N&W in 1904 -- Detroit Southern
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Tue Nov 27 22:11:14 EST 2007
NORFOLK & WESTERN MAY GET DETROIT SOUTHERN
Favorable Opportunity to Secure Direct Outlet to the Lakes
As a result of the financial troubles which have thrown the Detroit Southern into the hands of receivers appointed by the courts, there is now a strong probability that the Norfolk and Western will acquire the road and use it as the basis of a line by which it may secure a direct route to the lakes.
The Norfolk and Western, as is well known in railway circles has for some time wanted a direct line to the lakes and leading railroad men now believe that the present difficulty of the Detroit Southern will furnish just the opportunity the management of the former road is seeking.
Secret and [blurred] action was taken Wednesday in the United States court at Ironton, Ohio, regarding the Detroit Southern railroad.
Upon the petition of bondholders and after a hearing in chambers Judge Thompson decided to throw the company into a receivership.
Samuel Hunt, president of the road, was selected by the court as receiver, Judge Doyle, of Toledo, appeared, as counsel for the railroad company, while Judge Judson Harmon was the legal representative of the trustees for the bondholders. The financial condition of the company was set forth as agreed upon by counsel, and Judge Thompson promptly granted the application for a receiver so far as concerns the railroad property in Ohio, naming Mr. Hunt, who was acceptable to both sides, to take charge of affairs.
The proceedings were surrounded with secrecy, as it was necessary to take similar action to cover the company's property in Michigan. This will be done at Detroit, when a like application will be made in the federal court of that district. No doubt it will be granted. Mr. Hunt will also be appointed receiver by the district Judge at Detroit.
There have been rumors for some time regarding the financial condition of the Detroit Southern. It was the understanding that the company was barely keeping its head above the water. The startling action of Wednesday was precipitated by the inability of the company to pay the interest on its bonded indebtedness, which fell due on June 1. Efforts were made to arrange with the bondholders for concessions, and the withholding of extreme measures on the default, so that the road could continue in operation under the present management, and possibly straighten out its financial tangle in time. Some of the bondholders were willing to accede to the request and hold action in abeyance, but others declined to agree to any concessions whatever. Most of the bonds are held in New York and under a trust.
Bluefield Daily Telegraph
July 10, 1904
[This is further proof that a newspaper reporter's speculation should not be taken as the historical outcome.]
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