Hotel Decision Likely Today In U.S. Court
- Judge Brands Stacy-Trent
Reorganization Plan As Device -
Trenton Times, January 13, 1947
A plan for the reorganization of the Hotel Realty Company, owners of the Stacy-Trent, was offered today in Federal Court before
Judge Phillip Forman.
The court termed the plan "a device and not a plan." He indicated he would follow the recommendation of the bankruptcy
referee to liquidate the property. However, he withheld final judgement until this afternoon to give proponents of the
plan more time.
The plan was submitted by Joseph Fishberg, trustee, who said that the purpose was to pay off Maxwell Abbell, Chicago financier,
who holds the mortgages on the hotel, and to provide for a substantial payment "over and above the amount of said obligations
to be distributed among the preferred stock holders of the debtor."
William
A. Moore, counsel for Abbell
attacked the plan and demanded a cessation of the prolonged litigation which he said had already taken up entirely too much
time.
Judge
Forman was inclined to agree with Moore and placed emphasis on his description of the plan -- that it was a device.
The plan, he said, amounts to nothing more than a bid for the property. At this time, he announced an order for the
liquidation of the property to be entered. In a final plea to stave off complete dismissal of the proceedings, H. Colin
Minton, counsel for the Realty Company, asked Judge Forman to withhold his final judgement.
New
figures appeared today in the litigation. T. Arthur Karno and Gerald R. Cahill appeared as backers of the plan. They
were represented by Eugene T. Urbaniak.
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Tentative OK Given Hotel's Refinancing
Trenton Times, January 22, 1947
A plan for the financial reorganization of the Hotel Realty Company, owners of the Stacy-Trent, received tentative approval
today by Federal District Judge Phillip Forman. He will hold a hearing on it at 4 p.m. tomorrow.
It will provide for the purchase of all of the company's mortgage and interest note obligations from their present owner,
Maxwell Abbell, Chicago financier. He holds first and second mortgages aggregating $797,000 and non-interest bearing
notes amounting to $219,207.39. The total debt is $1,016,207.39.
Judge Forman, in an opinion filed today with the Federal Court clerk, said he had considered an order for liquidation of the
company under bankruptcy proceedings. Such a course was recommended by Federal Referee Charles H. Weelans after he failed
to find the proposals of the company trustees sufficient to approve.
The plan, which Judge Forman said was to put in form 24 hours before the last hearing January 13, would cover the entire indebtedness
to Abbell and leave $67,710 as an equity to the stockholders.
There are outstanding $697,100 in shares of preferred stock with $100 per value. These stockholders, the court noted,
proportionately own the outstanding 3,493 shares of common stock. There are about 300 stockholders among Trenton residents,
who supported the plan in 1925 to build a modern hotel here.
The trustee, who devised the plan, is Joseph Fishberg, Trenton lawyer. W. Enos Wetzel, company president is the other
trustee. They have interested outside capital. Judge Forman said a $5,000 deposit should be increased to $15,000.
"Since it is contemplated," Judge Forman said, "that all of the indebtedness of the creditor will be liquidated in full in
cash he can have no veto over such a plan. Under it some equity is assured to the stockholders. Under such circumstances
the court is bound to regard it as a plan of reorganization."
He suggested that bidding for the property under the plan should not be limited to the present "interested parties," but should
include such outsiders as the trustees may encourage to make offers.
Abbell, whose State court suit to liquidate the interest notes was held up by the Federal action, is represented by William
A. Moore. H. Collin Minton Jr. is counsel to the company and Eugene T. Urbaniak represents the new capital interests.
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