Evening star., 1934-06-14
Majority Stockholders May
Resort to Bankruptcy,
Counsel Intimates.
PROGRAM is REVEALED
DURING SENATE QUIZ
Attorney Outlines Effort to Place
Property Into Hands
of Owners.

With the Mayfiower Hotel fore:
closure sale postponed indefinitely.
Paul E. Lesh, counsel for the Majority
Bondholders Committee, today told
the Senate District subcommittee in
vestigating the proposed reorganiza-
ton of the property that efforts would
be made in the meantime to satisfy
the second mortgage holders and end
the receivership.
Lesh pointed out that the sale, as
a result Of the recent action Of the
District Supreme Court, could not be
held until the Court of Appeals passes
upon an appeal taken from the order
of Justice Jesse c. Adkins by group
Of second trust owners. The Bond
holders Committee, however, he said,
would strive to find a way to move
the property into the hands of those
whom they believe to be the owners
before that time. He intimated bank
ruptcy proceedings might be resorted
10 10 eno the recelVerShlp.
Kean Opposes Delay.
Lesh's statement was made in con-
nection with a proposal by Senator
Reynolds, Democrat. of North Caro-
lima, that the subcommittee POSTPONE
further hearings until after adjourn
ment of Congress. He explained the
pressure of legislation in the closing
hours of the present Congress might
demand too much time of the mem
bers. Chairman Kean, however, OBJ
jected to the plan. He said as soon
as Congress adjourns he would be
forced to leave Washington for his
campaign in New Jersey and while
away his thoughts would not be
much on the District of Columbia,
because it has no vote"
Lesh said the Bondholders Com
mittee would not object to a short
poStponement of the hearing, but they
would not like to see long delay.
Explains Reorganization.
The subcommittee then decided to
proceed with the hearing and make
an attempt to complete its investiga-
ton BY the end Of the week.
Lesh was recalled to the witness
stand to complete his explanation of
the reorganization plan. At the out
set be submitted a summary of the
protective agreement submitted to the
bondholders in September, 1891, by
the Bondholders' Committee.
TodayS hearing. scheduled TO begin
at 1880 am, did not start until l1:45;
due to the delay of Chairman Kean
in reaching the Capitol.
Reynolds Protests Cost.
In the course of today's hearing
Senator Reynolds discussed the cost
of the receivership and expressed the
view that to prolong the receivership
would result in ''eating up the invest
ment made by the people"
Senator Kean, Republican. of New
Jersey, added that is the trouble with
all receiverships."
Senator Reynolds, who was absent
from the city yesterday, then inquired
for how long a time the court had
granted postponement of the pro-
posed sale. He was told it was put
OF until a hearing is had on the ap-
peal of the second trust bondholders,
| and Mr.. Lesh estimated this would
mean a postponement until the early
part Of next year.
Senator Reynolds then declared
that the hotel business in the District
is better today than usual in Wash
ington and said he is afraid that If
this thing drags on we will reach a
situation where nobody will want to
bid p" This, he said. would be to the
detriment Of the investors.
Lesh Cites Criticism.
At this point Mr.. Lesh said he
wanted to say something about criti-
cism voiced earlier in the hearing by
the receivers against the proposal for
part bonds and part stock in the
oondholders' plan Of reorganization.
He said the impression was left that
the stock might be just a come-on
for the bonds"
Expressing the view that this criti-
cism was not fair, Mr. Lesh said the
receivers had stated in their report
placed In the record, that the pro-
posed new securities seemed to be on
a fair and equitable basis Lesh
said that while it was true the re-
ceivers had criticized the bondhold-
ers' plan, it was only on details.