Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1895-04-04
Against the Bay State Gas Co.
of Delaware. b.
ISSUED FROM THE U. S. COURT
On Application of a Boston
Gas Stakeholder,
4 Hearing Ordered by Judge wales for
April 18th, on Application for Appoint.
ment of ISeccirsr--J. Edward Addioks
Says That Not a SINGLE Word in the Allie
cations is True.

Upon presentation Of the bill the Court |
made an order 10 the officers OF the Bay |
State Gas Co. Of Delaware to show cause, |
OH April 25th. whya receiver should not
be appointed to take charge of It's affairs,
and pending the hearing, restraining |
order was granted prohibiting the conf
pany from dspdsing OF any OF its assets |
The officers are ordered to appear with |
all their books and papers, and full &c
count of all their transactions SINCE the |
bay State Go. OF Delaware was organized.
The bill relates that the company fruudu- |
lently issued i'll lS03, SlO,0OO,0OO OF new
stock; that II has alnong IT'S assets bond
executed by the Bay State Co. OF Massa-
chusetts to j. Edward Addicks for Sl.SuU,-
600 dated Match, 1895; that the interest on
this bond amounts to nine-tenths Of the
net profits Of the business OF the hassa-
chusetts Co.. and that the principal WINS TO
be paid either in money or stock OF the
Bay State Gus Co. Of Massachusetts; that
among other assets are the capital stock OF
capital stock of the Bay State Gas CO. Of
New Jersey, amount Sl,O00,OOo; capital
stock of the lloybury Gas Co, S6OOC 4
tho capital stock of the South Boston Gas
Co, $40, 900, and the stock of BayStatc
Co. of Massachusetts,, s2,0O0,0Oo. and an
equitable ownership in tho stock OF the
Boston Gaslisht Co, which amounted to
to lien Of first and second series OF the
Boston United Gas bonds, issued ny the
Bay state Co of New Jersey, and counter
signed by the Mercantile Trust Co. OF New
York, amounting to Si2,0Oo,OOo'
LIABILITIES OF lHE COMPANY.
The liabilities Of tile Fay State Gas Co
of Delaware, it is recitcd are to pay per
cent interest OH the Si2,0I0,00O of the
United Gas bonds, to pay the legal eeX
panscs OF the Trust, to pay on annually
so, O)U of the first series OF the bonds, to
pay the floating debt amounting to $780,
UU0. 10 ,ray S2,000.U0U of the income bonds
issued by tho defendant company; to pay
the personal claim Of i. Edward Addicks,
amounting TO about 500, OuU and its own
normal capital stock oil S6,0U0,Ou0 which
was listed on the Stock exchanges OF New
| York and Boston,
| j. Edward Addicks was the promoter
and incorpurator of both the Bay State
Co. of Massachusetts, and its namesake of
! Delaware. lie also raised the funds for
| the erection of the Massachusetts Co.'s
| works after which the Delaware corpora
ton acquired its interest in all the Massa.
| chnsetts stocks. Aidicks was also a
director IN all the Massachusetts, COM
panies and either president or yiee-presi-
dent of each OF them.
| Besides, the bill charges that he had his
| brother, Frederick j. Addicks, elected
treasurer If all the companies, and he Is
| still custodian of the funds Of all of them
except the Delaware corporation, from
| which he resigned recently. The Delaware
company has all the capital stock of the
New Jersey company in its treasury, and,
by reason OF this has been able 10 keen
closely i'll connection with all tho Mussa-
chusetts and New Jersey companies.
Through trust agreement, which gives
the New York company the right to nonii-
nate all officers ana directors OF the Maasa'
chusetts company, which right passed to
the Delaware company when is acquired
the stock OF the New Jersey company.
Between 1891 and 1898. according 10 the
sworn report Of Addicks and the other
officers, the NET earning of the Mnssa
chusetts company WINS 5000 600 annually,
Interest had been paid on the first and
second series Of Boston United Gus bonds
and the income bonds of the Delaware 60
and dividends were declared on IT'S stock
In lSD3 through the gross acknowledgement
of Addicks in the Delaware Co, the earn
ings of the Massachusetts corporation
began to decrease rapidly, and an inYesti
CATION was ordered by the Massachusetts
Legislature The result was the passing
of a bill annulling the charter Of the bay
State Go. unless it should cause the 81, 300,
00D bond given 70 Addicks TO he legal,
delivered up and cancelled. The act, how
ever, permitted the Massachusetts com
pany to issue stock to the owner of thu
bond to an amount equal TO the excess o
the actual market vnlile of the Buy stat
property over lis $1,000 900 capital stock.
A commission was appointed by HI
supreme court under the act, and they MS
sesSed the excess nf the property at - U0u,
uuO An issue OF Sl,5OuUUU OF additional
stock was allowed. In 1898 the Deawhr
Co, through Addcks delivered the 81, 500,
0J0 bond to the Mercantile Trust Co. of New
York, and it was cancelled and delivered
over To the commissioner Of corporation q
Massachusetts. Then the Delaware 20. re
ceived l'oston United tIas bonds amount
, ing to 81, SOC. co.. and the Mercantile TTus
! Co. which held the capital stock OF til
: BAY State Gas Co. OF Massachusetts, held
> meeting of the Stockholders, at which tn
capital stock was increased u, 800 ODD. Thi
was so the bill states, an evasion of IL
law, because the Mercantile Trust 20. wa
= never the owner OF the bond, and i'll dom
! il they took 81, 30U, 900 of the Massachuset,
!; Co.'s money and paid 1t over to that com
y puny in liquidation Of its own debt.
. The bill further charges that AddlclS
/; converted 81, 500, QUU Of bonds To his ow
y use. II also says:
= Afterwards us president of the Delawar
Co., he announced that the holders al til
: income had no interest i'll the hosto
= United Gas bonds, and then he, havin
y and having gone short oi the stock on til
y market, IN order 10 retain control Of III
y Delaware corporation III spite OF the sa
y OF its stock, caused il 10 issue Sl0U00,0J
y more of stock without any consideration
e for the sole purpose OF controlling u
: annual meeting, which was to be held
', March, 1903. In spite Of the fact that !
IL had given up short all stocks in tho Del
ware Co, no caused himself to be retaint
as president, and through his mlsmanag
meut and fra,td the cOmpany's securlti
r have depreciGted 50 that stocks worth
Il par $50. are selling nov for IS III the OPP
: market.
i Company mltie q bargain with L.
- Lawson uf Winchester, Mass, by which
= sold to him ~ 100000 OF the B. U.
bonds, and the SlO,0uOuo0 OF new st0t
= for totally inadequate price, aud thu
turned over the control OF the company
,o him.
u The bill also states TINT the defenda
-, company has never been engaged in I!
~ manufacture or sale of gus, but has co
"a fined its operations entirely to speculatii
q, ~, in the stocks and securities OF other &
~ concerns; furthermore, that it is hopeless
insolvent, anu by reason OF fraud and gro
Hismaha3enent unable TO meet It's oh
cations. Its liabilities, exclusive OF stoc
-. are 81 100000 greater han its assets.
TO- The allegations in the bill are backed
~, an by number Of atlidayits presented to t
i court bs George II, Smlth, Hayden, Sto
-, & To-, brokers OF iostDn, and many otht
~ who arc interested in the ousting
y" Addicks.
Mcdonnell asks that an accounting
made by the receiver to Edward Il. Br'
~ ford and William q. Spruance Of this Ct!
s attorneys for the complainant.
'el \ copy of the order of the court v
RI taenn out TO ClaymOnt by United Sta
or hashul IL. Il. l.annaa and served on J
Addicks at his home there.