The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1896-11-14
A SQUEEZE ON THE SMALL FRY
NO DIVIDENDS SINCE PENNSYLVANIA
COMPANY GOT CONTROL.
Looks Like a Scheme for a ReOrgan.
fxatfOn to the Detrimcnt of Smaller
StOckholders.


jurisdiction of the court extends. that is.
for so much of the system as lies In In
diana and Illinois. Action similar to that
upon which the receiver was appointed will
be brought in the State Of Michigan, and
thus the receivership will be made COM
Ilete. The appointment of the receiver was
by agreement of the parties to the suit re-
Gently filed by the holders of bonds of the
Terre Haute & Peoria railroad. The Terre
Haute & Peoria is leased for a period of
ninety nine years from Oct. l, 1882, by the
Terre Haute e. INDIANAPOLIS, or Vandalia,
and is thus part of the Vanealia system
Previous to the leasing of the road the
Terre Haute & Peoria issued bonds. and
for the payment of accruing interest on
this issue of bonds 1t was coyenanted
that 80 per cent. of the gross earnings of
the road should be set aside. The lease of
the Vandalia was made subject TO this COW
enant and, in the words of the broker, the
bonds carry the guaranty of the Vandalia..
The 30 per cent. was to be devoted to the
payment of interest on the Terre Haute &
Peoria bonds, trackage and taxes, and if
there was any remaining it should be paid
to the Terre Haute & Peoria by the Van
dalia rental.
On Saturday, Oct. 81, John G. Williams,
formerly attorney and iater general man.
ager of the Vandalia, but now represent
ing the holders of Terre Haute & Peoria
bonds. filed in the United States Court
bill Of complaint in cause entitled Mark
II. Cox. James A. Blair and James w. Paul,
jr., against the Terre Haute &c indianapolis
Railroad Company" The complainants are
owners of 81, ,4l5O00 Of the T. II. & p. bonds.
In their bill of complaint they set forth
tln dc xurac nnf Il
Sept. 1, though 80 per cent. of the gross
| earnings, if devoted according to
| contract with the Vandala, would
have paid It, The court was asked
| to appoint a receiver under the belief that
| the Vandalia was insolvent. In support of
| the theory that the defendant company
| was insolvent it was recited that other in
| terest had been defaulted and that IL was
| probable that $1,000 of interest due on
| Terre Haute & Logansport bonds (another
| line leased by the Vandalia) would not be
| paid when due, Nov I.
Yesterday was the day set for hearing
| the cause and there were present in Judge
| Woodss chambers attorneys representing
bondholders of the various lines or the
| Vandalia system. Attorney Calhoun, of
| Philadelphia and Mason & Latta, of this
| city were there for the holders of Indiana
| & Lake Michigan railroad bonds; attorney
| Nicholson, of Philadelphia, represented the
| T. H. & l. bondholders, and Vice Presidents
| McCrea and Brooks were on hand looking
| after the interests of the Pennsylvania
| Company, which owns a majority of the
| stock of the entire Vandalia system. None
| of these was party to the suit,
| though by the terms of the bill of COM
| plaint 1t was specified that the complain
ants brought the suit for themselves and
/ as many other interested parties as should
come forward and bear their portion Of the
| expense Of the suit.
Representing the parties actually engaged
were George w. Wickersham, of New York,
| and John G.. Williams, of this city, for the
complainants, and Samuel Dickson, of New
| York. T. j. Golden, of St. Louis, and S. 0.
| Pickens. of this city, for the defendant.
| When the discussion of the cause began,
| during the mornin~ the attorneys did not
| seem TO understand each other nor their
| positions. and the whole matter was in
| somewhat of a mudde. After several at
| torneys had spoken upon the case Judge
| Woods announced that the court would not
| appoint a receiver merely to make the ex-
| pertinent of seeing il n receiver could run
the system Of roads better or more eco-
nomically than the officers already in
charge. He said If receiver were appoint
ed il would be upon the showing of counsel
that 1t would tend to put an end to the liti-
| CATION and protect the equities of all par
ties concerned. There was really no con-
tention among the attorneys over the ap-
| nointment of the receiver and when Judge
| Woods found this out and also that the de-
fendant company was willing to admit its
insolvency and suffer the appointment of a
receiver. he adjourned the hearing until
afternoon.
V. T. MALOTT SELECTED.
At g. o'clock attorney Wickersham ap-
reared with q draft of a decree for the
appointment of receiver. 1t was read
aloud, and, upon suggestions from the
court. was changed in some places slightly.
1t was to the effect that receiver be ap-
pointed to take charge of all the property
of the Vandalia and operate 1T subject 10
the order of the court Attorney Calhoun,
representing the holders Of Indiana & Lake
Michigan bonds, requested the court
to withhold the signing of the decree until
to-day. He said that, while not party to
the suit, the court would recognize the in
terest of his clients; that he expected a
letter from them defining their position and
perhaps nominating a man who would be
acceptable to them as receiver. His petit
| ton was not considered, and the parties to
the suit were asked 10 nominate receiver.
Attorney Williams, for the plaintiffs. who
| occupied n chair near Vice President
Brooks of the Pennsylvania Company.
said that volney T. Malott would be ac-
ceptable "to u.s. Mr. Wickersham, at
| torney with Mr.. Williams for the complain
| ants then informed the court that MIR. Ma
! lott had been ''our independent selection,
| and that he had learned that he would be
| acceptable to the defendant. Attorneys for
the defendant signified their approval OF
| the selection, and Vice President McCrea
slid the Pennsylvania Company was salts
| fled.
Mr.. Malotts name was written in the
blank space left for IL, and then the ques-
ton Of bond came up. 1t was agreed that
a personal bond of $4,000 would be salts
| factory from a man with the wealth and
character of Mr.. Malott. 1t was decided
that the receivership should begin at mid
night last night provided the required bond
should be filed. With these matters adj
justed. Judge Woods signed the decree and
the attorneys retired. Mr.. Malott filed his
bond in short time after the action was
taken, and. under the decree of the court
Is now at the head of the Vandalia system
OF railroads as receiver.
The lines Of railroad which come into the
hands of the receiver by this action In
clude tho following:
The Terre Haute & Indianapolis (mair