Double Dehydration

When the “huge, dropsical monster” known as the Associated Gas & Electric System was finally driven into reorganization proceedings in 1940, 40% of its billion-dollar bulk turned out to be bookkeeping water. Last week, as the fabulous reorganization was ended, more water was struck. Manhattan’s Federal Judge Vincent L. Leibell angrily said that fees asked by 72 lawyers and assorted utilities experts for the five-year job of dehydrating the monster were themselves heavily watered.

The final bill totaled $2,500,000 (over & above $869,000 paid out earlier). Judge Leibell, who had appointed some of the lawyers, snorted: “Fantastic, grossly excessive.” He cranked the fees through the wringer, squeezed them to $1,200,000. When they are paid by Associated Gas & Electric’s successor, the General Public Utilities Corp., the reorganization will be officially at an end.

Created by Howard Colwell Hopson, at one time a key man in New York state public utility regulation, Associated Gas was one of the most complex promotional extravaganzas of all time. Now, its capital structure deflated, its subsidiaries reduced by sales, mergers and liquidations from 179 to 46, it was thriving as a normal, healthy holding company. But neither normal nor healthy was Promoter Hopson; jailed for mail fraud and income-tax evasion, he went insane, is now in a New York sanatorium.