1675-6 Fontainebleau 1
re
r ,
•
Dec. 21, 1940.
General Robert H. Tyndall,
711 North Pennsylvania Street,
Indianapolis, Indiana.
Dear Bobs—
•
There is being mailed to you today, in an envelo:. addressed to you as
Trustee, a letter of even date (which letter is being ad essed to the stock—
holders of the Carl G. Fisher Corporation), ands••w. star addressed to you
there was enclosed a check for $7490.00, made •syable to Ro i H.
tee -- which I presume you will wish to endorse and forward to Marga�retaat,yours
earliest. convenience.
You probably have been made away- 01' 761: fact that Mr. Daniels and an
attorney by the name of Howe were down fere re.:ntly; the purpose of their visit
being to consult with the undersigne• :s Exe •or of the Estate of Carl 4. Fisher,
and also with the attorneys, Loftin, • alkin- Anderson and Scott, who are the at—
torneys for Margaret and yourself as t:
etc.
In the conversations which I had wi • '-r. Daniels and Mr. Howe I was led
to believe that they had conferred with you on '.ore than one occasion and, seem—
ingly — at least, judging frop n= they said = they were convinced that the value
of the assets of Carl's Es i e were •nsiderably in excess of their actual value,
if one is to consider the 'period of to which may be required to liquidate the
assets, and taking into then considt ation the fact that, in these troublous
times, items which now se: t
to have a Pertain value may, in the not very distant
future, prove to have a ve• much les/value than they now seem to have. In any
event, it is quite evident % - Mr�saniels came here with the idea that there
was here at Miami Beach a real - - ate boom in the making — all of which is not
a fact.
It is ue, as you perhaps know, that there is a scarcity of ocean frontage.
Last year the - were 47 n • hotels built — most of them on the ocean front. This
year there : • 41 new hot: s being built, and they also are built on the ocean
• •e hotels w e not built by those who cater to the same class of
Al
front; but th
clientele or sts as d... the Pancoast, Whitman, Shoremede, Braznell, or the Carl
G. Fisher Group ,oN s. The result is that the ocean front area has become
very badly congested. Each one of these hotels that have been erected occupy
practically every inch of ground on which they are located. Such hotels as the
Whitman, Shoremede, and .Pancoast are very much disturbed over the situation, as
they will have as next door neighbors, hotels which cater almost exclusively to
Jewish clientele. However, the demand for and the scarcity of ocean frontage
has naturally increased the price; but that condition does not prevail as regards
property owned and/or controlled by the Miami Beach Bay Shore Company and/or the
Fisher Corporation.
And with this condition prevailing, it is very fair to assume that real
estate values, particularly the property other than that located on the ocean
front, will, in all probability, decline in value. That means but one things
+
General Robert H. 'Tyndall -- 2.
Dec. 21, 1944.
J
that is, that the real estate holdings, etc., of our two Companies, i.e. the
Fisher Corporation and the Miami Beach Bay Shore Company, will not increase in
value. Furthermore, each and every year the cost of doing business increases,
and that means a greater overhead for the respective Companies, and, further than
that, each year, of course, both Companies are required to pay taxes on their
holdings. There is only one way they can relieve the, elves of the tax burden,
and that is by selling real estate; and every time theyy"sell a piece of real es—
tate, it reduces the assets. In other words, whenever ' e Miami Beach Bay Shore
Company pays a dividend, a very small proportion, if an of it, comes out of
earnings. That is more truly the fact at the moment a, regards the Fisher Cor—
poration, for in the letter dated December 14th, address•e to the stockholders
of the Fisher Corporation, you will note that �,.tely 20% of the divi—
dend which was paid on August 10th, 1940, came from earnings'lthe balance, 80%,
came from the sale of one of the major assets of the Corporation, namely, the
Lincolns Hotel properties.
And in the letter which is being sent o with the present dividend check,
and to which I first referred in this -tter, , .0 will note that it is estimated
that only 33% of the amount will con out of4 e earnings
iecal
ending August 31, 1941, and 67% com- - rom .e sale of assets, and is, asyear s ated,
a "return of investment."
The Miami Beach Bay Shore Company.ar- st approachingthe
poinwhatever, if any, future dividends are paid by them, will have to cometf omre the
sale of assets, and not out�,�'y, ngs. So that, every time a piece of
is sold by either the Fish Corpor• on or the Liismi Beach Bay Shore Company,property
means that we are reducing the asset �:lue of that Company's stock byt that
it
much. This is something which I am • to sureh asst that
self' have failed to reals e or, if y. , Lr. Daniels, and perhaps you your—
it the degree of important ;which mu . ' b�eagivene �toZit.ed it' you haven't placed upon
I am writing you in some detail on this subject because I dare say that
inasmuch as you undoubtedly have been approached,
confer—
ences with Dani- r:'"id the other members ofthe Riley Memorial Association Com—
mittee, and m .rbe further contacted by them that
you will the situatio is. And whale the Bureau of Internal Revenue atdthe tvery d first t
placed a rat! _r high valuj upon the Fisher Corporation stock, it may interest
you to know at subsequ:��l!tly, and after a most thorough examination, they
materially re. ^ed theeiidea as to what the Fisher Corporation stock was worth;
and you may res -,;.... :d that if they thought there was any chance of supporting
their first idea as to values, they would have stuck to it.
So, may I suggest that if, perchance, you should have occasion to have any
further contacts or conferences with Mr. Daniels, or any of his associates, that
you make it very clear to them that there isn' t any such value attached to the
stock of the Fisher Corporation, which was held by Mr. Fisher as
re—
sumed by many of those, including some creditors, and even the beneficiary of
that Estate.
Mr. Daniels and Mr. Howe left here with the express thought in mind of
consulting others of the members of their Committee and working out some com—
promise that would be fair -- at least, I have been so informed; they having been.
1
/ General Robert H. Tyndall -- 3. Dec. 211 1940.
as I believe, convinced that they have over-estimated the value of the Fisher
Corporation stock, which is the major asset of Carl's Estate. And, in view
of the circumstances and conditions, etc. , may I further suggest that you re-
frain from making any comments as to the dividend now being paid by the Fisher
Corporation, for I fear that that may improperly influence them in their de-
mands.
As you perhaps know, firs. Fisher, on her behalf : : beneficiary, and you
as Trustee, have filed claims against the Estate, to th= extent of approximately
485,000.00; this amount being claimed as being the unpai' balance due up to the
time of Carl's decease on the Prenuptial Agreement, whic was made just prior
to his marriage to Margaret, and in connection with whic , agreement you• are
the Trustee.
I have no desire nor intention of misleading anyone in connection with
these several matters. However, I am very sure that at the time Mr. Fisher gave
the note to the Riley Memorial Associatio•• Be ad every intention, and was at
that time in a position to, and firmly • - eve, that at his death his Estate
(.\\
would be sufficiently large to warrant ne pays- nt of that amount out of his
Estate, without in any way inflictin ny har p upon any of those to whom he
might at some subsequent date will w: he to give; but, as both you and I .
know, Carl just escaped bankruptcy at .4 .144„, e of the reorganization of The Carl
G. Fisher Company. In fact, at that time= seriously considered having him go
1 through bankruptcy proceedings, but were ab o work out a solution of the prob-
lem without having that stigma attached to his ane. __e. ____
In any event, I em 40 e sill- hat Carl had entirely forgotten about the
note which he gave to the ey Memor 1 Association, because he never mentioned
' / it to me, and I am sure tt t, had he r • ailed it, he would, prior to his death, 1
' have made an attempt to e ect a compr•. ise and satisfactory settlement of that
item; and certain it is, ball. the r•fes of decency and procedure, the Riley /
Association should not at t‘, . .. • and under the circumstances, insist upon
their claim being paid in its ent ety, and thus deprive Yiargaret of that to
which she is justly entitled and which, as evidenced by Carl's will, he very
clearly intende. .'" she should have.
I feel ' hat -it is . duty to write you this somewhat lengthy letter on
i this subject, because I r: •laze 'hat the extent of your influence is in the In-
dianapolis a , and what esistance you can be to Margaret in doing, or not do- , \ing, or sayinj anythin. +uich will create in the minds of the Riley Memorial
Association Coa ;R. - : exaggerated idea of the value of the Estate, and what ``
it will mean to Margaret in the event that the Riley Association should prose- e
cute their cleiz to a successful conclusion. I am frank to say my personal i
viewpoint is that they will never make it stick; but if they do, by the same
token, Vargaret's claim of t85f000.00_ie just as legitimate a claim, if not
more. so, and_,%1j nd.oubte?1y be_a]Jowed; so that the claims against the Estate,
and other than the Riley Association claim, are approximately X100,000.00 as
against the X50,000.00 claim of the Riley Association; and, in the final analysis, i
if all claims against the Estate are established as filed, the best that the Riley i
Association could possibly hope to get would be one-third of what there was in
the Estate; whereas, Margaret would get at least two-thirds; and the net value i
of the Estate, after .all expenses have been paid, will not, in my opinion, ex- ' j
acted $40,000.00, on the assumption that the value of the Fisher Corporation stock �I
•' 9
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G eral Robert H. Tyndall -- 4. Dec. 21, 1940.
is established at the appraised value of ;25.00 per phare.
I assume that you will be so busy with things of a military character
that we ,are not going to have the pleasure of seeing you clown here this winter
season. However, if you can break away long enough, we certainly shall be
glad to see you, and I would like very much to have you come so that you might
more properly get a true picture of what is going on at `iaiai Beach.
In closing, I wish for you and your family not ont' a most delightful
Christmas, but I hops that the i+ew Year w111 bring to yo and yours a great
abundance of good health, happiness and prosperit
Sincerely,
. R. Humpage.
FRH t AVM