S. S. "Vestris"
Dear Sirs:
A meeting of proctors for claimants (or claimants) will be held at the office of Messrs. Bighain, Englar, Jones & Houston, 9th Floor, No. 64 Wall Street, on Tuesday, November 29th, at 10 :30 A. M. to consider the following recommendation of settlement:
Sir William McLintock*, G. B. E., C. V. O., the Receiver for the Debenture holders in Lamport & Holt, Limited, has been in negotiation with your Committee for some time with a view to a settlement of the litigation in this country resulting from the loss of the "Vestris". In this connection he has put before your Committee the financial position of the Liverpool, Brazil and River Plate Steam Navigation Company, Limited, owner of the "Vestris", and Lamport & Holt, Limited, operator of the vessel. So far as Lamport & I-Jolt, Limited, is concerned, your Committee has been satisfied that there are existing liens against the property of this Company entitled to priority over the "Vestris" claims for an amount exceeding the value of the assets of the Company. Your Committee is convinced that in no event can the "Vestris" claimants make any recovery from that Company. The Receiver has also put before us the accounts of the Liverpool, Brazil and River Plate Steam Navigation Company, Limited, and has fully discussed with us the priorities of various classes of claims, the value of the fleet owned by that Company, and heavy depreciation of time Company's assets by reason of the present world depression in the shipping industry.
The Liverpool Brazil Co. is prepared to pay £110,000 in settlement of the American litigation. This amount is to be distributed among all the claimants pro rata in accordance with the amount of their claims liquidated in time amounts that may be fixed by the Committee on the basis of the questionnaires supplied by the claimants. Your Committee is satisfied after these discussions that this amount is substantially more than can be recovered in the event the litigation is continued and the Liverpool, Brazil and River Plate Steam Navigation Company, Limited, is forced to realize its assets. Your Committee appreciates that the amount of time proposed settlement is very small in comparison with the damages which can be proven in time proceeding; but your Committee has made every effort to secure a better settlement and is clearly of the opinion that this is the best figure that can be obtained.
If the settlement is not accepted, the litigation in this country will continue, the shipowners' appeal will be prosecuted and very substantial expense will have to be incurred, and a final adjudication can hardly be hoped for in this country in less than one or two rears. This would have to be followed by legal proceedings in England, the length of which it is difficult to determine, but English counsel have intimated that it might take a further two years. Under present conditions it will be realized that the future of the shipping industry and particularly of companies engaged therein is one of great uncertainty. Your Committee also recognize that a realization on the ships belonging to the Liverpool Brazil Company in these depressed times would be a matter of much difficulty.
While your Committee is disappointed that the amount to be received is not larger, your Committee is unanimously of the opinion that it is in the interest of all the claimants to approve the settlement, and recommends its acceptance.
The detailed terms of the settlement are given in the enclosed memorandum, and your Committee requests you to sign one copy of this memorandum and return it to the Committee as promptly as possible so that the settlement may be carried out.
If you have not heretofore supplied the Committee with a questionnaire as a basis for determining the amount of your claim, or if you desire the Committee to consider any further evidence or information in connection with the claim, please send it to the Committee as promptly as possible as it is essential that the Committee should conclude its liquidation at the earliest possible moment if this settlement is to be carried through at all.
* The shipping industry was in terrible shape and Sir William McLintock, a noted accountant, had been involved in other shipping related presentations of bad news that form a background to the Vestris disaster. TIME, on Monday, Monday, Feb. 23, 1931 published an article "Sea Change" that gives an example. Sir Owen Cosby Philipps, Baron Kylsant of Carmarthen had assembled shipping companies and, to quote the article, "looked across the world in his 40th year of age and saw its seven seas peopled by his steamships. First he bought the Pacific Navigation Co. for £1,500,000, then the Glen Line and Shire Line in the far East. He built new ships for the China trade. In 1912 he purchased Lamport and Holt" . . . He was the greatest merchant sovereign of the seven seas. From that hour, as last week's accounting showed, his power declined. Reason: overexpansion, or more technically, too much financing by sales of fixed interest bearing securities . . . Troubles began; profits dwindled. The sinking of the Vestris (a Lamport and Holt ship) did not mend matters."