Minnesota, Dec. 2– C. T. Jaffray, president of the Soo Line, and R. H. M. Robinson of New York were appointed receivers of the Minnesota and Ontario Pulp and Paper Company to succeed E. W. Backus, E. W. Decker and Charles W. Fowler, resigned.
Appointment was made by Federal Judge Joseph W. Molyneaux upon petition of the outgoing receivers , setting up a plan of of re-organization of the receivership. Accompanying this was a petition filed by representatives of bondholders, bank creditors and noteholders, assenting to the plan.
The change in receivers is the result of carefully worked out plans after several months of expert surveys and audits of the paper company and its 17 wholly owned subsidiaries, it was explained yesterday. Among these are the National Pole and Treating Company, which now has been put on a sound financial basis by the refinancing of a note issue of $2,000,000 which matured yesterday; and the Institute company which has a mill at International Falls, Minn., that has been in constant operation under the receivership and which has been completed and placed in operation its institute mill in Finland to serve an established market in Europe.
Mr. Backus, directly and through subsidiary companies, owns substantially all the stock equities in the properties involved. By retiring as receiver, he is placed in a position where he can concentrate on the problems of re-organization. Mr. Fowler will be retained as one of the attorneys for the new receivers in conjunction with the law firm of Cobb,Hoke,Benson,Krause and Faegre, of Minneapolis.
“The newsprint paper business has been kept in operation at about 40 percent of the capacity of the company’s mills. Contracts which existed at the time of appointment of the receivers on February 28 were confirmed by order of the court and have been performed by the receivers and new contracts have been acquired.
“The retiring receivers have filled a report showing the consolidated operation of the company and its subsidiaries on September 30, 1931, and supplemental reports will be filed as soon as the audit can be made bringing the report down to November 30, 1931.
“All current obligations incurred by the receivers, with very few exceptions, have been liquidated, the properties have been maintained, the good will of the business has been preserved and the retiring receivers have turned over to their successors a cash balance in all companies of approximately $2,000,000.
“Due to the general business conditions all of the various businesses operated by the receivers have been less in volume than in previous years, both in the amount of products sold and the amount received for them; nevertheless, the amount of earnings has been largely in excess of the loss which would have been occasioned by the general shutdown. All essential and practical economies have been put into effect, including reductions in executive and other salaries. Labour has been employed to the fullest extent possible. All interested parties are working in harmony go preserve this great industrial enterprise for the northwest.”