Click image to open full size in new tab
Article Text
WAS A STUPENDOUS STEAL. RECEIVER O'BYRNE ON THE LOOTING OF THE SOUTHERN MUTUAL. An Apparent Shortage of Not Less Than $250,000-Seenrities Amounting to $110,000 Disposed of By the President. the Receiver Says, And No Entry Made On the Books-A Deposit of $20,000 In a Defunct Bank All There Is to Show For a Cash Balance of $69,000-Stockholders Will Be Lucky to Get Half. Mr. M. A. O'Byrne returned yesterday morning from Atlanta, where he spent the greater part of last week attending the annual meeting of the stockholders of the Southern Mutual and Building and Loan Association and in investigating the affairs of the association. Mr. O'Byrne's election as president of the company to succeed the defaulting president, IT. C. Hale, and his subsequent appointment as one of the receivers of the association have already been announced by the Morning News. The prominent part taken by Mr. O'Byrne in securing a thorough investigation of the affairs of the association and his subsequent appointment as receiver is very gratifying to the Savannah stockholders, who are very largely interested in the wrecked institution. The Savannah stockholders are nearly all investors, their stock being nearly all matured, and very little money having been taken out on loans. The face value of the holdings here approximates $50,000. According to Mr. O'Byrne, the association is the most thoroughly looted institution in the state of Georgia. To use his language, it is the most stupendous steal that was ever perpetrated in the state. So far as the receivers have been able to ascertain, the shortage amounts to about $250,000. W. C. Hale, the defaulting president of the association, has disappeared, and all efforts to locate him SO far have been unsuccessful. Apparently the greatest steal of the whole business was that of $110,000 of securities of the association, which were disposed of to the Iowa Insurance Company through the Union Loan and Trust Company of Atlanta, which is now in the hands of a receiver. It has been stated that the Iowa Insurance Company paid $100,000 for these securities, but there is not a scratch of the pen to show that the Mutual Building and Loan Association ever received $1 of benefit from this transaction. The only record on the books of the company relating to this transaction, Mr. O'Byrne stated, is an entry in the minutes of a meeting of the board of directors, at which It is said only four members were present, authorizing the president to arrange for placing $100,000 of debenture bonds of the association to be secured by collaterals of the association aggregating $110,000. A well-known security company was to be trustee for the bonds, but it afterward withdrew from the transaction. The Union Loan and Trust Company conducted the deal. No entry, Mr. O'Byrne says, was ever made on the books of the company to show what amount of money was received for the bonds or securities or what disposition was made of It. The transaction appears to have been a somewhat complicated one, and all the details have not been gotten at as yet. The president of the Iowa Insurance Company was in Atlanta a few days before the application for the appointment of a receiver was filed, but whether his visit had any bearing on the receivership is not known. The company was wired for information as to the deal and a telegram was received in reply, stating that a letter to Receiver Anderson of Feb. 8 would give all information desired. This letter has never been received. Another big item of the steal. Mr. O'Byrne stated, was the trust fund of $69,000 in cash, which should have been in bank to the credit of the association. The only cash found in bank was $20,000, which had been deposited with the State Savings Bank, another one of Mr. Hale's concerns, which is now in the hands of a receiver. The indications at present are that the depositors of the bank will get their money, but the investigation of the bank's affairs has not gone far enough yet to make anything a certainty. Then there is another big item of loss, an apparent shortage of $200,000 of real estate loans, which have probably been hypothecated with various concerns. This sum may have been considerably reduced by repayment of loans and credits. For assets the association has $332,000 of securities in the hands of the state treasurer and about $60,000 of assets found in the safes of the company. The securities will hardly realize their face value and may fall considerably short of the amount Assets and claims amounting to about $150,000 are in dispute. The total liabilities of the company, including stock, are $1,130,000. Mr. O'Byrne thinks that the stockholders will be lucky to get back 50 per cent. of the money they have put in. There is no possibility of reorganizing the association and placing it on a working basis again, he said, and the only thing to do is to go ahead and wind up its affairs. The receivership is likely to be quite a lengthy one, Mr. O'Byrne said, on account of the tangled condition of the association's affairs, and on account of the number of legal points which will have to be decided. The relative standing of the several classes of stockholders, of those who have paid in their stock and whose claims against the company are now matured, those who have given I Otice of withdrawal, those who have not yet completed the payments on their stock and the debtor stockholders, who borrowed money from the association. The position of each class of stockholders makes an interesting point which will have to be determined by the court. Mr. O'Byrne will go up to Atlanta tonight for the purpose of qualifying, together with Judge Anderson before Indge
