Selling Stock to Red Springs Mill to Pay Off Debts, Jan. 18, 1926

Small Holders on Same Basis as Directors. . . Directors of Red Springs Mill Offered to Give Up Stock to be Released from Note and Largest Stockholders Offred $10,000 in Addition to Stock—Smaller Stockholders Privileged to Take Stock on Same Basis as Directors

As stated in Thursday’s Robesonian, the only bid received at forced sale here that day for the Red Springs cotton mill property was $150,000 made by Mr. Hiram Grantham for himself and the other six directors of the mill. The bid is subject to confirmation by the U.S. court for the eastern district of North Carolina and may be raised within ten days.

The comprehensive story in Thursday’s Robesonian setting for the events leading up to the forced sale was based upon statements given the reporter by one of the directors and by some of the smaller stockholders. It was the purpose to give a fair and accurate statement, without bias, and that that was done appears to be indicated by the fact that some lesser stockholders have stated that the story was too favorable to the directors and a representative of the directors said the story was not as favorable to the directors as it should have been.

Mr. R.C. Lawrence, of counsel for the directors, states that it was not clearly brought out in that article that all stockholders were invited to come in on exactly the same terms with the directors, who decided to submit a bid merely to protect themselves, after advertising for purchasers in State daily papers, the Manufacturers Record, a New York financial paper, and writing many letters; that this offer to all stockholders is open now.

Mr. Lawrence says that before a receiver was appointed the condition was frankly laid before the stockholders at a stockholders meeting, and that then the directors offered to surrender their stock to any stockholders who would take their places on the note for $180,000 endorsed by the directors, and when no one would accept that offer it was explained that it would be necessary to raise $100,000 additional in stock. There were no offers, and when a receiver was named the only way in which the mill kept going was by an order of the court which permitted the receiver to borrow $50,000. Mr. A.T. McCallum of Red Springs, who owns $40,000 of preferred stock besides common stock, not only offered to surrender his stock to be released from the note, but offered to pay in additional $10,000 in cash.

The directors, as stated in the former article, say they merely bid on the property to protect themselves as heavy endorsers on the mill’s paper, and the offer to let all stockholders come in on the same basis is still open and will be open indefinitely, provided the sale is confirmed, which effectually answers, it is claimed, the contention that an attempt was made to “freeze out” smaller stockholders, who have had the opportunity, and still have the opportunity, to come in on exactly the same basis with the directors.

From the front page of The Robesonian, Lumberton, N.C., Monday, Jan. 18, 1926

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