of the
hotel containing the dining room and
kitchen, while another was placed on
the rest OF the hotel, q most unusual
method in construction financing.
The Shoreham Hotel is located on
Calvert street q short distance west Of
Connecticut avenue, commands q mag
nificent view of Rock Creek Park and
is one of the finest hotels in any city
in the country. 1t has been in receiver
ship since the Swartzell, Rheem 6 Hen
sey crash on January 26, 1881, but has
been In continuous operation since that
time.
The receivers are Francis H. Duehay
John e. Laskey and Spencer Gordon
who have been operating the properties
under direction of the court.