Word: sweringen
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Dates: during 1930-1939
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...that rich property is well worth fighting for. During the last year a bitter dogfight has raged between the potent Guaranty Trust Co. and a group of tyro financiers headed by Robert R. Young. Chief bone of contention has been Chesapeake Corp., the holding company created by the Van Sweringen brothers to acquire a 51% interest in the C. & 0. Last week, as Wall Street had long anticipated, the bone was finally buried-in Guaranty's yard...
Immediately above Chesapeake Corp. in the fantastic Van Sweringen pyramid was Alleghany Corp. Robert Young bought control of Alleghany (TIME, May 3, 1937) and proposed merging it with Chesapeake. His idea was that the owners of 667,539 shares of Alleghany preferred-including several potent friends of Guaranty Trust-should surrender their stock and their right to accumulated dividends of $33 per share in exchange for a new type of preferred and common-stock warrants. This plan was thwarted by Guaranty, which held Alleghany's 71% interest in Chesapeake as collateral for Alleghany bonds in technical default...
Louis, Evansville and the soft-coal fields around Cairo, Chicago & Eastern Illinois Ry. is more important than its size would indicate, for it is a connecting link in the great Van Sweringen system. To get control of C. & E. I. after ICC had disapproved linking it with the Chesapeake & Ohio, the Vans pulled off a slick deal in which Paine, Webber & Co. acted as dummy purchasers. A subsequent circumventing of legal requirements, whereby the Vans got RFC unwittingly to pay off an inter-company loan, drew an ICC examiner's admission that "we were made monkeys of. . . ." Last week...
...famed Van Sweringen brothers bought their first railroad-the Nickel Plate (New York, Chicago & St. Louis R. R.)-from the New York Central for $8,500,000. The road made money steadily for 15 years. But between 1927 and 1929 the Vans made a second, less prudent purchase. After a spectacular tussle with the Taplin interests (Pittsburgh & West Virginia R. R.), which resulted in a virtual corner on the stock market, they bought control of the Wheeling & Lake Erie...
Sandwiched between the Chesapeake & Ohio railroad properties and Alleghany Corp., which normally controls them, is a useless intermediary holding company, Chesapeake Corp. (originally the top holding company until the Van Sweringens added Alleghany in order to float more securities). Last week, at last, came the first move to take the cheese out of this stale Van Sweringen sandwich. Chesapeake Corp.'s directors authorized using $2,000,000 of its $7,349,134 earned surplus to cover such claims or liabilities as may arise when the company is dissolved. Concurrently they declared what may be the last regular Chesapeake Corp...