Evening journal., 1897-12-30


HIM AND BAcoT BY THE TRUs-
TEES OF GEORGE KEENAN,, A
BoNDHoLDER.
Newark. Dec 3O.-T. j. Purdy, a New
York lawyer who appeared before Vice
Chancellor Emery yesterday as coun-
sci for-the defence IN the suit brought
bv ] Edward Addicks and John Bacot
arainss the Fidelity Title and DeFosit
Company. of this city, created some
what of a sensation by the vigorous al
legations made in an. affidavit submit
ted bv him. Messrs. Addicks and Bacot
made ~ application. as receivers OF the
staten Island Terra Gotta Company, to
compel the Fidelity Title and Deposit
COMPANY to pay over to them 81 500
which the company holds as trustees
for a bondholder named George Ken
nan. and 1t was the affidayit OF Lewis
M. Thompson, of Kennan's counsel that
Mr.. Purdy presented.
Some time ago part of the companys
plant at Spa Springs was burned, and
the insurance paid amounted TO $685.
600. The receivers got the consent sub
seauently of all except two OF the bond
holders Ia. apply that money to tho re-
building OF the plant The money was
paid to them, with the exception OF ST.
500. which the court directed the trus-
tees to hold Since then 81 500 work OF
work as been done at Spa Springs, and
the receivers desire the money reserved
on the ground that there is security for
IL In. the shape Of the work done.
The answering affidavit set forth
that Addicks, after the corporation had
been wrecked, and rendered totally in
solvent. was made receiver, evidently
through misinformation. and that as
receiver, he had negotiated the sale OF
the assets of the company to himself
and transferred his bid TO the Staten
Island Clay Company, a concern OF
which he was one Of the inoNIpolatols
IL was also claimed that he then ap-
piled TO the court for the Insurance.
money, which was payable TO the trus
tee OF a mortgage Of $350,000, and tha
'this former president, receiver and ne
Eotiator OF the sale OF the remnant o
the wrecked corporation asked that tn
trustee be directed to pay into his owl
hands the money which 1t was the dut!
of the trustee either to'reiRvest for tn
bondholders or TO expend to replace tn
property destroyed" IL was also al
legged that double form Of consent
that was misleading to the bondhold
,.rs. was presented for their signatures
that misstatement was recklessly EN-
poyed to influence bOndholders, an
that there was other misrepr~senta
tion.
THE very words OF the form OF con
sent" continued the affidavit, lead
the strongest suspicion that the inaui
TOD frtH. 4 hf
channels than the restoration OF Oh
buildings and the apparatus destroye
by fire.
After the said buildings whore fir
proof material was manufactured wei
destroyed by fire, the branch OF Il
business therein conducted seems
have been suddenly discovered TO HAY
been very profitable. It was so prof
able In connection with the, manag
ment Of that and other portions of Il
business under the control of one
the receivers while he was acting as q
president Of the company that, aft
having paid dividends for several yea
under the previous management, q
company suddenly commenced TO II
down financially under the control, al
was so effectually handled and manip
lated that after he had been president
short time it was found to be load
up with 100000 indebtedness. whic
as one Of the receivers, he increas
$115,O00 more in two years time. Eve
month that its assests are withhe
from division among its bondholde
is costing them under this ratio aho
$5,O0O."
After hearing argument the viz
chancellor denied the application
Addicks and Bacot.