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(Continued From Page One.) Final Drive Launched to Reopen Bank the reorganization to proceed. This plan being presented in detail to depositors the closed bank. with request that they subscribe to stock from funds now tied up in the closed institution. the response is sufficient, it is said, opening of the bank is assured and can be rapidly consummated. pointed out in the statement of the committees, which is being mailed to all depositors, that an opportunity offered whereby, through making subscription stock in the new bank. they will be realize im. mediately more cash returns, plus the which they will hold, than they will realize the event liquidation of the bank becomes necessary. The complete text of the letter to depositors Corpus Christi. December 1932. To the Depositors of The City National Bank Trust Company The Comptroller of the Currency, Washington, granted an tension ninety days' time. from October 1932, which secure stock subscriptions, perfect organisation, complete all details, and secure charter for new bank to replace the suspended City National Bank Trust Company of Corpus Christi, Texas, be organized in accordance with the plan outlined by the Comptroller, which is follows.
Comptroller's Outline Relative the proposed reorganization City National Bank & Trust Company of Corpus Christi, we are outlining tentative plan that will looked upon with favor carried successful conclusion. course, upon the fulfillment all its details. The plan contemplates the reorganization of new bank to capitalized $100,000 with paid surplus fund of $25,000 and be headed by management and directorate satisfactory this office. Following its organization the bank will make proposal the receiver the suspended bank purchase under proper court order such assets as will be acceptable to the directors the new bank and payment for the assets purchased made by opening lump sum credit in the new bank in the of the receiver for the benefit of the creditors of suspended The receiver in turn will declare first dividend in the amount the said lump sum credit and will pay same by dividend orders drawn against said credit in the bank and made payable the creditors. The orders, while nonform, will be payable credit on the books the Under this plan continue of nonacceptable assets and collection of stock and distribute proceeds such liquidation in form of additional future The new bank can be given the privilege substitution for period one year which will serve collateral pledge of all able assets the bills receivable purchased by the new bank. This plan does not involve the solicitation of creditors for waiver agreements and obtains for them the immediate the present liquidity bank, the subsequent full liquidation value assets. and in addition thereto, the collectible portion the stock assessment which they are legally entitled. No credifor creditors in any ferred and the plan can consummated as quickly new bank can be organized and capitalized, the obtaining of the essary court order only matter of hours' time. The first steps be taken in this matter are the subscription capital stock and surplus, the ganization new bank, the amination of assets by the proposed directors of the new bank for the purpose of selecting the acceptable assets, after which this office will prepare the contract of sale and the proper court order to be used the As under this plan the creditors can their demand payment in cash of the deposits being assumed by the new bank, require that commitment be tained from the regional office of the Reconstruction Finance Corporation for loan upon all assets purchased by the new bank, sufficient in amount to provide for the full payment of all liabilities assumed by One of the strongest features of this plan is the paychological effect has on the deposits assumed. This feature does more toward the confidence than any other form of reorganization. After the examination of assets has been completed as heretofore mentioned, we will require you furnish projected the old bank. the made and the setup of the new bank will appear following the this This information should be accompanied with copy of the commitment made by the Finance wherein they agree to loan the bank sufficient which with the cash on hand, will permit the full of all deposits being In anticipation of your ability to perfect this plan within able time, in no event is exceed ninety days, are Inclosing herewith blank form application for charter, together with instructions, which should be properfilled out and returned this office soon becomes apparent that the capital structure can arranged Owing the fact that the subject bank has been in receivership for almost year, urged that steps connection with plan reorganization facilitated much possible. Please keep us advised from time to time as to the progress being made.
Very truly yours
H. GOUGH, Deputy Comptroller. We have been unable to raise this capital stock, except for small amount, from people not depositors the old bank, and we giving the depositors opportunity subscribe for stock, payable out of their deposits the old bank. Some already agreed to do and, in fact, several have agreed use the entire net amount of their deposits for stock. Of course, you will understand that the more stock the depositors take, the stronger the new bank will and each depositor will subscribe amount equal twenty to fifty per cent of his deposit, we will have capital structure larger than that called for the Comptroller's letter. For inshould raise 000, $100,000 would for stock, and $50,000 for surplus, which would make bank that much stronger. and make the book value the stock $150, instead of $125. estimated that under this plan the depositors receive considerably more than they would received under the plan which the Comptroller rejected. This dif. ference the result throwing the stock assessments into the liquidation for the benefit of the depositors under the plan, whereas, under old plan. went into the bank. And then, under plan, there are no preferred For Corpus Christi Independent School District. which hall deposit $104,000 In the old bank, will celve from the liquidation, dividends rate creditors. and will look the bondsmen for balance, thus releasing additional funds for the benefit of all estimated that, if this plan depositor will his credit between sixty and per cent of his deposit the day the new bank whatever amount of stock he has for, and that he will receive from the assets which will still remain the hands the Receiver for dividends aggregating from ten twenty more. The new bank will start off doubtful assets and stock will have book value of cost and should Increase value when times get better. Its management be controlled by Board who elected the stockholders, but must to the We are blank for suband we will ask fill out in an amount not exceedsixty per cent of your deposit, sign and return promptly within the next three days to Box 987, Corpus as our time limited. and if this plan does not go through within the time specified by the Comptroller, we feel that he will grant no extensions, but will order the Receiver proceed immediately with liquidation, to the detriment all concerned. Please subscribe amount which multiple $25. you desire please call either at the Receiver's office in the bank. Both the original Committee and the Depositors Committee have this plan, and are endeavoring to work out together.
Very truly yours. Depositors' Committee: Barry. McKamey. Jas. Hubbard. Jasper Blucher. Harry Wilder. Marcellus Eckhardt.
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