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Show DICKINSON SUES DIRECTORS FOR INfJILLIONS Receiver of the Rock Island Charges That $7,500,000 Was Wrongfully Diverted Di-verted From Funds. By International News Service. NEW YORK. Sept. 23. Jacob M. Dickson, Dick-son, 11 h roecBver for the Chicago. Rock Island &. Pacific Railway company, today to-day filed In the supreme ooiirt. an action ac-tion to recover $7,.r00.000 from the directors di-rectors of the Chicago, Rock Island & Pacific Pa-cific Railroad comps ny. The defendants include Daniel O Reid, William H. Moore. Richard A Jackson, E. H. Hlne, William T. Graham, Ogden Mills, Edward 8. Moore. Henry U. Mn dire, and George T. Baggs as executor Of the estate of George T. McMurtry-They McMurtry-They are charged with having unlawfully diverted "in their own interest" the sum of $7,600,000 from the - treasury of the railway company into the treasury ot the railroad company to redeem a bond issue is-sue of tl 8 latter company. Deal in Detail. I n a word .His eh a rged t ha t B. F. Yoakum and others bought 289,403 shares of the St. Loujs & San Francisco railroad rail-road stock for $10,?52,fi72 from the defendants de-fendants as directors of the railroad company com-pany and they agreed to redeem a bond issue for ?18, 187.273. In order to raise the $7,500,000 which was required for the redemption, in addition to the sum Yoakum paid the railroad company, the defendants borrowed $7,500,000 from the Chicago. Rock Island & Pacific Railway company and pretended to secure the loan by Issuing $7,00,000 of debentures of the railroad company. It is charged In the receiver's complaint com-plaint that the defendants knew, or might have known with the exercise of ordinary prudence, that the debentures were worthless, as the railroad company was financially embarrassed at the time. Stockholders Wronged. This action, It is further aUeged, was In violation of the rights of stockholders, creditors and of the public interested In he securities Involved. Subsequently the milroad company defaulted when $71,-853,000 $71,-853,000 of 4 rer cent bonds fell due and the Central Trust compa.nv of New York, as trustee, foreclosed on its lien of 713,-530 713,-530 shares of the railway company's stock and wld it at public auction for $7,136,-300. $7,136,-300. A deficiency judgment of $6S,2S9,252 resulted. The complaint alleges that the defendants defend-ants conspired to divert the assets of the railway company in their own interest. in-terest. Reid. Moore and Mills being then largely interested in the bonds of the milroad company and in the stock and securities of the Rock Island company (a New Jersey corporation"), which then owned the capital stock of the railroad company. Statement Issued. The following statement was issued today to-day by authority of the two stockholders' committees of the Chicago. Rock Island & Pacific Railway company: The following seven gentlemen, Edward Ed-ward D. Hulbert, president of the Merchants l,oan & Savings bank Chicago; Charles G. Dawes president presi-dent of the Central Trust company. ChK-ago; John G. Shield of Marshall Field & Co.. Chicago; John R. Morrow, Mor-row, president of the Portland Atlas (.emeni company; Judge Nathaniel French of Davenport, Iowa; William B. Thompson, director of the federal reserve bank. New York, and Joel . Bnrdick, president of the West Pennsylvania Steel companv, have agreed to accept nomination as candidates can-didates for the seven vacancies upon the Chicago. Rock Island & Pacific railway board, which will be filled, at the annual stockholders' meeting on October 14 next, with the understanding understand-ing that there should be no contest for the positions. ' |