The story of Zeloid Products Corporation (Zeloid), formed in 1929, had now reached the mid-point of the 1930s. The plant intended to manufacture cellophane wrap in the former Riverside Mills Nos. 1 and 3 plants of American Writing Paper Company (AWPCo)had not yet started operating.
In 1935, Dr. Charles Hetzel obtained another patent to be implemented in the production of the clear film. He assigned the commercial rights to Zeloid. More shareholders' meetings were held, and the agenda changed from plant opening to dealing with creditors. It appeared Zeloid was in the midst of major financial problems. Without any earnings, paying operating expenses and its debts was tenuous.
20 Shareholders attended a scheduled meeting at the Cabot Street office in July 1936. A proposal was made to transfer the water power rights back to the Holyoke Water Power Company. Sidney Willson, a shareholder and also representing AWPCo, a real estate mortgage holder due a large sum of money, questioned the legality of such a move that would adversely impact AWPCo. Dr. Hetzel was not present at the meeting.
Dr. Hetzel again failed to attend the August 3, 1936 meeting. Several irate shareholders expressed their disgust over Dr. Hetzel and the corporation's vagueness as to its plans.
In late August 1936, Dr. Hetzel again expressed that there were ongoing discussions about refinancing the debt with a New York financial house. He offered to buy back the shares of stock at par value from investors, but the stock could only be sold to him within one year. Holyoke investors paid $10 per share, and the par value that Dr. Hetzel offered was $1 per share.
The topic of Zeloid continued to create a stir with investors, the Holyoke Water Power Company, lenders and other interested parties. It was a legal quagmire of sorts, delaying action to move forward with a remedy.
On May 13, 1938, it appeared an agreement had been reached that the real estate would be purchased by Jeremiah T. Downing of Downing and Downing, Inc. and Henry Jarisch Jr. of United Paper Box Company. It was expected that the issue of mill rights would reach a compromise solution with the Holyoke Water Power Company.
On May 17, 1938, 4 days after the anticipated purchase was reported, fire destroyed much of Zeloid's mill complex. The city had a tax title for unpaid real estate taxes exceeding $50,000. Dr. Hetzel indicated that machinery imported from Germany, uninsured and valued at $40,000, was lost in the blaze. The fire inspector indicated that, as two other suspicious fires occurred in Holyoke several hours later, the fire may have been the work of an arsonist.
In May 1938, the remnants of walls were torn down by the fire department for safety reasons, and shortly thereafter Louis Belsky purchased the bricks for removal. In 1940, the remaining debris was carted to Chicopee as fill to strengthen the riverbank.
By 1943, outstanding real estate taxes over 12-plus years totaled $65,000, with an additional $35,000 in interest.
After many of the legal wranglings had been resolved, the Massachusetts Supreme Court ruled the property belonged to the City of Holyoke in 1944. The following year, the remaining Zeloid buildings were razed. In 1947, the land was sold in two separate transactions to Mt. Tom Box Company and Holyoke Wholesale Grocery Company Inc. The city was finally able to pay off the tax title loan owed the Commonwealth of Massachusetts.
After 18 years, and not a single day of production, the story of Zeloid was over, providing a cautionary tale of the financial risks that may befall investors and a municipality.
Citations:
Newspapers.com (paid subscription): Citations: Holyoke (Massachusetts) Transcript & Transcript-Telegram; publication dates and pages are shown.
Ancestry.com (paid subscription): Price & Lee, Holyoke, Massachusetts, City Directories
No comments:
Post a Comment