More Trouble for Andy

Three months ago, Shipbuilder Andrew Jackson Higgins Sr. loudly announced that he was going out of business because of union trouble. But he took a strange way of doing it. While he started to liquidate his Higgins Industries, Inc., owned chiefly by himself and family, he planned to form a new company, Higgins, Inc., financed by a public sale of stock.

Last week, the Securities & Exchange Commission dropped a wrench in Handy Andy's plans. It charged that Manhattan brokers Van Alstyne, Noel & Co., specifically David Van Alstyne Jr.*, had sold stock in Higgins, Inc., before its stock registration statement had been filed with SEC. If the charges are proved, SEC may revoke, or suspend the brokerage company's permit to deal in securities. If that happens, Andy Higgins may have to shop around for another broker.

But what caused Wall Streeters to raise their brows in the whole affair was the manner in which Andy Higgins was cashing in by going out of business. Never a big moneymaker in prewar years (Higgins Industries made a net profit of only $31,748 in 1939), Higgins Industries had grown fat on war orders for ships. The stock plan would render this fat into cash.

Under the plan, Higgins, Inc. would raise $9,000,000 by selling stock at $11 a share. Of this, Andy Higgins, his family and his associates would be paid $4,238,000 for the assets of the old company, which are comprised chiefly of machinery, leases on Government plants, inventories, etc.

Furthermore, the new company would be bound to hire Andy Higgins for the next five years at a salary of $80,000 a year. His two sons would be given jobs also, at $20,000 a year apiece. And through a block of 300,000 shares of stock which Higgins Industries would also receive, Andy Higgins would hold the largest single block of stock, probably enough for working control of the new company. Looking at all this, many a businessman wondered if he too should not "go out of business."

* As a result of the charges, Van Alstyne, who had planned to run for governor of New Jersey on the Republican ticket, withdrew.

This file is automatically generated by a robot program, so reader's discretion is required.