OCR Text |
Show D. & B. OliO M. PJIY MERGE Permission to Buy 95 Per Cent of Roads' Free Assets As-sets Is Indication. M'ADOO IS INFORMED Loan of $600,000 to Pay Bond Interest Is Significant. Complete reorganization and remerg-ing remerg-ing of the Western Pacific, Denver L Kio Grande and Missouri Pacific roads into one system is the result looked for by local railroad men out of the present J f i o Grande receivership proceedings. Color to this is lent by the announcement announce-ment here that the Western Pacific has made on offer to purchase at Uo per cent of their value the Kio Grande's free assetn. and that tho federal eourt at Denver has approved tho offer. The offer was rondo in tho federal court at tho timo of toe proceeding)) to enforce (tie $."S, 000,000 judgment of tho Equit-ii Equit-ii bio Trust company in behalf of the Western Pacific, and which resulted in tho appointment of a receiver for the Jtio Grande road. The offer, which was made by Attorney Attor-ney John V. Howie, counsel for the trust company, id the recent proceedings, proceed-ings, must receive the approval of Director Di-rector Genera William G. llcAdoo of railroads before it can be finally accepted. ac-cepted. Action by tho director general gen-eral on the matter is now being awaited. W. P. Seeks Free Assets. It is pointed out by local railroad men that tho Missouri Pacific first went into the hands of a receiver and 1 lien emerged. Subsequently thuo Western West-ern Pacific went into receivership and now it has emerged and becomo a strong factor. Through action of the V este'rn Pacific the Denver & Rio i Lrnnde has new been forced into the hands o a receiver, and following close upon the heels of this action the Western West-ern Pacific is seeking 1,0 purchase practically prac-tically all of the road's free assets. These assets are appraised at about $J,000,000, it is stated. The V 'stern Pacific is sockinc to secure these assets as-sets at !lo per cent of this amount. Another factor ir. the matter, which is looked upon as significant, is the recent offer of the financial department depart-ment of tno Western Pacific to loau the Denver & Kio Grant!" $600,000 from its surplus to pay interest on the bonds upon which the $3S,000,000 judgment was secured. Significant Step. Mr. Bowie, counsel for the trust company, com-pany, is qtio'cd as having this to say relative to the offer to purchase the free assets of tho Denver & Bio Grande: "Permission by tho court to buy these underlying securities of the Denver Den-ver & Kio "Grande at 95 per cent of tnoir appraised value of $2,000,000 is, in my opinion, a most important process of sii'-nring the control of the Denver & Kio Gran.'o Railroad system by the Western Pacific. "This order of the court strengthens ' the position of the Western Pacific bondholders tremendously and puts lhcm in a lar better positiou to enforce the judgment of $38,000,000 which was decided in favor of the Equitable Trust coiupanv, which represented them in the proceedings before the United States circuit court of appeals in 2ew York. Underlying Securities. "The particular assets of the Denver svstem which the Equitable is buying to strengthen its judgment, consists of Liberty touds, bonds of the Utah Euel company, bonds of the old Eio Grande Western, improvement bonds of the old Denver & Kio Grande Railroad corn-pan corn-pan v and P. block of the Rio Grande & ftouthwesU-rn 4s that have been in the Denver treasury. "These are underlying securities and their possession puts the Western Pacific Pa-cific people in a far better position than that of the mere stockholders of the Denver & Kio Grande. "Beyond all question, this decision marks ' a very import-ant development in the case, which may ultimately result re-sult in the passing of the Denver & Rio Crando into the t'ull possession of the Western Pacific." |