The Portland daily press., 1884-04-23
SHAW BROTHERS FAILURE.
Serious Allegations of Fraud Made
Against Fayette Shaw
The Application for Division of Assets
Before the Supreme COurt-The Pro
posed Compromise Apparently Fallen
Through.

/
Through.
Boston, April 22.-Jndge Oolburn OF the
| Supreme Court, sitting in equity, heard the
case of the Globe National Bank VS.. Ferdinand
A. Wyman, trustees This is an application OF
the creditors of F. Shaw & Bros. for pro rata
division of such portion of the failed firms as
| sets as have Jeen converted into money. b.
| r. Brooks Esq, for the petitioners, entered
protest against any attempt by any creditor
being allowed to come in and contest the
| proceedings. He would, he said, make it.ap-
| parent that no such intermeddling could be
| tolerated. The answer to Mr.. Wyman, toe
| assignee, was read, setting forth that about
| $5,000.000 of the $6,000,000 of claims have
| accepted the assignments made by the firm.
He holds now about $65o,000 10 cash, which
he is anxious to distribute among the creditors
as soon as their claims are duly proved in
/ court.
Messrs. Richardson & Denny, Fogg Bros. &
Co., E. L. & f. s. Rollins, Julius Adams and
the Phoenix National Bank OF Providence petit
| toned to be Joined to the defendants without
| affecting their suits now pending against #.
| Shaw & Bros. Albert A. Cobb & Co, through
John A. Lowell, Jr., represented that thees.
had begun insolvency proceedings against the
failed firm, and that they should move the
postponement of this equity hearing until the
| insolvency proceedings are finished.
| Messrs. Richardson & Denny in their plea
| or answer make these startling allegations:
| They set forth that the firm of f. Shaw Il
/ Bros. obtained from them by false pretences
| some $4,000 worth of hides. On discovering
/ hn md rdaNr ~ NJ n-
| celed the sale and instituted suit to recover
| They allege that then f. Shaw & Bros en-
| tered into a conspiracy with Ferdinand A.
| Wyman to defraud the creditors; that before
| making the assignments F, Shaw made drafts
| to large amount, raising money which was
| concealed aud which was not used IN regular
| business or for paying debts. Wyman was
| clerk in the employ of the firm and was thor
oughly acquainted with the purposes for
| which the assignments were made The SAL
| ries of the employees were paid for a year in
| advance, and 100000 was raised, some of
| which was used in paying debts to friends and
/ most OF which was carried away. Mortgages
| were made and then Fayette Shaw left the
| country and remained beyond the jurisdiction
| of the courts in order to delay the creditors in
| obtaining settlement. The answer further
sets forth that Mr.. Wyman is possessed of
little property aud that he is making no efforts
| to carry out the trusts specified, but has been
| using every effort to carry out compromise.
| In fact, he has been acting only as an agent of
| +. Shaw & Bros, and aintending to turn over
| all the property to the Shaws as soon as they
have compelled the creditors to agree to COM
| promise.
Mr.. Brooks argued that If dividend be de-
| clared it could not be disturbed. Creditors
must show cause now why they should not be
required to prove their claims now.
Moorfield Story, ESQ.,, for Richardson q
Denny, said that if this prayer OF the petition
| ers was granted, all the pro perty must at once
| be converted into money aud distributed to
creditors who had proved their claims before
| certain day already passed, and that all others
| be debRrred. He denied the power of the
| court to SO order. The hearing on the insol-
| vency proceedings will be held on Thursday.
| There have been many requirements by re-
| quest of opposing counsel.
Mr.. Brooks interrupted With a denial, and
| asserted that the insolvency proceedings had
| been held over the creditors as a menace by
Richardson & Denny for several months
| Some 100000 III claims have been proved
since the last hearing. The total claims
| proved amount to 81 100000 principal and
| $4,000 interest. There ara also claims OF
| about 81 100000 validity of which is doubtful.
| Mr. Brooks represe.. ted 1853 national banks
| holding 300 900 claims, aud those institu-
tons desired pro rata distribution.
Mr.. Story said there were doubts about the
| wisdom of settling the case in insolvency, but
| the proceedings had been kept alive in order
to preserve rights in that direction. Mr.. Sto-
RVS clients believed the estate should properly
| DS Setlleu III Insolvency. Inc Cr6ultorS udu uO
| protection against anything the present 4as-
| signee might do. There is way of finding
| out how many of this vast mass of claims are
| valid. After the assignment was drawn up
| aud ready to sign, Fayetts Shaw sat down and
| created fresh claims against the firm TO the
| amount of 100000.
Mr.. Brooks claimed that Richardson s.
Denny had no valid claim against the estate,
and they could not prosecute the proceedings
in insolvency. The sssgnm ents of #. Shaw &
Bros. to Mr.. Wymsn were recorded as rapidly
| as possible in order to protect all the creditors
against such as Richardson & Denny, who are
| trying to get more than their share OF the
| assets. IL Mr.. Wym4n ia concealing property
Mr.. Brooks claimed that he could be removed
| by the court in one day. Mr.. Wyman is in
| cooperation with the present petition and has
been In close confinement with the committee
| of the creditors since the failure, and has been
faithful to his trust. Mr.. Brooks denied the
| right of any parties is como into tho present
| case who refused to be bound by the result.
William w. Vaughn, Esq, for Mr.. Adams,
Endorsed the pending insolvency proceedings
as the proper mode of procedure, instead of
the special insolvency scheme devise by the
debtors themselves.
M. +. Dickinson, Esq, representing claims
amounting to 100000, argued that if the OBJ
Jecting creditors to the present petition sue
ceeded they would get their claims settled in
| full, while the great bulk of creditors would
receive no dividends at all on their claims.
T. o. Teel, Esq., for Fogg Bros. & Co, set
forth that F. Shaw & Bros borrowed 100000
from that frm on the day before the failure,
firm was worth $4,000 O0 What could be
expected of the victimized firm, Mr.. Teel
asked, under such circumstances Fogg Bros.
& Co at once levisd attachments in Maine
and New York. They had no doubt Of the va
lidty of those attachments, but they did not
wish that action prejudiced by the case here
George W. Morse, Esq, counsel for the
Shaws, argued against the proceedings in in
solvency. The assignment in this case is per-
fectly valid. he held, until an assignee min
soveDcy should be appointed to supersede the
present assignee If the proceedings in insol-
vency succeed, the creditors would probably
ask Tor the appointment of the same assignee
that the Shaws designate. He said that his
clients were ready to give the creditors pro
rata every scrap of property the firm possessed.
The settlement which had been proposed was
for the purpose of allowing the Shaws to
settle the estate because they only can do 1t TO
advantage as the nature of the assets is such
that they would bring hardly more than 10
per cent. at forced sale, while by continuing
business the Shaws could develop it to its
full valne. The compromise is approved By
all the committee of creditors.
Counsel for Richardson & Denny presented
the sworn statement of the bookkeeper OF
| Shaw Bros. q c., showing that in January,
| 1888, the liabilities of the firm were only
$737 900 and assets So, 100000 in excess of that
sum He coDtras cd the experts report of the
| condition on July 18th following when the Ii
abilities we're So, AIS, $40, and that in the inter
i'm the assets of the fran were concealed and
removed. He ms anced Fayette and Braek.
ley ShaW's great interest In the firm of Shaw
Bros. & Cassll OF Men rsal, rich firm. NJ
attempt had been made to get at these assets
The counsel believed that if the estate was set.
tied in insolvency much mere assets would be
found, many claims would be dsproved, an(
the real creditors wouA receive much large
dividend. The assignment Was conceived IL
fraud and is being carried cut in fraud.
Mr.. Hoar, for the Trustees, compared the
opponents of the motion to wreckers WIFI
wanted TO smash in which they would be only
survivors. He was willing to grant that thu
position of Fogg Bros., who ask only protection
OF their attachment, Is tenabe.
Mr.. Brooks, for the petitioners. replied t.
the charge that the assignment is being car
ried out in fraud. He did not defend fraud
committed By debtors.
The Montreal irm in Trouble.
MONTREAL, April 22.-Cassills, Stimson {
| Co., leather dealers, have failed Liabilities
direct, $4,000 and indirect, about 1920 0OC
The heaviest creditors are the Shaw Brother
and Csssijls 100000, and A. Keroach $170
! 600 Csssills, of The firm, is the son.in-law G
J Brsckley Shaw. All the partners are promi
} nent society men and spend their incomes in
lavish manner
LATTER
The Liabilities of Cassills, Ftimson & Co
! leather merchants, are now stated at $346 ,OOl