1664-54 Hotels & Tourism •
4
CC"- t&
Dec. 21, 1940.
General Rpbert H. Tyndall,
•
711 North Pennsylvania Street,
Indianapolis, Indiana.
Dear Boba—
•
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 eased to the stock—
holders of the Carl G. Fisher Corporation), and
•there was enclosed a check for $7490.00, made sayable�� ter addressed to you
Trus—
tee --- which I presume to Ro�i H. Tyndall, ��
you will wish to endorse and forward to Margaret at your
earliest• convenience.
You probably have been made awar- of t t fact that Mr. Daniels and an
attorney by the name of Howe were down 'ere re.:ntly; the purpose of their visit
being to consult with the undersigne• :s Exec .or of the Estate of Carl Q. Fisher,
and alio 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 • ar. 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 fro��
value .
of the assets ofCarl's Eswerei`�nsiderablytin�excesswere cofvtheir actualinced that the value,
if one is to consider the Period of t ...e o te th
assets, and taking into • ther cons id ationhthe yfact rth t,eind tthese troublons
times, items which now se:' to have a 'ertain value may, in the not very distant
•
future, prove to have a ve 1 much les/value than they now seem to have. In any
event, it is quite evident .Mr taniels 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
front; but th=-e hotels w ' e not built by those who cater to the same class of
clientele or �1 ats as dY. the Pancoast, Whitman, Shoremede, Braznell, or the Carl
G. Fisher Groups, j:• 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
property owned and/or controlled by the kiami Beach Bay ShoreCompanyl as orgtrds
Fisher Corporation. P � and�othe
And with this condition prevailing,
estate values, particularlyproperty it is very fair to assume that real
d
ocean
front, will, in all probability, decline inhvalue. That onemeans er than that ebut nthe things
L.
. - - r-•-_.-_
General Hobert H. 'Tyndall -- 2.
Dec. 21, 1940.
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
holdings. There is onlywaythey pay taxes on their
and thatgis one can relieve tho ..elves of the tax burden,
by selling real estate; and every time the 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, addre�s�s . to the stockholders
of the Fisher Corporation, you will note that s! -. • �hely 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
Lincoln Hotel properties.
And in the letter which is being tent 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 com out of` e earnings for the fiscal year
ending August 31, 1941, and 67% com- - rom .e sale of assets, and is, as stated,
a "return of investment."
The liami Beach Bay Shore Company.ar- st approaching
whatever, if any, future dividends are paid by them, will havethe to cometf omre the
sale of assets, and not out . ... ... . ngs. So that, every time a piece of
is sold by either the Fish• Corpor• on or the kiami Beach BayShore Company,property
means that we are reducin• the asset�:lue of that Company's stock bypet that
it
much. This is somethi _ which I am . to sure Ur. Daniels and perhaps
y
self have failed to reals e; or, if y. have realized it, haven't
p p ced your-
self
the degree of important which mu•. , be given to it. you havon t placed upon
I am writing you in some .etail on this subject because I dare say that
inasmuch as you undoubtedly have been approached, and may have had some confer-
ences with Dani40:""-'id the other members of the Riley Memorial Association Com-
mittee, and m,,*be further contacted by them, that you will understand
the situatio, is. And while the Bureau of Internal Revenue at the very�firsst that
placed a rat' _r high valu- upon the Fisher Corporation stock, it may interest
you to know at subsequ: tly, and after a most thorough examination they
materially re. ^ed thea, idea as to what the Fisher Corporation stock was worth;
and you may res'-.;w- -d that if they thought there was any chance of supporting
their first idea as to values, they would have stuck to it.
Sof may I suggest that if, perchance
further contacts or conferences with Fr. ' you should have occasion to have anyyou make it very clear to them that there Dian�tsa ysuch or any of his associates, that
the
stock of the Fisher Corporation, which was held by , cher,value as attachedhsb en pre-
sumed by many of those, Including some creditors, ad�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 thu't would be fair -- at least, I have been so informed; they having• been
eAmmuwwwwwmomo
-
i
„ ..
/
r,.
General Robert H. Tyndall -- 3. Dec. 21, 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, P?rs. Fisher, on her behalf beneficiary, and you
as Trustee, have filed claims against the Estate, to th= extent of approximately
$85,000.00; this amount being claimed as being the unpai• balance due up to the
time of Carl's decease on the Prenuptial Agreement, ,chic was made just prior
to his marriage to Margaret, and in connection with whic . agreement yow 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. ' 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 payer
s nt of that amount out of his
Estate, without in any way inflictiny har • p upon any of those to whom he
might at some subsequent date will whe to give; but, as both you and I
know, Carl just escaped bankruptcy at iN e of the reorganization of The Carl
G. Fisher Company. In fact, at that time seriously considered having him go
through bencruptcy proceedings, but were ab : o work out a solution of the prob-
lem without having that stigma attached to his lame.
In any event, I Pin se sur- hat Carl had entirely forgotten about the .,
/ note which he gave to the 'Iley Lieaore 1 Association, because he never mentioned
' / it to me, and I am sure titet, had he recalled it, he would, prior to his death,
have made an attempt to e ect a comprise and satisfactory settlement of that /
item; and certain it is, b all the rjf es of decency and procedure, the Riley
Association should not at t'eam /and under the circumstances, insist upon
their claim being paid in its en ety, and thus deprive Margaret of that to
which she is justly entitled and which, as evidenced by Carl's rill, he very
clearly intende. ""1.7” she should have.
I fee ' hat it is . duty to write you this somewhat lengthy letter on
this subject, because I rs •.lize chat the extent of your influence is in the In-
dianapolis a land what . ssistance you can be to Margaret in doing, or not do- I
//
ing, or saying anythin r'uich will create in the minds of the Riley Memorial
Association Comieee - - . exaggerated idea of the value of the Estate, and what
it will mean to Margaret in the event that the Riley Association should prose-
cute their claim to a successful conclusion. I am frank to say my personal i
viewpoint is that they rill never make it stick; but if they do, by the same ,
token, LargFret's claim of t851000.00eis just as legitimate a claim, if not
more., so, and w%li-unc'loubte:ily be_a1.lewed; so that the claims against the Estate,
and other than the Riley Association claim, are approximately 2100,000.00 as
against the 450,000.00 claim of the Riley Association; and, in the final analysis,
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
of the Estate, after all expenses have been paid, will not, in my opinion, ex-
\ coed $40,000.00, on the assumption that the value of the Fisher Corporation stock
if
/.)
G eral Robert h. Tyndall -- 4. Dec. 21, 1940.
.
is established at the appraised value of ';26.00 ptr ahare.
I assume that you will be so busy with things of a military character
that we dare not going to have the pleasure of seeing you down 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 :ial.i Beach.
In closing, I wish for you and your family not ont a most delightful
Christmas, but I hope that the i;ew Year will bring to yo, and yours a great
abundance of good health, happiness and prosperit
Sincerely,
. R. Huripage.
FRHUAVM