UNITED STATES OF AMERICA, LIBELANT, V TANKER MEACHAM AND HER TACKLE APPAREL, FURNITURE, EQUIPMENT, ETC., IN REM.

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP57-00384R001100100064-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 16, 2016
• Document Release Date: September 30, 2004
• Sequence Number: 64
• Publication Date: November 14, 1951
• Content Type: COURTFILE

Approved For Release 2004/10/12 : CIA-RDP57-00384R00110010006.
IN TER UNITED STATES DISTRICT COURT
FOR TEE EASTERN DISTRICT OF VIRGINIA
. NORFOLK DIVISION
UNITED STATES OF AMERICA,
Libelant,
ADMIRALTY zo. tig?
AFFIDAVIT
Tanker NEWHAM and her tackle
apparel, furniture, equipment, etc., t
in rem.
STATE OF NEW YORK
COUNTY OF NEW YORK )
IS.
C.D. SHIM, being duly sworn deposes and says:
I as the representative in the United States of Chinese
Petroleum Corporation, which is a wholly owned subsidiary of
a department of the Nationalist Government of China.
my attention has been called to the fact that the
United States Government has commenced proceedings in this
Court seeking to forfeit the American tanker MEACHAM. I
have been advised that the United States Government eontends
that control of Meacham Corporation, owner of the tanker
..:ZACHAU, was conferred upon certain Chinese interests.
Apparently one of the principal claims of the Government in
this connection is that Chinese Petroleum Corporation
?controlled" Meacham Corporation as a result of a certain
promissory note which was given by Meacham Corporation to
Cniness Petroleum Corporation. The purpose of this affidavit
is to call to the Court's attention the provisions of this
note from which it can readily be seen that Chinese Petroleum
Corporation moat clearly did not and could not control the
debtor corporation. A copy of the note is annexed hereto and
marked Exhibit "A?.
?
S
?
Approved For Release 2004/10/12 : CIA-RDP57-00384R001100100064-1
I Ileh to can the Court's particular attention to
certain more important provisions in the note. The note
was payable in installments over a period of over seven
years. More than this, however, the position of Chinese
Petroleum Corporation was particularly weak in that not only
was the note in essence an income note but could, it would
sem, be extended by the debtor more or less Indefinitely.
In this connection the note provides:
?If the net income of the Corporation, as hereinafter
-defined, shall be Insufficient to permit the payment
in full of the installment or installments of this
note coming due in such year, the due date of the
unpaid deficiency of such Installment or installments
shall be extended from year to year, if necessary,
until the final maturity of this note on February 15,
1957, and thereafter for two additional years if
necessary, and thereafter on mutually agreeable terms,
until the Corporation has accumulated sufficient net
income, as hereinafter defined, to enable it to pay
such installment or installments..
It is difficult to see how e creditor *ho is in such a
weak position as a holder of a note containing such provisions
as the above could possibly be said to ?control' the debtor
corporation.
I understand that the United States Government has .
called attention to the fact that the vessel MEACHA2 could
not be sold without the approval of the payee of the note.
Such a provision in no way places control of the debtor
corporation in the hands of the creditor. It is one of the
routine and con:on provisions in loans desimed to give some
measure of safety to the creditor and to prevent the squander-
ing or dissipation of the debtor's assets. In other words
the obvious purpose of such a provision is to prevent the
debtor from disposing of its principal asset at a ridiculous
price anc thus in effect avoidint its obligation to repay a
loan. It in no way places any ccntrol in the hands of the
creditor over the .4eacham Corporaticn nor does it enable it
2.
Approved For Release 2004/10/12 : CIA-RDP57-00384R001100100T-1
to dictate the Corporation's policies or the operations or
the vessel, Of course, once the note was paid in fell
Chinese Petroleum Corporation would have no further slain Of
any kind whatsoever against the vessel's owner, the Madam
Corporation.
Chinese Petroleum Corporation does not now end never
his owned or had any intorest in any stock of Moadham Corpo?
ration or of shy corporation affiliated with or in any way
related to Aeaeham Corporation. In short, I wish to emphasis
that there was no agreement or understanding whatsoever by
which control of leadham Corporation was -conferred upon or
permitted to be exercised by Chinese Potroloum Corporation
or any employee or representative thereof and that control
of the corporation was not in fact exercised by said Chinese
Petroleum Corporation or any employee or reprosentative
thereof.
Sworn to before me this
4th day of November, 1951.
;1/4
Ncerv
-1.???
krt. ?
Tett Lzpae..- N1.1 - .9.. 1952
Approved For Release 2004/10/12 : CIA-RDP57-00384R001100100T-1
to dictate the Corporation's policies or the operations or
the vessel, Of course, once the note was paid in fell
Chinese Petroleum Corporation would have no further slain Of
any kind whatsoever against the vessel's owner, the Madam
Corporation.
Chinese Petroleum Corporation does not now end never
his owned or had any intorest in any stock of Moadham Corpo?
ration or of shy corporation affiliated with or in any way
related to Aeaeham Corporation. In short, I wish to emphasis
that there was no agreement or understanding whatsoever by
which control of leadham Corporation was -conferred upon or
permitted to be exercised by Chinese Potroloum Corporation
or any employee or representative thereof and that control
of the corporation was not in fact exercised by said Chinese
Petroleum Corporation or any employee or reprosentative
thereof.
Sworn to before me this
4th day of November, 1951.
;1/4
Ncerv
-1.???
krt. ?
Tett Lzpae..- N1.1 - .9.. 1952