OCR Text |
Show GEM CONSOLIDATEG 1 is iNjrairt Serious Charges Arc Made i Against Hiram Tyree and W. L. Gallagher. SUIT GIVES PROMISE "' OF BEING INTERESTING Tjj M Appointment of Receiver and : B an Accounting Are Among ; Things Asked For. IK Alleging fraud in incorporation and R; subsequent manipulation of tho stock, K., C. C. and W. "V. Wylic, John Pingrcc, ; ; Iffn M. S. Browning, Adam Peterson, I). ( ,- i ; C. Ecclos and M. S. Pops brought suit . Mb, against tho Tennbo Mining and Smelt- ' j B ing company, the Gem Consolidated Mining company, Hiram Tvrcc and Vf. : ifj-p L. Gallagher, president and secretary- j L1, t rcasurer, respectively, of tho latter ; Hj company, in tho Third District court ' .Hf Friday for an accounting and to throw ! the Gem Consolidated Mining company : B' into the hands of a receiver. The Gem company, the complaint seta ; utf out, was organized and incorporated ; : L;. with a capital of $2,500,000 for the : i purpose of taking over from tho lie- ; ! ,jv, lianco Mining and Milling compans. a , tif Utah coiuporation, mining property ! J situated in Lauder county, Nevada, for . 0 which 400,000 shares of stock in I ho fjfi new company were to bo issued to tho Ztx 0 several stockholders of tho Reliance Jf,t,- company, in addition to which con- 'WJpXi sideration certain other monoys wero sawA." I to bo raised to obtain title to the lB?r', TJeno, Winneraucca and OUio lode wtQ. 01 claims in the same county and state, ESj'f The corporation, it is set out, was ARtY".0' organized upon the scheme of J. J. V Cusick of ono part. Tyree of another. -'flaffi- B;irt, and Gallagher of another part, le'.? ' ecember G, 1007, Jn accordance with wtvi' the ngroomenf; 400,000 shares ot stock -! of the Gem company were delivered to mff tho Kehnncc company, and by it all BT-T"1 but (3G,G6(J 2-3 shares were distributed mXo( pro rata among the stockholders. Thus tho plaintiffs, being stockholders in tho mVSt Reliance, became stockholders in tho miff Gem company. 9'v Serious Allegation. W. f Immediately upon the formation of M'ju-1 tho Gem. it is charged. Tyree and Gal- J ' V lagher assumed and exercised complete f.0 control, and confederated to use tho,1 !.., stock l'or personal gain and to the detri- '!.f'': ment of the company. Tyree and , Gallagher, it is alleged, issued the en- ; tiro amount of stock and pocketed , ,v- t the proceeds. Tyree and Gallagher 'a'c-i' have admitted, it is charged, that they i w ( sold ccrlain shares, for which there , 'iisn should have been an accounting at f! is 3 the rato of 50 cents a share, but they V vfiui have refused to render any accounting. ' ! They also falsely and "fraudulently r givc out that the stock of the Gem : 7ii-r company, to the amount of S00.000 I shares, 'is issued and outstanding, it is ,pfs' alleged. - fl A Tyree and uallnghcr, it is iurtlior ai- Xytk-leged, Xytk-leged, havo also issued notes and other ? Tip. obligations in Ihe name of the Gem $r i company without authority, and havo 1! ifuin further pledged the. credit of the w iy corporation. Gallagher is a resident of ffsaii Pennsylvania, and two members of tho :'i I) board of directors live in tho same !'ftf"n state. These directors are under the U completo domination of Gallagher and : ictii' Tyree, it is charged, and with them wilal constitute a majority of the board. Iv-fBacl The remaining directors livo in Utah, Ja but take no part in the company's at- ; . yLnk fairs. C. S. Varian, one of the rcsi- iln?! dent directors, it is alleged, has re- ; l X signed and refused to act as such. ; , - The Tenabo company is brought into ! ' ' the suit on the allegation that, under ; ; i1P . an agreement entered into between it ' L ,. and the Gem a few days ago, it P0l,cai will issue to ihe Gem 450,000 shares of uht 1: its stock, of which 50,000 wilLboJie Sin , placed under the control of TyrecanPfoj! 11 Gallagher for tho purpose of Pyin'3BiUjjY,, alloged indebtedness of the coration'yWr-5-V 0111 and the remaining -100,000 wiljin No-Wf'Irfuiif vcmber of 1909, be '"iistributed AjloilwK among the Gem stockholders. When- jEri cver4 this distribution shaw take place m? it will be upon proofs an,'j rcpresenta- Smi tions of Tyree and Gallagher, aud if Morns of they are permitted torctain control Mft I hey will cause to be issued to them-J. n( selves and those to whom they have jEa,ic- '1 caused, fraudulently and unlawfully, to Dhc,'",noii be issued certificates of stock of the ji?yi1nn n Gem company, a largo part of the K u 150.000 shares of Tenabo stock, there- EWcsloo by irreparably damaging the plaintiffs, G,-irdnor lyroc is irresponsible financially, and 'fmtii" .' "Gallagher has no property in the state, t JViMiiuus' it is alleged. ' V Accounting Is Asked. ' sB?.!jnli Tli 03 ask for an accounting, the ap)fife'jrt pointment of a receiver for the Gem m KP ' t-,:n company, who, upon adjustment of the tW" hi valid claims against the company, - ojJor )aj; shall apply them to this indebtedness f L and distribute the remainder amolig , Mm the stockholders legally entitled to the stock, a .judgment; for the amount found 1 K. to be due tho company from Tyree ; I, and Gallagher, and a restraining order I I prohibiting tho Tenabo company from , K issuing to Tyree and Gallagher tho " , " 150,000 shares of its stock under the : ; SatiT recent agreement . ' ; J't'i The Gem maintains headquarters in mh .. Salt Lake City. Tho directors, it is , : gjtli . alleged, do not in any manner partici- .- ! Mmi, " pale in the management ot the com- : ! TfniiV "" pany's affairs, except as permitted to ; : venth ' do so and directed by 'Jyrce -and , ; W,,, Gallagher. The capital stock of $2,o00,- ffl-rtcenth 000 is divided into 1,000.000 shares, 1 fcnti, valued at $2.50 each. Nobody knows 1 g con . the number of shares of stock outstand- gnU inir except Tvrce aud Gallagher, and J R; alteSS I along that line have availed 1J ,1'O -s lmllthH' the comp a nt alleges. " ylio rv."l! su owns -72.000 shnrcs of thisock. and Jjfetos the other plaint ifLs 1333 1-S sWs each. Mm .so.,,,, In this connection Tyree js a1'fejH0 the defendant in aoparatc suit WJgnoe. Brownin- against, him and the GctfW or seen San? to recover $5105.15 alleged tW .$'"igs l,c tie upon a. promissory note beariinT gacclama Mte of May 21. 100S. secured Wflfcjtf. 00 000 shares of stock 111 the KcliavB v Iaou and 50 000 shares of the Gem WftJOJ.e ll0v ii s vet out. In this compluint it fMW(h 0ni.. ,; sot out hat ho Gem is about to trunWj'fal"crshin for its stock to the Tenabo, .n"lfefaudi(hr iP; sum of $500 aro nM- ,,,(J,1(Jt-,d 1c |