When the $7,500,000 Williamsport Wire Rope Co. found itself on the brink of bankruptcy in 1932, Bethlehem Steel Corp., which held 17% of Williamsport's stock, advised the company to go into receivership. In 1937, Federal Judge Albert W. Johnson ordered that the company be sold. He approved a bid of $3,300,000 from Bethlehem Steel, and wiped out stockholders' interests. Bethlehem's total cash outlay in the deal was only $89,000. It paid the balance by turning over $1,200,000 par value of Wire Rope's bonds, and certain bank claims and "open accounts" it had bought.
During...
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