[No. 2005] IN THE MATTER OF PROVIDENTIA, LTD. THE NINETEEN CORPORATION INSTORIA, INC. File Nos. 812-192, 812-193, and 812-194. Promulgated February 1, 1944 (Investment Company Act of 1940-Section 6 (c)) FINDINGS AND ORDER OF THE COMMISSION Providentia, Ltd., The Nineteen Corporation, and Instoria, Inc., have each filed an application pursuant to the provisions of Section 6 (c) of the Investment Company Act of 1940, for orders granting an extension to November 30, 1944 of the exemption from the provisions of the Investment Company Act heretofore granted to applicants and extended to February 2, 1944 by order of the Commission dated January 30, 1943. Since the applications are related and present common questions of law and fact, the proceedings on the three applications were consolidated and a public hearing was held on the consolidated matter after appropriate notice. Having examined the record in this matter, the Commission finds: 1. On the basis of its findings and opinion issued on February 2, 1942, (See Providentia, Ltd., et al., 10 S.E.C. 1111 (1942)), the Commission entered an order dated February 2, 1942 exempting the applicants for a period of 1 year from the provisions of the Investment Company Act of 1940 and on January 30, 1943 entered an order (Investment Company Act Release No. 440) exempting the applicants for an additional period to February 2, 1944 from the provisions of the Act subject to certain conditions and without prejudice to the right of the applicants, to apply on, or before, the date of expiration of said exemption, for an extension thereof. 2. It appears from the record that there have been no material changes in the facts set forth in said findings and opinion of the Commission. 3. The applicants are not now making, nor do they presently propose to make any public offering of their securities in the United States. 4. The applicants propose to continue to invest their principal assets in the securities of companies of the same general type as those in which their assets are now invested, reserving the right to dispose of all, or any, of such securities if at some future time the applicants deem it desirable to do so. 5. It is appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act to grant the applicants an extension of the exemption heretofore granted. Wherefore it is ordered that the exemption heretofore granted to Providentia, Ltd., The Nineteen Corporation and Instoria, Inc. from the provisions of the Investment Company Act of 1940 be and the same hereby is extended to November 30, 1944 provided, however, that this order may be modified or revoked after notice and opportunity for hearing if, at any time, the facts disclosed in the findings and opinion of the Commission issued on February 2, 1942 and January 30, 1943 and in its findings herein should become materially changed; It is further ordered that the applicants report to the Commission all sales and transfers to American nationals of voting trust certificates for the common stock of the applicants, within 10 days after the applicants are informed of such sales and transfers; It is further ordered that the applicants report to the Commission any acquisition of the securities of any American company which would result in presumptive control of such company under the Investment Company Act, within 10 days after the applicants are informed of such acquisition; It is further ordered that the extension herein granted shall be without prejudice to the right of the applicants to apply for a further extension of the exemption heretofore granted on or before the date of its expiration. By the Commission. 15 S. E. C. [No. 2006] IN THE MATTER OF BROADWAY-EXCHANGE CORPORATION, DEBTOR Filed February 2, 1944 (In Proceedings for the Reorganization of a Corporation Under SUPPLEMENTAL REPORT OF THE COMMISSION Since the filing of our original advisory report, dated January 11, 1944, on the amended plan of reorganization proposed by Harry Forsyth, trustee, under date of November 30, 1943, the trustee has proposed further amendments, embodied in a plan dated January 27, 1944, to which this supplemental report is directed. Disregarding clarifying language changes and other minor modifications, these further amendments may be briefly summarized: (1) Holders of second mortgage bonds are now to receive, for each $1000 principal amount of bonds held, the choice of either $12.50 in cash or one share of new common stock, provided that holders who fail to exercise such choice within a time to be fixed by the court upon confirmation of the plan shall be entitled thereafter to receive only stock and not cash. Holders of a single $500 second mortgage bond are now to receive $6.25 in cash and no stock. (2) During the term of the voting trust, salaries of executive officers, directors and voting trustees of the reorganized company are to be limited to 2 percent of the gross receipts of the new company from all sources, except that if no outside managing agent is employed for the building, the total of such compensation may be increased by an amount not exceeding the compensation fixed for managing agents by the real estate board of the city of New York. (3) Funds set aside under the plan for sinking-fund purposes on the proposed new bond issue are now to be paid to the indenture trustee of the issue, but the new company is, nevertheless, to continue to control sinking-fund operations by direction to the indenture trustee. (4) The new first mortgage certificates and appurtenant voting trust certificates, which are initially to be attached physically in the same instrument, may later be detached and separated, but, under an amendment, only upon either (1) the unanimous affirmative vote of the entire board of directors or (2) the affirmative vote of a majority of the entire board and the consent of holders of a majority in principal amount of the certificates outstanding. The amendment relating to the distribution to second mortgage bondholders, generally following the suggestion made in our original report, affords them the opportunity to receive cash in lieu of stock. As so amended, we believe the plan conforms to the legal standards of fairness. The proposal to restrict salaries is in our opinion beneficial, but we believe the suggestion made in our original report that such salaries, excluding rental and management fees, be limited to $10,000 per annum is preferable. The remaining amendments do not meet the objections made in our original report and fail to cure the fundamental defects in the plan. We remain of the opinion that the plan is basically unsound and should not be approved. By the Commission: (Chairman Purcell, Commissioners Pike and O'Brien) Commissioners Healy and McConnaughey being absent and not participating. 15 S. E. C. [No. 2007] IN THE MATTER OF CENTRAL OHIO LIGHT & POWER COMPANY File No. 70-844. Promulgated February 8, 1944 (Public Utility Holding Company Act of 1935-Section 6) ISSUE AND SALE OF SECURITIES BY SUBIDIARY OF A REGISTERED HOLDING COMPANY. Application by a subsidiary of a registered holding company, filed pursuant to Section 6 (b) of the Public Utility Holding Company Act, for exemption from the provisions of Section 6 (a) of the Act of the issue and sale of $4,300,000 principal amount of first mortgage 3% bonds, to be effected through competitive bidding in accordance with Rule U-50, the proceeds of such sale, together with other company funds, to be used to redeem and retire all outstanding bonds, and such issue and sale being solely for the purpose of financing the business of the applicant and having been approved by the State commission of the State in which applicant is organized and doing business, granted, subject to certain conditions. APPEARANCES: Maurice C. Kaplan and M. Morton Weinstein, of the Public Utilities Division of the Commission. Seymour O'Brien, for Central Ohio Light & Power Company. FINDINGS AND OPINION OF THE COMMISSION Central Ohio Light & Power Company ("Central Ohio"), an electric utility company and a subsidiary of Crescent Public Service Company ("Crescent"), a registered holding company, has filed an application, and amendments thereto, pursuant to Section 6 (b) of the Public Utility Holding Company Act of 1935, for an exemption from the provisions of Section 6 (a) of the Act in regard to the issuance and sale of $4,300,000 principal amount of first mortgage, 32% bonds, series A, due February 1, 1974. The sale is to be effected through competitive bidding in accordance with Rule U-50. The company proposes to use the proceeds of such sale, together with other funds in its treasury, to (a) redeem and retire its first mortgage, 4% bonds, Series C, due August 1, 1964, in the principal amount of $3,981,000, at the call price of $106.75; (b) redeem and retire its first mortgage, 32% bonds, Series D, due March 1, 1966, in the principal amount |