Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1896-11-19

agreement to boentered into whereby in
effect the Delaware company assumed
all the obligations OF the New Jersey
company to the Mercantile Trust Co..
and the New Jersey company assigned
to the Delaware company any and all
surplus remaining out of the annual
dividends on the stocks OF the Boston
companies after the application thereof
as provided in the trust agreements.
Since May lst 1894. the annual divi-
dends OF the four Boston companies
have been insufficient TO pay the
charges and expenses of the trustee and
taxes and interest on bonds, exclusive
of sinking fund. The agreement Of the
defendant company to assume the
liabilities OF the New. Jersey company
was wholly without consideration
the Delaware company was already
entitled to all surplus Of dividends upon
the Boston companies' stocks by virtue
Of it's ownership Of the New Jersey
company stock; and there was no rea-
sonable probability OF there ever being
surplus after the application of the
surplus OF dividends to the purposes Of
the trust. 'Said agreemsnt and assump-
tion by the defendant company OF said
liabilities of said New Jersey company
was and is in fraud of the rights of
your orators as holders of said income
bonds OF the defendant company, and
in fraud of the rights Of all other
holders of said bonds. " Through the
acts named "the defendant company
has created an obligation disposing OF
its net income by way OF priority over
and in preference TO the application of
said net income TO the payment of
dividends on its said INCOME bonds. and
has thereby prevented the payment of
interest on said income bonds from
being first charge or lien upon its
net earnings.
The bill alleges that Shortly before
December lst, 1893, :" the defendant COM
pany in violation of its duty to your
orators and to all other holders Of in
come bonds, unlawfully, illegally and
wholly without consideration trans
ferred and delivered to the said Bay
State Gas &c. of New Jersey said obli-
cation OF the Bay State Gas 90. of
Massachusetts for '4,50O,O00 allows
mentioned, and all its right, title and
interest therein and thereto, said obi
cation being then. of great value, and
being the principal asset of said de-
| PENDANT company and its principal
source Of income. The New Jersey
company thereupon delivered il to the
| Mercantile Trust Co., which delivered
it to the Bay State Gas Co. OF Massa.
chusetts. and the obligation was there.
upon cancelled and discharged. For il
| the trust company received capital
stock Of the Bay State Gas Co. Of
Massachusetts, to the amount of 81, 500,
| 600 at par; the increase in the capital
stock having been authorized by the
trust company. Addicks was in
actual control of both gas companies.
The trust company -thereupon Issued
additional United Gas Bonds OF the first
series for 81, 300, 600. which bonds
Addicks delivered to the defendant
company.
subsequently, as your orators are
informed and believe, said Addicke
claiming that the defendant company
was indebted to him in large amounts
(which your orators are informed and
believe and therefore charge TO be
fictitious) appropriated to his owr
use large number OF said last
mentioned issue of bonds or proceeds
thereof in settlement of said alleged
Indebtedness to him Of the defendant
company, said Addicks being then thu
president and director of said de
PENDANT company, and it's board o.
directors being wholly under his con
troll
In 1894 the defendant company Sir
further fraud of the rights of youi
orators and of all its other income bono
holders, and 10 inviolation Of the pro
visions of said trust agreements and O
the terms of said income bonds ;
caused buildings and machinery to b,
erected upon land of the Bay State Ga
Co. of Massachusetts, and paid for tn,
same with q portion of last issue Of
81, 300, 600 United Gas Bonds of the frs
series. to the amount of about SITS,
600 and other money and "youi
orators are informed and believe, tn,
} defendant company received no copsid
GRAFTON or compensation whatever TO
such expenditure.
Since May, 1894, the dividends upol
J the Boston stocks having been who'll,
insufficient to enable the trustee t
J set apart any sum towards the sinkin
fund and in order to pretend to con
! form to the requirement of the trus
! agreement and in fraud OF the rights G
orators and other income bondholder
Of the defendant company, "said Meu
camille Trust Co. conniying and collud
I ing with said Addicks as president an
representative of the defendant CON
, pany has received and accepted frol
t the defendant company in each yea
Q since and including 1894 more tina
! 500, 600 OF said gas bonds of the frs
I series at par making total of owe
$500, 600 of said gas bonds at pa
o which we're delivered to said Mercar
T. tile Trust Go. from and out of I'll
8 assets of the defendant company.
K by the fraudulent and illegal ac'
0 above set forth the defendant compan
o has been deprived of substantially a
4 its assets and OF its sole source of IL
9 come and profit. and through Il
: fraudulent and illegal acts above s,
u fort b has been wrongfully compelled
Q make good the annual deficit of il
It terest and charges upon said Unite
Q Gas Bonds of the first and secon
+ series and of the sinking fund and
y your orators are informed and belle,
+ has made large payments to said Ne
o Jersey company and to said Mercanti
v Trust Co. among other things to NAL
# good said annual deficit of interest an
It charges upon said gas bonds and
j. said sinking fund; and since May Ia
s 1893, the defendant company has cease
8 to make any payment of interest wha
d ever upon any Of its said income bond
o whereas hut for said fraudulent ar
y illegal acts above set forth and but {,
J, said misrepresentation Of it's none
" assets and property the defendant con
J. pany would have been able to pay ar
70 would have continued to nav at n