Otis' Woes

A pressed debtor, Cleveland's Otis & Co. last week moved with rare speed to stay ahead of the bill collector. It closed down its offices in Buffalo and Manhattan, hustled out chairs and desks in Manhattan just one jump ahead of a U.S. marshal, acting for Kaiser-Frazer Corp. Ever since K-F won a $3,120,743 judgment against Otis for welshing on a $10 million stock deal, K-F and the Securities & Exchange Commission have been hot on Otis' trail. Last week, after Otis informed SEC that it did not have enough capital on hand to pay the judgment, SEC got a court order preventing Otis from doing any securities business until it sends its customers a full financial accounting.

SEC also got permission to investigate Otis' books. It wants to find out whether Cyrus Eaton and William R. Daley, Otis' biggest stockholders, have reduced Otis' assets by transferring into their personal accounts securities valued at $3,229,639 which they had lent the company. Otis announced that it would close down its brokerage business this week. Nevertheless, SEC went right ahead with proceedings to ban Otis from the brokerage business.

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