Evening star., 1936-08-17
REOPEN|NG PLAN
ANNOUNCED FOR
FIDELITY CONCERN
$4,000 Members Told Move
Is Based on F. H. l. B.
AffiIiation.
O'CONNOR APPROVAL
WOULD BE FIRST STEP
Shareholders and Federal Group
Also Must Act-Chairman
Takes Optimistic View.

With the assurance of their newly
chosen chairman that the plight lis
not so bad as it has been stated" the
$4,000 members of the closed Fidelity
Building and Loan Association today
considered reorganization plan made
public by an Executive Committee of
the institutions trustees.
The plan, which was submitted two
weeks ago to Controller of the Cur
rency J. F. T. O'Conner, who, on July
ls, ordered suspension of the aSsocia-
tions activities, is based on aff1liation
with the Federal Home Loan Bank
Board. Before the Fidelity could be
reopened under its provisions, it would
have to be approved by the depositor-
shareholders by O'Connor and by the
r. H. L. B. B.
OConnor's approval is necessary be-
fore the shareholders can act on the
proposal.
Bonnet Announces Plan.
The plan was made public yesterday
by Dr. Ralph w. S. Bennett, president
of the executive committee named by
the trustees Earlier 600 shareholders
spent an exciting afternoon at a meet
ing in the Washington Hotel Hall of
Nations.
These depositors Cheered, hooted
shouted and made speeches from to
pm, when they filed into the street
after electing as their own chairman
Don A. LOTUS, president of the Per-
maneSque Home Village, Inc, Bev-
erly Hills, Va, development on the
northwestern outskirts of Alexandria.
LOTUS who had called the meeting
and established his right to attention
by remarking that his Permanesque
firm 'is the biggest borrower share
holder in the institution" urged his
fellow depositors to have patience and
TO be optimistic.
Certainly" he said, "the losses can
not be as much as the 5000, 900 which
has been claimed. Fidelity's doors
would be open today if it had gone on
restricted basis instead of paying
a dividend July l.
Alternatives Stated.
In the brief of its Plan for re-
opening. the Executive Committee de-
clared the depositors are faced with
two alternatives:
Il. The liquidation Of the asso-
citation by the usual liquidation proc
esses, which will incur heavy expense
and the sacrifice of property result
ing in inordinate loss to them.
.. The reorganization of the as
sociation in such way as to keep 1t
q going concern and, at the same
time, conserve any questionable assets.
making them the subject of orderly
and inexpensive liquidation. thereby
saving for the shareholders practi-
cally all of the value they now have"
Evidently determined td eorganize
and reopen if such a nlpye is at all
possible, the committee suggested
that to bring about the second alter
native, the following be done:
Il. The association for the time
being shall continue its present closed
status.
q. That the Executive Committee,
acting for the shareholders, file with
the Federal Home Loan Bank Board
an application for charter as Fed
eral savings and loan association,
which will require no money out will
contemplate the transfer of assets Of
the subject association when and as
such assets have been approved as
acceptable assets for the Federal as
sociation.
g. Until such time as the proposed
new Federal association is ready to
begin operations, the associations Ex-
ecutive Committee shall have free ac-
cess to the associations Offices and
assets other than money, for the pur-
pose of enabling it to carry forward
the proposed plan.
a. When the Federal charter has
been granted under section 6, assets
of the subject association will be trans
ferred and board Of directors suitable
to the Federal Home Loan Bank Board
will be chosen.
IS. AS assets are transferred to the
Federal association, insured share
credits will be allotted to the share
holders of the subject association in
proportion to their share credits in
the association at the time of its
closing.
"6. After reasonable time has been
allowed for the transfer of acceptable
assets as outlined, all of the assets of
the association remaining in its pos
session will be transferred to trustees
or to a holding corporation for de-
liberate and orderly liquidation.
Other Promulgators.
Promulgators of this program with
Bonnet were the other members of
the Executive Committee, Marcus Bor-
chardt, secretary, an attorney; Henry
j. Miller, vice president, a minister,
and John l.. Fletcher, treasurer, a
bondsman.
Six other points in the plan. Bor-
chardt said, would require approval
of the shareholders before their sub
mission to the controller of the cur
rency and the Federal Home Loan
Bank Board.
THE Executive Committee has been
meeting daily to formulate the best
possible plan to conserve the interests
Of both depositing and borrowing
members" a formal statement by