Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1896-10-22
THE BAY STATE GAS co.
Allegation That II Is InSolVent and
That Fraud Has Been Perpetratad.
TEMPORARY RECEIVERS AppOINTED
A Wilmingtonian and a Bos-
tonian Selected.


Of which j . Edward Addicks is the presi-
dent, has gone into the hands OF tenn
porary receivers. The bill of complaint
charges fraudulent operations upon the
part OF the company induced by Mr..
Addicks.
Tho action was taken before Judge
Wales in the United States circuit
court Friday. The bill of complaint
was filed by William Buchanan Of Now
York against the Bay State Gas Co. of
Delaware and at the hearing before
Judge Wales, j. Augustus McCaulley
OF this city and Dwight Braman Of
Boston were appointed temporary re-
ceiverH, and an order was issued on the
defendant company to show cause why
an injunction should not be granted
restraining them from selling, dis
posing of, or transferring any of the
property OF the company.
Ex-senator Higgins, Roger Foster of
New York and Frederick E. Snow of
Boston we're solicitors for the com
plainant. The receivers have bonded
In the sum of $50, 600 each, with the
Fidelity and Deposit Co. Of Maryland
as security.
Service was placed in the hands of
United States Marshal II. L. Lannan
to be served upon j. Edward Addicks
as president of the defendant company.
The hearing on the rule. ia show
cause was fixed for November 7th.
THE BILL OF COMPLAINT.
According to the bill u complaint,
the company was Incorporated in 1889
under the name of the Peninsular In
vestment Co. Upon reorganization the
name was changed to Bay State Gas
Co. Mr.. Buchanan is owner and
holder Of 800, 600 par value of the in
come bonds of the, company, issued
May lst. 1889, the total issue thereof
being 81. 600, 600. This entire issue of
$1,000, 600 income bonds, together with
$4,000, 600 par value Of the capital
stock of the company, was issued to
Holman G. Mulock. in consideration
of the assignment by Mulock to the
defendant of certain bond or obliga
tion of the Bay State Gas Go. of Mas
sachusetts for the sum of 81, 500, 900.
Mulock acted for the Beacon Con-
struction Co., of Pennsylvania, of
which j. Edward AddickH was chair
man, and held ii, $50 out of the 10. 600
shares Buchanan subsequently pur-
chased said Sl0O. 900 bonds from the
Beacon Construction Co. for 500, 600
in cash. The obligation of 81, 500, 600,
according tn the complainant's belief,
was, until its alleged cancellation, the
only asset of the defendant company of
any value and its only source of in
come. In 1890, '9l, '92, '93, the de-
PENDANT received from the Bay State
Gas Co. OF Massachusetts as interest
on the bond about $1,000. 600, and
Buchanan and others received interest.
But since April, 1893. the defendant
has paid no interest on the income
bonds to the orator or other holders.
Mr.. Buchanan alleges that notwith-
standing its duty the corporation has
assumed obligations for the payment of
many hundreds of thousands of dollars
annually, without any valuable CON
sideration 20 itself. and solely for the
fraud uleut purpose of benefiting certain
of its officers in control of its affairs,
in connection with certain indie
pendent enterprises in which they
were and are interested. 1t has dis
posed or attempted to dispose Of the
said 81, 500, 600 obligation of the Bay
State Gas Co. OF Massachusetts its
principal asset, without any adequate
consideration and for the fraudulent
purpose above stated. 1t has likewise
ple,lged the specific income of property
to which it is entitled, for the pay
ment of obligations other than its said
income bonds, and has frauduleptly
transferred to one or more of its officers
in control of it's affairs, assets since
acquired of great value, without any
adequate consideration whereby it, the
defendant, has been nearly or wholly
lenleted of it's assets, has ceased to re-
ceiye any considerable income, and has
been rendered insolyent."
The complainant then goes into de-
tail. He alleges that j. Edward Ad.
dicks has been president of the de-
PENDANT corporation ever since its in
corporation. +. p. Addicks has been
vice president and treasurer and Will
liam II. Miller, Addicks' private secre-
tary, secretary. The capital stock was
first 500, 600; it WAS raised to So, 900, 900,
of which $1,000, coo was issued to the
Beacon Construction Go. and the
balance 10 Addicks or his representa-
tiyes.
In 1894 Addicks, Clearing lest he
might lose control OF the defendant
corporation by reason OF large part OIL
said stock having previously been sold
to independent parties. caused the
capital of tho defendant to be increased
to 10, 600, OO0." "a sufficient amount
main IN control was issued to him
tAddicks) or his representatives oil
associates without any real considera
ton therefor; and said issue wai
fraudulent and in violation OF The
charter of said company, which pro
vided that all new stock should b'
offered to existing Stockholders in TIT
first instance, which was not in fac
done. BY virtue of his control OF thu
capital stock said j. Edward Addick
has always. named the directors ant
officers of the defendant company ant
directed its affairs, and none of tn
officers or directors of said compan.
have ever acted rs such independently
but they aud each Of them have Away
acted as officers and directors OF de
PENDANT solely as the creatures OF SAL
j. Edward Addicks."
He alleges that before or early in 1859
Addcks, together with W. Il. l.. Dilla
way, his attorney, acquired OWNERSHIP
OF tne entire capital stock of the Bosto
Gas Light Co. Roxbury Gas Light Co.
South Boston Gas Light Co. and Ba
State Gas Co. OF Massachusetts. Febrr
airy 10th, 1889, through Addicks th
Bay State Gas Go. was organized !
New Jersey with capital of 81, 600
OCO. The company issued bonds
amount of SIG, ZOO, 600 in two serie'
Addicks and Dillaway assigned to III
Bay State Gas Co of New Jersey u