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OCR Page 1 of 5Recapitalization of United States Radium Corporation?
The question herein presented for opinion is:-
"Can the Corporation,with legal safety to itself and to its
Directors, recapitalize its financial structure by distributing a
portion of its surplus funds to Preferred Stockholders?
The question presented presupposes the business desirability
of such a program. It is also based on the assumption that a sub-
stantial majority of the stockholders, both Proferred and Common, will
favor such a plan.
The Corporation was organized in 1917 under the laws of the
State of Delaware. The present eapital structure is as follows:
$7.00 Cumulative First Preferred Stock: Authorized - 4,000
shares of $50.00 each.
Issued - 5,850 shares. Reserved for exchange of $7.00 Cumulative
Preference Stock - 150 shares.
$7.00 Cumulative Preforence Stock: Authorized - 5,000 shares
of $50.00 each. Outstanding - 150 shares.
Common - Class A Stock: Authorised - 16,000 shares of no par
value.
Issued - 14,850 shares, including 1,029 shares of Radium Lumi-
nous Material Corporation Stock not exchanged.
There are certain provisions which specify that in case divi-
dends are not paid on the Preferred Stock, exclusive voting privileges
reside in the Proferred Shareholders.
No dividends have been paid on the $7.00 Cumulative First
Preferred Stock since January lst, 1931, and none have been paid on the
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