Buildings

DRAKE TAKEN OVER BY NEW CORPORATION

By:  Al Chase July 23, 1932

National Realty is Now in Control

(Chicago Tribune) - Another step in the refinancing of the Drake Hotel property was taken yesterday when title was conveyed by the Whitestone Company, of which Benjamin H. Marshall is president and Edwin L. Brashears is secretary, to the newly formed Whitestone Management Company for $1,038,500.  This price was indicated by the sum of $1,038.50 in revenue stamps used in recording of the deed.  Mr. Marshall and Mr. Brashears are president and secretary, respectively, of the new corporation.

With the new corporation holding title, the National Realty and Investment Company Interests are now in complete control of the Drake Hotel property.  In this connection, it was announced last night that William M. Dewey, one of the owners and manager of the Edgewater Beach Hotel, has been made a director of the National Realty and Investment Company.

In taking title to the hotel, the new Whitestone Management Company assumes and agrees to pay an encumbrance of $3,480,000, according to the county records.

Stockholders Approve.

Mr. Brashears stated last night that the original refinancing plan, as outlined in the Tribune on May 21, will be carried out.  At that time it was announced that both receivership and foreclosure would be avoided if the owners of the hotel company stock would ratify the proposal.  This was unanimously done on June 20, Mr. Brashears said.

Briefly, the refinancing plan for the Drake provides that in consideration of the hotel property being turned over to the new corporation that body will issue to the old Whitestone Company 40,000 shares of its 60,000 shares of 5 percent noncumulative class A common stock of $25 par and 10,000 shares of its 30,000 shares of class B common stock of $5 par, to be distributed by that company to its preferred stockholders.

At the same time, the National Realty and Investment Company will purchase from the new corporation at par the remaining 20,000 shares of the class B stock.

Seek Extension.

The new corporation, it was stated, will undertake to procure an extension of the principal prepayments and interest now in default, and will assume and agree to pay all of the then outstanding first mortgage obligations with the exception of some dividend scrip issued in 1923.

The National Realty and Investment Company will supply funds to the new Whitestone Management Company, secured by a three year second mortgage at 6 percent and a chattel mortgage on the furniture and furnishings.

Tracy C. and John B. Drake, former owners of the hotel, will receive in consideration for canceling their contract, cash of $50,000, 4,000 shares of A stock and an additional $50,000 over the three year period.

The Drake was erected in 1921 from plans by Marshall & Fox at a cost of approximately $8,000,000 for the land, building, and furnishings.  It has 780 rooms.

 

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