Evening star., 1940-04-17
Bankruptcy Petition
Prepared by Group
In Seaboard Case
Old Boy Line Seeks
To Purchase Rival in
Another Court Action
BY the Associated Press,

BY the Associated Press.
NORFOLK, Va, April 17.-Plans
to divert the financial reorgani-
zation of the Seaboard Air Line from
its 9-year-old receivership to the
bankruptcy route have been dis
closed to the Federal District Court
here by attorneys for holders of
certain of the roads securities.
An underlying bondholders' pro-
tective committee and a New York
legal firm representing holders of
S. A. L. equipment trust certificates
told Judge Luther Way they were
preparing the petition asking bank
ruptcy.
The court already has received
two proposed plans of reorganiza-
ton under the receivership, but a
hearing on them before Special
Master Tazewell Taylor was post
poned yesterday until May 81, ap-
parently to allow time for some &C
tion as to bankruptcy. If the new
move should succeed, the plan of
reorganization would be devised by
the Interstate Commerce Commits
sion.
Fee Payments Authorized.
The receivers, Leigh R. Powell, jr.,
OF Norfolk and Henry w. Anderson
of Richmond, were authorized by
Judge Way yesterday to pay ap-
proximately $185,00O in allowances
to trustees of the roads general
mortgages and attorneys for the
trustees. These payments, approxl-
mately so per cent of those which
had been recommended by Special
Master James E. Heath, cover serv-
ices and expenses during the entire
period of receivership.
In separate action, which con-
cerned the Seaboard, the Baltimore
Steam Packet Line, Familiarity known
as the Old Bay Line, sought court
authority to purchase assets of the
Chesapeake Steamship Co. Both
operate passenger and freight
steamers between Norfolk and Balti-
more.
1t was proposed that the Old Bay
Line declare dividend of $500 1000,
payable in its debentures, and then
issue 100000 more in debentures to
be used in purchasing the Chesa-
peake Steamship Co. assets. The
latter company in turn would pur-
chase from the Seaboard, which
owns the Old Bay Line, so per cent
of the capital stock of the Old Bay
Line, using the $4,000 in debentures
for that purpose.
Judge Way Signs Order.
Judge Way signed an order after
the filing of the Old Bay Lines ap-
plication, directing that the petit
ton be filed with the court and that
all such parties as desire to make an
answer to it do so on or before May !.
The Chesapeake Steamship Co.,
whose bay steamers and services
are practically Identical with those
of the Old Bay Line, now is owned
by the Southern Railway System,
which holds two-thirds of its capital
stock of 100000, and the Atlantic
Coast Line Railroad, which holds
the remaining one-third.
Negotiations for the consolidation
of the two companies began after
the Chesapeake Steamship Co.'S
owners became unwilling to make
any further advances or contribu-
tions to it.
Celebrates Tooth Anniversary.
The petition filed today would
allow the Old Bay Line to acquire the
property and assets of the Chesa-
peake line and to continue to oper-
ate as one combined service the two
lines now operating separately.
The new organizati ton that would
be formed still would be known as
the Baltimore Steam Packet Co.
formally and the Old Bay Line famil-
iarly, thus keeping alive a name
that has become tradition to
Chesapeake Bay shipping and pas
senger service. The line this year
is celebrating the Tooth anniversary
! of its incorporation in 1840 in the
State nf MARYLAND