Liquidating the Common

SEC finally used its power last week to order a utility's common stock wiped out. Victim was New England Public Service Co. (NEPSCO), an Insull stray which has kept going under Maine management since the crash. Two companies previously threatened have started to recapitalize voluntarily on a common-stock basis before the order could be issued. They are Standard Gas and United Light & Power.

With $18,850,000 arrears on five issues of NEPSCO preferred, SEC decided that the common was too far under water to have any present or future equity left, declared the common had no right to keep 74% voting control of the company. Preferred stockholders were given the choice of accepting common in a new holding company or liquidating NEPSCO into its component operating companies. Since some of these are textile and paper mills, SEC suggested that this latter course would speed up integration proceedings under the Holding Company Act.

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