(Directors of Company named)
Shanghai, June 6.
'An opinion approving the plan for the reorganization of the China Realty 'Company, Federal' Me, USA, was sivan by Judge M. J. Helmick after a hearing at the United States Court for China yesterday morning, An order naming Messrs. Carl Wolsiffer, George Sellett. C. C. Stocker. M. Spelman and ix. L." Chung directors of the company until the Jclose of the fiscal sear, December 31, to be Issued by the Court at an early date, Mz. Wolsiffer, trustee of the estate of the China Realty Company, told the court that since the plan had been Sled on Apritt? of this Yea, the each the dates set down ili the plan as mitted 0 the court for the payment of mortgages and debentures could be Set ahead. Mr. Wolsiffer also stated that he had fulolled all conditions set forth by the court at the time the plan for reorganization was' fied.
The charter of the company 1s amended so that the capital stock clause thereof shall be substantially as follows:—"The amount of the authorized capital stock of the company C-$12,500,000, divided into 1,250,000 common voting shares of the par value of ten dollars Chinese currency each, none of which shall be issued except in consideration of money or property at the, true value of such property. After issue, common voting shares may be retired by the company from time to time by pro rata payments all all. stockholders, provided that the shares. left out: Standing shall not be reduced below 312500" and provided further that upon retirement of any shares th value of the net assets of the company shall be at Toast as great as the total par value of the shares left outstanding against such assets. Sock certificates may contain the terms and conditions upon which common Voting shares may be retired."
Under the plan of reorganization all of the present outstanding common stock of the Company will be cancelled and new common stock the company will be issued of the total par value of approximately twelve million dollars. "About 98 per cent. of this amount will go to pre-_ sent holders of 8 per cent. debentures and Mrs. Liza Hardoon; the remainder. twill go to the present stockholders of the company. "Holders of eight per cent, debentures loaned money to the company with the expectation that upon the maturity dates, April 1, 1940, company. "In view of the foregoing the company's policy shall be to sell company real estate as rapidly practicable and advantageous "and, with the proceeds thereof, first pay off the secured indebtedness of the company and then reduce the outstanding capital stock by retiring shares from time to time by pro rata payments to stockholders until the onstanding capital stock has been re-Suced to approximately four million dollars.
By following this policy it may be reasonably expected that by April 1, 1941, the greater portion of the moneys loaned to the company by eight per cent. debenture holders will have been repaid, On the basis of present operations the company will be able to operate profitably and could pay small dividends on the twelve million dollars capital. pro= vided by this plan of reorgunizatior Successful operation could be con. tinued on greatly reduced capital. Tt the opinion of the trustee that even though the capital stock is reduced to approximately four million dollars the company can continue 0 operate successfully and pay reasonable returns to stockholders, The opinion handed down by Judge Helmick states: This matter comes: afore th> court upon the hearing for the approval and confirmation or the disapproval of the plan of reorganization of the deplor company filed by the trustee. "Since no objections 10 the plan have Leen filed and since the requisite percentage in amount of each class of creditors affected by the plan and of the stockholders have fled acceptances, the approval and cor firmation of the plan might apparently be ordered as a routine matter, However, the duty of Independent scrutiny determine the fairness and feasiity of the plan is visited upon the court by the satutes of the United States, The plan is simple. The trustee proposes that the company shall pay off secured creditors in full without impairing their securities and that in effect the company be turned over to the eneral "unsecured creditors, principally the eight per cent. debenture holders, who shall become the new stockholders of the company. By generous appraisement of the interest of the present stockholders a small proportion of the new shares is alloted to them. No legal relief in any kind of proceeding could do more {for the creditors and old stockholders than is accomplished by this plan, namely. the conveyance of free assets of the company to them. The pos sible retirement of a portion ofthe new stock and reduction of the capital in the future is left to the holders of the now stock to be exercised with uniformity.
Since the corporation hay been under trusteeship pending reorganiza~ tion, the trustee has untangled the affairs of the company and has man~ aged its business with rare ability and Adelity, so that now the China Realty Company is a going concern in an excellent financial position. It ap. ears reasonable to expect that with Continued wise management under which the company would. be con= ducted as 9 reputable, conservative and conventional real estate rin it should corn fair profits and its stock should have substantial value, Under the plan the court will name a board of directors of its own choos jing to serve until the next. regul {with the sale of a diamond ring, was to have paid a deposit towards expenses to the extent of $5,478 war turned down inasmuch as that the court only demanded of the plaintive to deposit $400, on the grounds that, the foreign plaintiff, a Spaniard, was not subject to the jurisdiction of the French Court.
The case, az will be recalled, first came before the French Consular Court on May 20 when M, Premet told the court that his client invoked article 16 of the French Civil Code which provided that, in general, any foreign' Paintifl sting a French' subject is compelled to give a security: for covering costs. and damages which might result from the ease for the defendant. the present case, M, Premet contends article applied and that the costs in question must in= clude the cost of any act of procedure which the French defendant is compelled to take in his defence.
The purpose of plaintit's petition, Premet contended, is to obtain payment of $2,000 representing the Dalance of the cost of a ring which the defendant is alleged to. having sold for plaintiffs account, but the written demand is so. phrased rive to understand that the defendant defrauded Uwe plaintitt by refusing to hand over the price of the ring jer having sold same. Such a claim, the defence alleges, is highly defamatory and demasting to. the commereiat character and name the defendant and besides is based on false facts.
Demand was therefore made that total sum of $5.478.00 be deposited the court within ten days. $470.80 being the estimate at the costs and $5,000 the—eventuad damages. the Court, in Ko judgment of May gor as of the opinion, however, that {Pis"posible to surmise their shout Bhat i pesable to foresee which Costs wit! beat the" charge' of the Setendant god which, tthe hare Sethe into Plat. Teanga presented by Be. Powe Fein was orator ordered 16 my no th court an adatonal 850" bocndded Yo the S150 already cos of Gir motion bein his appeal to the, Plex conamber" of the. Court of Appels Ga, Indo-China dated due Sutendant "contends" thatthe Aes our nas wom ictusd, (0 order coolen plinu to. tunis fecurly for the. damages muling {Som the ease and that rep 10 the ptenck Gil Code shoud apply Me present eas, there belt ald coo to except the plant Fort {eM Euatormare tha dhe take Soto cout ting a. motion for Steury i of to appreciate Mise selion the ranch defendant ieee climing damaned, Being suniont for the French dee fondant indeate tha he un een aamagen ster on, for the Sure ender the sour First Special Court
Text read from the printed page and cleaned; old type leaves the occasional error.