To American Businessmen; Best for Creditors Shanghai, Jan, 23.
PTER five years in trusteeship the Asia Realty Company, Federal Inc, U.S.A, yesterday passed into the hands of Messrs. F, P, Bills and George Bourne, local American business men, when Judge Milton J, Helmick, in the United States Court for China, accepted the plan of reorganization of the insolvent company promulgated by the Trustee, Dr, George Sellett, and confirmed the sale of the company to the bidders for $1,745,000. In dismissing the objection to. the plan raised by a group of debenture holders and preferred shareholder: represented by Mr. N, F, Allman, the Judge ruled that the debenture holders were not affected by the plan of reorganiza ion and that the stockholders had no rights because the company was in solvent, In his opinion Judge Helmick stated that it was for the general interest of the general whose interest was held to be para mount by the Court, that the plan be adopted. three years certainly, and objected ing's hearing, ME. 8. Franklin, who 'At the opening of yesterday morn= that no plan had been filed and reasonable time had elapsed and the Dlher debenture holders, withdrew an Hebretented'Mte, MIN, Spelman' and company should be liquidated, would probably have been sustained by the objection which had been previously Court, However, the matter has been fled by" his ellen aflowed to. go" along under the Sie. Ne Fe Allman subouttted thal, in Trusteeship which has probably "been view of the changing land values and a very fortunate thing, and although the rising. veal estate markets. the pian comes in very late, it should Shongials the company continue not for that reason be exeltided. The function in the hands of the Trustee Court is of the opinion and finds that for another year. This move, Ne said, the company is insolvent in the real would not affect the debenture. Wold "bankruptey sense and in the equity Tis bu would bennet the stockhold-Sense that the company cannot pay era, TE the assets were realized, he its debts. And if the company is me contended, the stockholders would solvent th stockholders, of course, more than they expected and he have not an iota of interest and it Sbmitiea hat ifthe company. were would be grossly improper for the Feasonably solvent the Trustee should court to award them any interest or tarry" on for one more. your. INF. worry a treat deal about their rights. Amo said that the assets' of, the So long as the company can't meet its Company had. been undervalued obligations, so long as it can't pay its Satoste, or by 18 per cent, by Dr. debts, the stockholders haven't much Interest and the Court's concern Company Short fof course, for the creditors Dr, Sellett, addressing the Court, fous sorts. said that the company: was $2,647,214 Not Atected Short of paying the unsecured cre 'The debenture holders are appar-Gltors if the Court allowed 6 per cent, ently not affected by the plan Interest o June, 1939. 'Thus, he said, their position is unchanged. 'They the undervaluation of the assets retain' the same security they have would have to be more than this sum always had and the same legal rights Before the shareholders would be] they have always had under the same entitled to anything. Regarding other mortgage Instrument or trust deed Incomes of the company, such as the defining their rights. The stockholdmanagement of property and rental have no rights because, as we col Hions, he said that Ge monthly have said, the company fx insolvent. income derived. from. these sources So that it leaves, as I see it, only one Were nieh over than the figure of class of people who are affected by $5000 month quoted by A. Allman this plan-and vitally interested in it, hue, ho eat eld not take Ino namely, the general unsecured eredifeeount the expenses involved in eoltors of whom a great many are loan fecting ents and carrying on tHe certificate holders. Tt should be lither "ates of the company. understood that these loan certificates The boom In rear estate activity in fare not debentures, they are simply shanghai during the lat eight weeks, unsecured promises of the company Sellett said, might ead people ay, the I.0.U-s of the company, in oreest an Increase Inthe property other words. These people, of course, Walhes, but in the last two weeks re vitally interested.—Under this Thought me could detect 0 tightening plan they will receive, as the Trustee eat atate setviy, The com estimated, between 35 per cent. and 40 per ent. The required percent-Fonger than he considered justinable 9 hed. beun in rusiceship Zui ge of general unsecured creditors tu one had sere by Hy in fat has accepted the plan. It might seem thre was lite general ope for the that would automatically. settle it. Uieeuted creditors receiving, any However, 77-B casts upon the Coun thing when the company went the independent duty of scrutinizing the plan for fairness even though Dung the five years the company everybody consents to it, so even vear'in the hands of the Trustee, De. though the unsecured creditors in the Batlelt continued, no creditor ever requisite percentage have accepted it nine forward to request the hgo the court still has to examine it and tion of the company' or to "Kill the ass upon its fairness. jose that okt the goklen eas" Now So the matter pretty much resolves. {ihe company was ina position to pay Htselt into whether these values are the oreuitors 6 per cent Up to due, fair. Obviously the general creditors 18950 Tf the company. would renal are entitled fo a fair valuation and trusteeship for, another year, the the better the valuation the more Creditors might, dv tothe fluctuation they will receive. If the valuation currency. gei more Chinese dollart should by any chance be undervalued BUE was doubutu if they would get te the extent of two million five thore\ money. The general unsecured hundred thousand odd dollars, then Creditors were better off with the 95 the stockholders would begin to have ered pet cents which they. would fan interest. An under-valuation of feailte under the plan of Feorganizatwo million five hundred thousand fon than to sun the risk of waiting would not mean the stockholders have eat on the possibility of getting anything, it would simply mean the moter Ht ie beat for all partis, he debis are paid, it would simply mean TANI i the trusted wat ended by there was enough property to pay ite" plan of reorganaation or any the debts. The stockholders stil bth" pan suggested. wouldn't have any interest. The Court is no expert on real' estate Real Test of Value values in Shanghai. 1 doubt whether The real test of the value of the many people could say with much property, continued Dr. Sellett, is certainty what real estate values what you can get wien you try are in this place at this time. to sell it. Efforts had been made The Court does not believe that these during the past six or eight months values are underestimated to the to Interest people to purchase the extent of two and a half million company under the terms outlined in dollars or anything like it. At the the present plan, dozens of indivi-fast' seasion there was some rather alg had been approached bul to no convincing testimony both at the avail, The price bid at the public morning and afternoon session re-auction on December 27. ($1,745,000) faring the fairness of these values. cannot be ignored and this pi "There hasbeen no independent very clote 10 the Trustee's ovn val evidence presented to this Court of tion of the property. any other or differs Nor bine 'After Dr. Sellett had concluded any witness testified address Judge Helimiek made the that these values are following remarks: auction which was held here perhaps Lam not prepared to state any very would be some confirmation of the Jengthy' opinion this morning. This actual sale market value of this pro~ company hat been in trusteeship for perly. In other words, a test of what fa far longer period than was ever you can get for it when it's put up contemplated by the terms of 77-B of for sale. The general unsecured the Bankruptey Act which contem-creditors seem to. be satisfied with plates a fairly prompt plan of reorg, this plan, with the valuations, "and ganization. Certainly 77-B contemplates that a plan of reorganization Should be Aled within a reasonable time after the petition is filed and the Court appoints a trustee. "As the Trustee has said, any creditor who had applied to the Court in the last the Gouri is satisfied. The Court Delleves it is a fair and equitable plan and the Court believes it is for the best interest of the general creditors to have this plan adopted, and T must emphasize that the Interest of te general creditors is the primary and Regulations for Cargo To Europe London,-Dee. 2, 1939.
As some doubt still "appears to exist in the minds of traders and Jothers as to the requirements of the Ministry of Economic Werfare in regard to Bills of Lading, the Minlstry feels it may be desirable to felarity. the position by Issuing 2 further statement, "There is a prima facie presumption of ultimate enemy destination attach-{ing to all goods, whether originating within or without the Empire, consigned to any European country other than the United Kingdom, Hire and France on Bills of Lading which do not show the name of the setual buy-Jer, not being a Forwarding Agent or other intermediary, of the goods. [Such goods are consequently. lable to seizure as prize and to the delays Jconsequent thereon.
Text read from the printed page and cleaned; old type leaves the occasional error.