OCR Text |
Show Silver King Consolidated Sued hy James D. Murdoch Plaintiff Alleges That Company and Solon Spiro Combined and Conspired to Cheat and Defraud De-fraud Wyoming Stockholders. JAMES D. MURDOCH filed suit yesterday yes-terday in the Third district court against the Silver King Consolidated Consoli-dated Mining company of Utah and Solon Spiro, its president, for stock estimated to bo worth $So00, and to be allowed to participate in dividends amounting to $64,962.75. He alleges that fraud was practiced upon the stockholders of the Silver King Consolidated Mining company of Wyoming Wyo-ming when the company was reorganized reorgan-ized under the laws of Utah. He asks that the court enforce a contract that he, as a stockholder in the Wyoming company, is entitled to have enforced with the Utah company. Mr. Murdoch asserts that the Silver King Consolidated Mining company and its president, Solon Spiro, combined and conspired to cheat and defraud the stockholders of the Silver King Consolidated Consol-idated Mining company of Wyoming of their interest. He alleges that Solon Spiro did, with the intent, design and purpose of hindering, delaying and preventing pre-venting the Wyoming stockholders from exercising an option, cause to be levied a. pretended assessment of 10 cents a share on ail capital 6tock. He sets forth that a letter to this effect was sent to the Wyoming stockholders by the Utah companv, dominated and controlled con-trolled by Solon "Spiro, when the corporation cor-poration "and Solon Spiro well knew that the stock of the Wvoroing stockholders stock-holders was held by Harry P. Clark as trustee and could not be assessed while remaining as treasury stock of the defendant de-fendant corporation. Reviews Reorganization. In his complaint Mr. Murdoch reviews re-views the reorganization of the present Silver King Consolidated Mining company com-pany from the time when it was a Wyoming corporation until it became a Utah corporation. He sets up that at the time of the reorganization and before be-fore that time, Solon Spiro was president presi-dent of the Wvoniing corporation, and that he dominated and controlled its affairs, and that since the reorganization reorganiza-tion still is the president of the companv com-panv and still does dominate and control" con-trol" its affairs. By the terms of the reorganization the" Wyoming company was to convev its a.-sets to the Ctan company for the sum of $34,717 in cash and an "agreement of the Ctah companv to pav all outstanding indebtedness of the YCvamin company and to redeem the outstanding bonds and shares of stock of the Wvomiue company. It was further agreed, according to Mr. Murdoch's complaint, that the Wyoming stockholders should have an option to be exercised before March C6. I lf0?. to exchange their stock lor that of the Utah company share for share, upon their assigning to the Utah com-! com-! pany their ptock in" the Wyoming cem-1 cem-1 panv. And this assignment was to carry I With it the right to participate in the division of the sum of 34.7i7 which was to be paid on aceo.unt of the purchase pur-chase price. All this took place at a stockholders ' oecial meeting hld in the offices of the company at Evan roit. Wyo., on February If. W. Mr. M'.-rdch allege. And at" that same mcctjrj he ap?erM tast it was sgreH de. the property of the Silver King ' nii-n'idafe,l M-.ning eomt'Sny of Wyoming to Harrv P. '"lar of Salt" Lake as trtf-tee for the Si!er King Consolidated Mining company of rtah, which wa about to be organized, upon the condition thnt ho should convev con-vev the same to the Utah corporation wlien organize,! as in payment of its authorized capital stock. Trustee Appointed. The articles of incorpoiation of the new company pro-ided nrnong ! other thing", - Mr. Murdoch allege., al-lege., that Uarry P. lark hi trustee had subscribed for (00.3 shares of stock of the total r.OO."'") -Lares which he was to hodd as follows: n4.n4."2-3 shares as treasury stock to bo held bv the company subject to saie or oth"r diswsitioo bv the directors. The remaining 4 7 1-.'! shares of stock were to If held by Mr. ( lark as tlu-tee. and it. was agreed, Mr. Murdoch Mur-doch alleges, that the Wyoming stockholders stock-holders who exercised their options be- fore March 26. . V.1' v. should have the rif'ht to exchange their V.'vorning stock for that, of the Utah company on the hmi" of share for share, after the stockholders stock-holders had assigned to the Utah com-r,anv com-r,anv their Wvoming holdings, which assignment was to carry with it the riwht to participate in the division of the $34,717. Tt was also agreed that anv shares not transferred for Wyo- ming stock should be held t)v the Utah company subject to sale by "the underwriters under-writers or disposition by the board of directors for the benefit of the treasury. treas-ury. 'Nlr. Murdoch alleges that ho was not present at tho special stockholders' meeting, and that he has never acquiesced ac-quiesced in or consented to the said ' transfer of the "Wyoming property to' the Utah company. He also arises that the said purchase price of $34,717 recited in the said articles and in the resolution as paid in cash was not in fact paid nor has it ever been paid to the Wyoming company, and he further alleges that the recital was a mere subterfuge designed and intended to make it appear to minority stockholders who failed to consent to" the reorganization reorgani-zation that there was paid into the treasury a substantial sum in cash as a consideration for the transfer, and to which they might have recourse in lieu of the assets assigned. He further alleges that it was provided pro-vided in the proposal of sale that as I to every stockholder who exchanged his I stock the assignment and sale should j have the force and effect of his assign-I assign-I ment of his pro rata share of the $34,-717, $34,-717, and in the event that all the stockholders stock-holders of the Wyoming company should exchange their stock the effect of the exchange would be apparently to return re-turn to the Utah corporation the money mon-ey which it pretended to pay es the purchase price. ' To Cheat and Defraud. , Mr. Murdoch's complaint in part ia as follows: That notwithstardlce the premises, tlie wiivl rJpV-m1ant, Silver King Cou-60lidau-d Mining coniDanv of Ulan. contxollM lv- the said Solon plro, and the sai-J Solon Spiro. rombintns and conspiring to cheat and defrawd the BtckaolJers of said W cminc companv of their interests In en id property and in said Wyoming eor-poration. eor-poration. and with the mwnt. dfln and purpose of hlndcrlne. dlaylns and preventing the sid Wyoming companv s:ockho'.'1rs trom xerol?-me xerol?-me slid" option within xhe l:mii. levied, and thn said Solon p'.ro , procured pro-cured to be levied, on the Jttii dav of Ff-braarv, 1H'$, . pretnde-i assts-nient assts-nient upon all of its capital stock of ten cenis pr share; and reojind and demanded of tha srocklild'. ra of t he said Wyoming corT'Oration. as a condition con-dition to the allotting and trans.''T to eald stockholders of their several proportions te shared of the stock in riie dr-iKiidant correlation, that t'ie paid Wyoming btO"khoMers MrM. jmv Hsss3nient of t'n :e'iTs r chare upon each and evry tliarf tM Fto-'k of said Utah corpora M' fo to be acquired bv them. T: a' !"!d Ocnd-uit corporation. Honiir,:'d ai:d controlled, by t.'. caid t'f'.on Kp rn .is aforesaid, bv and tiuo'igh 1'f o:;.:'-r.-. fo --on 'rolled by !d P"Ion .-p:m. 'Ai'.tch ufri-.'-TF were tt,' Mine ofW-i as t!:e officers of the V."oniing .or-porut'.on, .or-porut'.on, at.-1 and p'tf-jft'd to i:-?-ued l-v the a!d Wymlns torr-jra-tion a cir.'ii'ar lerter wttii rep-'.-t to rj!d V-rTlii- . Jidr-3!ed t' th- f.to."k- iK-Mers ,.f the Wo-nt:iL- .--porat l"n. a . p t '.'..li.-h --.ild .-irt'i'.T- riu t wa- sen: l ;ml ya-, ri hv thio p -iitrirt. "'l'.'-h :-rt'd letter - '.n'Ji.ned tho f I J ' tii pr-A.-j- i. . The Letter. "Toil sho i'd ' a-j:oiup-ir.v th.ls a-!tirn;rnt a-!tirn;rnt frerrrrlier to ti.e iiF'ir-n.ent or the v.liti' of f-'tock m I he Wyu-nt Wyu-nt t u ar corpnt'k-n by a reniittan'-" "f ten (-'''Its per f-ll.ir. r.e.'iie th-- wl'l-' wl'l-' f s i-f Ui n"-pc. ration of the rw I ',h :,fMnv pro1. il.- thut no s;-.ck ft .-ornpai.'. s.,ail be rr.r,-f.Trd ..n !.--k9 whi-n iirj-. ftt rn tlin" "f d"i:iand of trn.-f-r jbj-r 0 air.-unpaid air.-unpaid ;i:tC,lii- li! Ie tM l i i er e 1 1 po 11. then-fr.r. Mr. ''i-ik -nnot -nr the ti3iihfer of T he .upb on tn bokM rt the new njn.panv tr .jr pame; and u drault of p- vnient. (lie f.ifj.-k Rlandini,' in ivls pain uh lri" for von vlll i. Mid for non-i'a vinent d the b-s-nieii i which heoniej deli de-li ik) ne n t c n ' a c ' ! i 2", K'"S. I T:;;it f.e.-)i ny- of to iir"i)-Hinent of I trn i-enrs r"C i-harw d- maiM',d fld 'left: ti'ln nt -'orr"" a ' ion b-" paid before be-fore an e.-ht.K-- wo. lid h. perildtted. tiiK p'- 1 1'' -ff t-iH de!;icI aiu iiiKib; to fv-r.-Is' raid ..pt,.in iitlnii th tirifi afo'-.-j-aid. to v It . bv M..fh :'-. l'"-v 'lii:'t )ii tiny piaiiitifT If inforiiie.l nr,. he-w. v.i i i.j'i olhfi" Hot-khnMer:. in alt sto-khoi-l.-rsi hol-lln apprxi-matelv apprxi-matelv ;:tlS- Jluirfl of Him -api- ta( nt'ofl: of :id Wyoming corpora -t ion. w.-re likewise niif d and prevented pre-vented from exerclalnK option by Mar. h 150. TiiHt. none, of s;iM 'nck vna nold mi- nHmpted to be fold for t lie n(.i-p.tmeit n(.i-p.tmeit of a!d as'Mll'Ht. nor wei. f n v prot en 1 1 ii- ii rid-r ha Id h fHn -tiH-ot tal'ii at ail. iht " -i a Bto.-k 't,f'f in -!!'.' ll'llintr ti tlif; P-lid lll- I'i''l aJ-'-jo-nient. Tiiat. on tio con-trarv, con-trarv, on or about the Ttl) finv "f M,,v.' A. T1. 1 r f h! vr Oefenda nt orf.orat ion. ilfimln-' teij and con 1 1 op'-d be tne Id Solon Spiro. and tbn ;ild Solon Spiro, with ttuj Intent to cheat, defraud and deprive thi Bald Wyoming Wyo-ming htf'k holders of t heir Intercuts In paid corporation, pretendlnc: to net lih tfMjicct to the, paid stock to to bp f-xehaneed, ndopte. and pui'-nc-l tbo following i eholutjoii, to wit. The Resolution. "VllTen t, ':,ti -r.-R th res of tb capital Ht".k f thin corporation, now In if n tr;i -nr-,' Mibje. t to cuNi tg Iht underwrite,!-: of tho t'ck of thin ! c'pmi'ii i: '. ; h i id 'Wl-.ertr. It. n for the he..t. Inter-i Inter-i rvif-H of Ihla corponttlr.n to ndl unld Mo.-k to the underwriter thereof, nil of whom jir( repienf'i,tcd by Solon Spiro. tif. aent, at the. purcliann prim nf : er ftha-'e for the, puipowo of enabllMK till" cnrpM-Mlnn pay to tlv. Silver KIHK ( on(,li.Jated Mltilnu coiupa n . a orpor:i 'Ion of W'vomlm;. the bnlan'o of the )u v-1 m m prle fot; ll,.. property of !t corp-.i atlon. latoly , onwved to thin eompmiv; "Now. j:e.ilv,. That thin roin-r.miv roin-r.miv vHI, and It Iock herebv f-'-W to Sol'iii .-pbo. .-ment for the under-writ under-writ l'f of tho i;ln-k of thin emnpatK-, - tun Id 7 ! c.f i r.-H nharen of Hie unili-r wniii ii :.toi'k now In the treasury of thlf. rnrtrMiatlnn al ami lor Hie pin- r (ill ft- prlee NUIII of I 0c per nUil I O. ,ii-.nbic In c;i.-li Upon (hdlvt-ry 'f llm Hto, k. and tli.it 'be oflh ern of thin forpi pa o .' a re lierrhy n u t hor I ,e, ii nil emj.oueiefl to IfBUelh'i ptoek ceiilll-rutin ceiilll-rutin of Ibe '-oftipHnv to ,"nld Solon Spiro, fi;:'Ml. upon receipt, of the mild l.r ti. Hind pep-on, niriit. of hhi idim-k for ihi piireiciH" prh e for paid nhaica al 1'..- p-r : ha,e. "The rn 1 1 1 1 thereupon too): a r-ee:H r-ee:H of thll'tv II 1 1 I M 1 1 e q to enable fin Id Solon Snlro iih a'p-nt to pav the p'ut-fhafie p'ut-fhafie prbr for Ihn U I id i" W I'l I t en fduii-.'H iifrueaid. nnl have Urn (hock i l I i 1 1 i-a I :4 I lierefoi ll-I'Mied til 111 111 II 1 1 HIM I' "Tb" meeting a c n I n vim nied 1 1 i let"),,,, al lb.- esplinllori oT Pdbl tbiltV IllllMllew' time, and II nppe:i-e( 'torn Ih report r.r :Hid f.i re I a i v tlml Solo,, Hpi.o ba,l puibi-d tcl.l mi-Willlni mi-Willlni '.liHi-r, nod bad J i H In tho on point Ion I he pun h,n:.- pi b e t lin e-foi e-foi a t I'll- per :hi:i i f, a ml M hi I a Ml o-'lt ,,.1 t III. a le or i 1 r M 1 1 ' a ' 'i lo, auhl I 4' I .'.-ti Pliar. ' nialei v) 1 1 I --n Ind l.ee,i h-.ued him mm 'i-iHi aKeiii,"' Thiit p'li'euml lo i-.n.l i tlution. Ihe,e WHN then H lid theie .1elV.e. to tin. def'aid.ilit. Solon :'ilio, by rnld d'-'fendant rorporntlon. 7?.10 6-4 s of lite . ap'.'al sto-'k at t': ald 'h':',nd.i:it at.on. T at liii. il t t Spiro f id If:,dant cor- p'.-a'ion n'-iw pr--t--nd tiutt ihn fto-sk (" rtHvrd n .: f 1 1-J teflon Sp'n ii t!: wto-'k rrTP.i bv the rroi-jM n-l-.ition ocrmnt y f ir !a ill and cov-1 cov-1 : i'd hy t-a id option providon. But 'ins iM,iin:itT '.iiittH tno ontiur' t tru". and hlir.-n rht tlfrn in nw In th" trtJi iiy of fraid defendant cor-p.ir.itlnn. cor-p.ir.itlnn. nnd c'T li-o Mid rrratl-iatl'-n tm1 re ban hrn. ample treas 11: v Kio.-k out ..f whl'-h to .itli'y end n'-rfoini th rifan yr.mttd to tn ; Mid ,:u' Mioirl.TH f th" Wyominje I'lirp'T'i'inn iind'T 1 1 r'ri.inizj t'.on ;. p'l'fiin'iil And fh" K:!d ilfndit n t s if-.-t"!i-l That tK .nil .SnJ.in Uplro paid Ini.j li.afii-y nf t!ie Ml,J Wyfl. n i'iT ' poiHtlon (1. amount of Mild pui ' li.if- prl'- of tm cnts per ohnio n nd Ci.it Cm only rmd'- (o w hl-h thin plitirCXf nnd th" other ttto;k-1 ttto;k-1 1 1,. j i-r,t .'in t-ntl'ld Is to pro rate In tin: ni"iin nn rlalmed to M paid Into t hn 1 rra snry of t he ha Id V"-oniing rorjwira t Inn 1-y tho sind defendant. Sf .Ion piro. But this piainttrT rharifcs tli" lojitiiirv in ho true and Jillrg.-s-th it the nold Solon Spirn .lid not f,,( v jnto f iffiMirv of Mid Wjo mlm: 1 ornr. ration tlf mm of J72l is, or unv 1.1M thrrnf. hut nn the roti-t roti-t igry, In t'r:ind of t lie r Ik hi I; of th ftO'-khnld'TH of tlio 'oniinr corpoia-tion corpoia-tion .ind I Hi tii Intent and ilrnlun 10 n'.jt ami clfr.md the Womlnc -o:npn ny r-' (KklloMT;! ' 1 1 T H I so the. t 'I nil 1 nrpora 1 ion, the said Solon Spiro ddlverd ovr to the treHiirnr of y id tin- Silver KltiK Cont'd Mai 'd Till nl n rompHiiv. a Wynmlnir rorpom-t rorpom-t inn, Ills ch"'k for said mini, wed knowing thnt he hud no funds In hunk to ni-pf n.ild chrk nnd thnt n.ihl il.'k h.iH nvnr hen pld mid flint no puiii w h;itnor h.in rvr Nen pw!d hv t h ?.tiid Solon ,yplrn either to tht d''feudnnt ' ni p'ir;i t Ion or to lh" Wyoming Wyo-ming i-ui pi rn Hon (or nUl h(o k. Facts Discovered. Th.-tt iil't'T dlh'-n vrlnr: tin furls hf-r'-in fi fort h, lrt 1 nrd of for t h ili'l tinm hy tint plulniirc on or nhfiit. t hp numt h of No onilxT, A. T. i!H, thin pin I nl NT. to wit, on the Uth din' of .I;ilMi;H'v. A I. 1 r 1 1-. ItHlolh.Ml ) it n Ktork. n Ih.' yomhiif rorporatl to iit. tho til;'". r-lnin-B lif rtinhrforn rc-fi rc-fi ri r.l (o, ;i inl t f-ndr rd t hn nil 1 11 r to (hi t'lnti rnvporn l Inn, d"ffii'lrtnl herein, here-in, nnd in;(do d'-niiiml upon mi Id I nh rnri'iUHllun llutt hn lw prrmitto.l to lunik" Id Kluck, fditiii' for Mmrr, for plo. k In the I'f r lid:i nt enrpom-Hnn; enrpom-Hnn; find nt H.itd tlnn this plnlnMlT nffr-rod to pn- l-i the f :i Id Sllvrr King I o 1 1 vol h 1 11 1 ' ' I Mliihiit 'onipnnv of 1'hih iiii' 11 lit nil jifi'sninenln wlitrh niliiht Ifi'fnllv lin hiirdriiH ns nt;jiliift Mild Htork Filii'-r Dm of ntild liirornmn- ll'in nrid nfl'nn"l. nnd nUv oflvrs. to do r'.tiltv with rospri't (h'M.'t... Tlui t 1 -v r''ir-oii of t lie u ronr.ful run. In. -I of Dm H-'f'-ndautP In Dm pur-. pur-. D.uhiTH hni nlliW.-loro sti.ln.l. this pin ml Iff Iiiih hnc'ii wlutltv doprlvcd of tli.. viiluft of IiIn Int.'toM m Mild Wvo-niliiht Wvo-niliiht 1 'o 11 1 p;i 11 v ; th.il Dm piopnrtv of lh- dnfi-ndH nl ' "i poiii I Ion rr.'t.ivrd fi oin Dm mi Id W onil iik - rpoi ;i I P i 1 hi of irfiD vii Inn, nnd tin- vn lun of Phi Inl HT'n hnhllin-M In mild .'..mpiinv In hI Iriuil Dm Minn of J.s.Mm. no. Thnt I 1 1.1 n in vm iiiTi'in'd upon said Mndi I II 1 K '' MUHI-" III dlvlil.Mlil'l, to V II. M Minn Jippi-nvlnuithu; fi I. 7 "lid this pl 1 1 1 1 1 1 IT In I'tillll.-.i o pa 1 1 1 rl pa t o In h;.M .Ih idrinl.1 and lo t.o puld not only Dm vahm th" Ftt'di hut I Idlllon 1 1 if a un in n I - u 1 1 h'h I in v Imnu ni 1 ti'tl ir..n. I IimI Dm i.lalntiir Ih rnllDid lo ..M-i-.d-.. hi- tun.) nl.mlloi, and np t ion , or loiould II Mimn r upon 11 1mm 1 - Dia l II In linpo ndhlo for pa Inl tfT ) 1 1 pi'i Co 1 in mi Id up! Ion a Ki f'i 1 if nt a i 1 1 . 1 , D1111-. t ho, 1 Dm I Dm hi. Id mi poi n -lion Hhoiild pnv o f r lo hhi plaiiilllT Dim vmIiio of Ilia Mild Hlork of whhdi hf Iuim hf.-ii unhiHllv ih'pi Ivnl 11. 1 j (.rmfniild. |