The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1932-09-23
INVESTORS HOPES
FOR some SALVAGE
GIVEN DEATH BLOW
insult Utility investments and
Corporation Securities
involved
BOND HOLDERS PETlTlONED
List Of 2O5 Favored investors
Made Public BY
investigator
BOND HOLDERS PENTloNED

Chicago, Sept. 23-(P}-Corporation
Securities Co. and insult Utility In
vestments, Inc, the two insult in
vestment trusts in which the public
had $3O0,OO0O00 invested. were adj
judged bankrupt Friday by Federal
Judge Walter G. Lindley.
The DEGREES. which Judge Lindley.
had indicated Friday night he would
sign, were filed with the clerk Of u.
S. district court.
In memoranda attached to his de-
crees Judge Lindley snuffed out the
last hope of stockholders that they
would ever realize anything on their
investments.
The court also entered an order
continuing in full force the restrain
ing order issued against New York
banks, the Central Hanover Bank
and Trust company, Guaranty Trust
and the Chase National bank, pro-
hibiting them from selling the COL
lateral pledged by the two bankrupt
corporations on loans.
The judges memoranda said, in
part:
Shortly after equity proceedings
were instituted against the corpora
ton became of the opinion that
the proper form for administration
of the estate was in the bankruptcy
oc,,,.f Tv,fc finVo 1r-I,iC1, cs,Hrc IHo G
come to me from the receivers and
from reports and auditS have con-
firmed this opinion.
Reorganization Impossible
There is no chance OF a rcorgan-
ization and there arc no assets other
than such, If any, as may be recov-
cred by proper litigation instituted
by the trustee.
apparently there is no possibility
that assets of sufficient character or
amount as to bring the stockholders
any return whatsoever will be real
lied"
The affairs of the two defunct cor
porations, it is anticipated, will now
be aired by referees in bankruptcy
Meanwhile the court and public Of
ficials were studying lists of pre-
ferred" customers who were allowed
to purchase insult stocks prior to
the general public offerings at en-
HANGED prices.
The states attorney, who already
has begun an inquiry to determine
whether criminal acts were commit
ted in the conduct of the insult fl
nancing, searched Friday for further
lists of preferred" investors which
were reported to exist. To. finance
his investigation, States Attorney
John A. Swanson went before the
county board and asked the restora-
ton of a $4,000 appropriation which
previously had been slashed from his
departmental budget.
Employees Are Included
Among the roster of the chosen
205" who were permitted to buy In.
sull Utility Investment stocks at 81
before the open market offerings
were such names as Gerard Swope
president of General Electric; George
A. Cooke, one of the two receiver.
of Middlewest Utilities company, anc
Patrick J. Lucey, former receiver Of
Corporation Securities; Nine. Rose
Raisa Rimini, former Chicago Civic
Opera prima donna; South Trimble
clerk of the national house of rep.
reSentatives; Dema E. Harshbarger
head Of the Civic Concert service
Samuel A. Ettelson, former Chicago
corporation counsel; Joseph E. Otis
banker; Gen. James A. Ryan of New
York; Owen D. Young; Martin In.
sull, Marshall E. Sampsell, Brittor
I. Budd and number of executive.
and employees of the insult compan'
les.
Both companies had been operat.
Ing under equity receiverships since
April Is. Judge Lindley. at his home
in Danville, ILL.,. Thursday night con.
sented to act on a bankruptcy petit.
ton against the concerns presented
by a Chicago law firm which repre-.
sents group of bond holders in botl
companies.
Said Hopelessly InsoIvent
Earlier in the evening the receivers
for the Corporation Securities com
pany nled their report in which the!
AACA0 V4SeSU vAAC. AkAvCoVAA4V4Avs " NOV ~
"hopelessly insolvent."
The assets Of the once $40. 900 ,00l
concern were so meager. the receives
reported, they were unable to NEE
the expense OF having an invntor!
made.
There were bales and bales o
worthless stock certificates in tn
treasury when we took possession
April 16." they reported. 1.-THE onl!
assets convertible into cash were $50,
600 in tax anticipation warrants"
Through the maze Of statistics con
tanned in the report could be traces
the last desperate efforts Of 6amue
insult to save the tottering company
The statement Of liabilities indicates
he had obtained succor from banks
from affiliated companies, and from
/ manufacturers with whom his com
panies did business. Then, with othe
sources exhausted. and the marke
value of the company's securitie
steadily declining. he had pledged hi
,Vr,,, rredtt IN a last vain ATTEMPT I