Show JROESBECK COMPANY An Action Brought Against I in the Third District The Defendant Must Show Cause Why I i Should Not Be Restrained from Borrowing Money The First National bank of Deadwood Dead-wood S D entered suit yesterday in the Third district court against the Groesbeck company The complaint sets forth that between be-tween December 1 1892 and February 1 1893 they made certain large loans to the stockholders of the defunct company com-pany and that as security they hold 1250 of the 12000 shares of the Groes beck company which at par are worth 25 per share The complaint fur ler sets forth that since 1893 the shares have depreciated In value till now they are not worth over 15 a share and that the depreciation is due to wrongful wrong-ful and improper acts on the part of the directors and officers of the company com-pany by which the capital has been wasted and converted to private uses and that the business of the company has been unprofitable I is alleged that about Jan 1 1893 the directors permitted John A Groes beck to convert to his own use seventy shares of the capital stock of the Des eret National bank of Salt Lake city worth 18200 said stock being the property prop-erty of the Groesbeck company at a time that said directors knew John A Groesbeck was hopelessly insolvent Also that on August 23 of this year the board of directors declared a dividend divi-dend of 26716 per cent per share and that 2530 shares of the capital stock were wrongfully distributed as payment pay-ment to the stockholders of the above dividend when at that time the company com-pany had no assets and no property in excess of its capital stock of 300000 and had to borrow 6000 and that the socalled stock dividend was declared and paid in fraud of the rights and interests in-terests of creditors I is also alleged that the officers and directors of the company are at the present time negotiating to obtain a loan for 200000 and that it is their Intention to give a mortgage or deed of trust on the real estate of the company com-pany to secure the same when there is no necessity for borrowing over 79000 Plaintiff also alleges that the loan will be effected unless the defendants defend-ants are restrained by the court and that the other stockholders of the company com-pany would be powerless to prevent their so doing Plaintiff prays that the action of the board of directors in declaring said dividend on August 3 be declared void that all stock issued upon the said dividend be cancelled and that they be restrained from transferring or encumbering en-cumbering their shares of stock in anyway any-way or from mortgaging the property to secure any loan Judge Zane granted a temporary restraining re-straining order and ordered the defendants de-fendants to show cause why they should not be restrained from making the said loan and why the action of the board of directors should not be declared void as to declaring the said dividend The hearing on the motion was set for December 2 |