Evening star., 1935-02-10
Certain Cases Seem to Find
Way to Certain JudgeS,'
Declares Representative.
BONDHOLDERS LOSE
IN REALTY REFINANCING
Mayfower Hotel Reorganization
Completion Brings Up Question
as to Other Properties.

With reorganization of the May
flower Hotel finally completed, Repre-
sentative Adolph j. SABBATH of Illi-
nois announced yesterday he is pre-
pared to launch an investigation into
charges of collusion in the refinancing
of other properties and to find out in
particular why certain cases seem
always to find their way into the
courts of certain judges in the Dis
trict courts"
SABBATH, who is chairman of a Spe-
cial House committee appointed to
investigate protective committees of
bondholers in connection with local
reorganizationS, did not specify what
cases or what judges he had in mind,
but it was pointed out these cases
are assigned in the usual routine and
that there is no way any particular
Judge can be selected by the parties
involved in a given case.
Investigation Promised.
It was announced charges of COL
fusion would be investigated in con-
nection with the refinancing of the
Mayfiower and Shoreham Hotels. GER
tain Wardman properties and the Ma
tional Press Building.
I'VE are told that the bondhOlderS
of these properties are being robbed
of their money" SABBATH declared,
land that there are evidences OF col
fusion in reorganization plans; that
many accounts have been manipu-
lated This committee has just been
given $50,000 by the House to con-
tinue its investigations, which are
Nationwide in scope"
1t also developed yesterday that
title to the Mayf1oWer Hotel has been
turned over to the new owning COM
pany by the former trustees-J. Mil
Ter Kenyon, Rush L. Holland and
John Lewis Smith. This was in ac-
cordance with decree handed down
in District Supreme Court January
% by Justice F. Dickinson Let's.
Several days ago. Justice Let's, at
the request of Senator Reynolds,
Democrat, of North Carolina. who
headed a special Senate committee
investigating the Mayfiower case
asked representatives of the new
owners of the hotel to defer further
action under his decree until the
Senate COMMITTEES had completed its
investigation and made its report. The
report was published Thursday and
the transfer of the property con-
summated on Friday.
Action Is Delayed.
Attorney Paul E. Lesh, represent
ing the first mortgage bondholders.
who now own the hotel, pointed out
no action was taken until after the
report was published, in accordance
with the request from Justice Let's.
The committee report recommended
that the reorganization plan be re-
Vsed to eliminate parties interested
in the original financing and that a
special master be appointed to ascer-
tain the preferences of all bondholders
as to disposition of the property.
1t was believed these recommended
tions will be ignored, in view of the
action taken Friday. LeSh pointed
out that all parties interested f1nan-
Cially in the hotel agreed to the re-
organization plan as approved by JUS
tice Let's and further stipulated that
no appeal would be taken from his
decree.
The old deed of trust, copy of
Justice Let's decree and the new
deed of trust securing the new bond
issue on the hotel were filed with the
recorder of deeds Friday by the May
flower Hotel Corp, which now owns
the property. w. L. Beale, president
of the new corporation, with the
American Security & Trust Co. took
over the property as operating agents
1t was announced H. L. Polio, the
present manager, will remain in di-
rect charge.
SABBATH said questionniares have
been sent to the bondholders of vari-
GUS properties scheduled for investi-
CATION, and that those returned are
now being analyzed. He explained
his committee had delayed action
pending completion of the Mayf1ower
investigation by the Senate commit
tee.