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Show $300,000 11 ASSERTS FRAUD III SB DEAL West Cache Sugar Company Com-pany Files Action Against J. A. Hendrickson and Lorenzo N. Stohl. COMPLAINT ALLEGES CONTRACT JUGGLING Charges Money Wrongfully Taken From the Concern's Holdings Appropriated to Defendants' Use. Suit to recover 299,702.S5 was instituted insti-tuted yesterday in the Third district court by the West Cache Sugar company com-pany against J. A. Hendrickson of Logan Lo-gan and Lorenzo X. Stohl of Salt Lake, promoters and organizers of the company. com-pany. . j It is alleged in the complaint that $199,702.85 was fraudulently abstracted from the company's assets by the defendants. de-fendants. The additional $100,000 is asked as damages for asserted impairment impair-ment of credit and financial embarrassment embarrass-ment and difficulties caused the plaintiff plain-tiff by alleged ( wrongful and fraudulent fraudu-lent withdrawal and abstraction of the bonds, stocks, moneys, credits and funds of the plaintiff." The action was filed by Ernest E. Woolley, president of the company, who recently took over control of the West Cache Sugar company by acquiring acquir-ing the interest in it of Jesse Knight of Provo. The complaint alleges that $199,-702. $199,-702. So was wrongfully abstracted from the company's holdings by the defendants defen-dants as part of the consideration for turning over to the company two certain cer-tain contracts, one with the Knight Sugnr company, Ltd. for purchase of the Knight sugar factory in Raymond. Canada, and the other with the Lynch-Cannon Lynch-Cannon Engineering company for dismantling dis-mantling of the plant at Raymond and its reconstruction in Cache valley. Contracts Turned Over. These contracts, according to the complaint, were obtained by the defendants de-fendants as individuals, the first for $175,000 and the second for $185,000, a total of $360,000. They were turned over to the company, according to the allegations of the complaint, at an advance ad-vance of $1U9,000, or for $529,000. To the $169,000 alleged to have been fraudulently fraud-ulently obtained by the defendants are two credits, one for $14,800, on the purchase pur-chase price with the Knight Sugar company, com-pany, and the other of $lo,902.So on the contract with the Lyneh-Cannon Engineering company, both of which credits they are alleged to have held for their own use and benefit, making a total of $199,702.S5, of which the defendants de-fendants are alleged to have defrauded j the plaintiff company. The complaint recites that prior to the organization of the company the defendants de-fendants as promoters of a proposed company to be located in Cache val-lef val-lef entered into contracts on behalf of the proposed company with farmers and beet growers for the growing of beets for the contemplated factory and procured subscriptions to the capital stock of the proposed sugar company, receiving as part payment on subscriptions subscrip-tions for stock a sum in excess of $40,000. Obtained Site. It is further set forth that they obtained ob-tained a site for the factory, water rights, franchises and easements and on or about November 11, 19 1C, entered into contract for purchase of the Knight plant at Raymond, Canada, and for its removal to the determined .new site. Initial payment on the purchase, it is alleged, was made with money collected col-lected on stock for which subscription had been obtained. It is alleged that during the opera- (Continued on Page Eleven.) ASSERTS FRAUDS II SIGlCOIPifOEl (Continued from Page One.) tions of the defendants in promoting the company they represented that "all incorporators, subscribers and stockholders, stock-holders, including themselves, were and would come in on the satne basis, and that no person or persons connected with the promotion or organization of the company had received or were to receive any remuneration or profits whatsoever for service or otherwise and that there was not nor would there be anv "water1' in the corporation. 'The company, according to the complaint, com-plaint, was organized on or about December 28, If.' 16, with both defendants defend-ants as incorporators, and with the defendant, de-fendant, J. A. Heudrickson, as president, presi-dent, treasurer and general manager. It is further alleged that the defendants collected, handled and disbursed the fnuds of the company, and caused to be assigned and transferred to the company com-pany the contracts with the Knight Hugar company and the Lynch-Cannon Engineering company. It is further alleged al-leged that tho defendants, "wrongfully, "wrong-fully, fraudulently, unlawfully, secretly and in violation of their trust as agents, promotors, trustees and incorporators, and contrary to the representations aforesaid, caused the said contracts to be taken bv aDd assigned to the company com-pany for the sum of $529,000. " Paid in Bonds. Of tho total amount of the alleged price of tho contracts to the company, the complaint alleges that $300,000 was made payable in bonds of the corporation, corpora-tion, $69,000 in stocks, and $16U.0()0 in cash, on or about February 1, 1917, Tho defendants are alleged to have caused to be issued to themselves on or about February I $300,000 in bonds of the company and 690, shares of the company's capital stock at a par value of $69,000, and to have paid to themselves them-selves the sum of $160,000 in cash, a total of $359,702. S5, of which amount all save $300, the purchase price of the contracts, it is alleged, was "fraudulently "fraudu-lently and secretly" taken and converted con-verted by the, defendants to their personal per-sonal use and benefit, without consideration considera-tion from them to the plaintiff company. com-pany. The complaint alleges that on May 29. .1917, the defendants, "conniving and conspiring, " fraudulently and secretly, se-cretly, without the knowledge of the board of directors or and of the officers or stockholders, caused to be paid to Lorenzo N. Stohl $55,000 "for an alleged al-leged return and cancellation of $55,000 in bonds of yie company, and that a payment of $50,000 was made to J. A. Hendrickson on June 1, 1917, under like circumstances, "from funds borrowed bor-rowed by the corporation for the purpose pur-pose of completing the construction of the sugar factory' and plant." Woolley Is Silent. This alleged action on the. part of the defendants handicapped tho company, com-pany, it is alleged, and prevented prompt payment of bills, involving it in financial difficulties. Because ofthis. the $100,000 damage is praved, in addition addi-tion to the. $199.702.S'5 which the defendants de-fendants are alleged to have taken from the company 's assets without commensurate com-mensurate return. When he was asked about the lawsuit last night, Mr. Woolley said, "It is all in the complaint. " "Will there be any further litigation in connection with your acquirement of this or any other sugar interests?" ho was asked. "If there arc to be any more suits, I will file them," he answered. "You may say, however, that the West Cache sugar plant is in shape to make sugar, and will take care of all of its beet contracts thia cjw ia ood shape." |