The sun. [volume] (New York [N.Y.]) 1833-1916, 1892-02-19
THE MOBILE AND OHIO FIGHT.
THE STOCKHOLDERS DETERMINED TO
SECURE CONTROL OF THE COMPANX.


Counter suits In the Alabama Courts Prow-
of Directors Now. In Existence, but tho
Hondho lders Have the CONTROL
Tho controversy between the stockholders
OF tho Mobile and Ohio Railroad Company and
the bondholders who are in possession OF the
property is beginning to attract the attention
of Wall street, now that IL has been carried in
TO the courts. That the nature OF the contro-
ycrsy may he clearly understood It Ia neces-
sary to refer to tho reorganization OF the COM
pny in 1879. At that time thero were issued
frs, mortgage bonds and four classes of-pre
ferrrd income and sinking fund debenture
bonds. As further security to the debenture
,ondhoders the stockholders executed to the
Farmers Loan and Trust Company power Of
attorney to vote the stock as 1t might be d.
rcctrd by tho debenture bondholders 80 long
o. any of the debentures were outstanding.
As these debentures we're merely income
bonds. payable at no fixed date and entitled to
no fixed rate OF interest. and as for period OF
rIuc years no interest had been pnid upon
thnm, tho debenture bondholdcrs In March.
1ssS. conceived n. plan under which the rail-
rond company issued general mortga bonds
tenrrg four per cent. interest. in exchange for
tho ichenturos on n basis agreed upon. BY
use Of the power OF attorney given to the
Farmers Loan and Trust Company this plan
was adopted. and the issue OF general mort
gage bonds was authorized at a stockholders'
meeting called for the purpose.
In pursuance Of this plan, most OF the de-
len,urr bonds were exchanged for 4 per cent.
general mortgage bonds The balance. with
III. execution OF $51.50O. has been surren-
dercd to the trustee under the sinking fund
provisions Of the trust deed. The stockhold-
ers attempted to secure the retirement Of this
small rsmaII,pndiet by having the , company take
fused 70 do. although funds were available for
ssalsns s sf'fHPt 0yss epns
KNAPP and i. s. Nelson. who, were Instructed
it. ffor to the wheS
ha rGesRty Seen b sssxa THE
sn tho TO . at
aDnuaI ,mscting. the par value, OF tthe
sn5. %a By al Of tR IL ea aa hs
therefore decided that the only recourse was
to s1a The Ssntpo St the raond
,0t 's suit has thsrsiore been b. e, in the
s tn votns rust an end
hs to
this action, an Injunction was asked for re-
s 5n at III the mpenns from y' fsS
and enIoining the railroad com pany from re-
fusing to receive the vote OF the stockholders
themselves. This Injunction was granted. and
tn" stockholders prepared to elect q Board OF
Directors at the annual meeting on Wednes-
dav last.
Certain Of the bondholders seek to con-
tinue the voting trust by procuring m order In
another court adjourning the election. That
Injunction. however. while 1t restrained the
officers Of tho company. did not apply to the
stockholders. In caa5equence these last met
in the office. OF the company and attempted to
hold meeting, but were elected by tho OFF,
GERS. They reconvsned in an adjoining office
and elected the fol lowing directors and off,
GERS: James c. Clarke. President. and James c.
Clarke, John II; Prnll. J.. s., Rogers, Warner
Van Norden. William s. Nelson. William ].
Curtis John 8. Nicholas. G.. Bush. David J.
kins Thomas W. Evans. and Harry I. Nicholas.
directors.
William Nelson Cromwell OF counsel for
stockholders said yesterday regarding the
litigation: Our clients are not seeking to
graz u railroad or TO secure control OF prop
erty which does not belong to them. When
the company was in financial straits. twelve
voting power to certain OF its creditors who
have since elected to pay themselves by plac:
ing a general mortgage upon the property and
taking the bonds secured thereby upon terms
sat lsfactory to themselves. We claim that.
under the charter Of the company: the stock
privilege. and that. even II they had. the. ,rea
son for their doing so has ceased to exist Eek
cept as to the holders Of $4,000 OF the de- |
benture bonds which the stockholders are
ready to pay off, In equity they are entitled
70 the infringement OF their property. and. act
have elected Board of Directors and officers
to represent them.'