Arizona republican. [volume] (Phoenix, Ariz.) 1890-1930, 1901-12-25
TO ENJ0IN N. P. PLANS
Attempt to Block the Proposed
Reorganization
Assertion That the Scheme Works to
the Injury of the Preferred Stock
holders-Common Stock Said to be
Favored

New York, Dec. 24.-Justice Scott in
the supreme court today heard argu-
ment on an application by Wolf Bros
& Co. TO continue n temporary in
junction granted restraining the
Northern Pacific Railway company
from selling the preferred stock OF
that corporation TO the common stock
holders of the company. to the ex-
clusion of the preferred stockholders.
as provided for by a resolution adopted
by the directors on Nov. 13 last: and
requiring that the preferred stockhold-
ers shall have equal rights and privi-
leges with the common stockholders in
buying the bonds.
Cochran. Moore ana Hildreth. coun-
sci for the plaintiffs. set out in the
complaint that George F.. Hackett and
Charles A. Chase are residents OF the
state of Pennsylvania. and that the
plaintiff firm is engaged in business
in this city. The defendant corpora
ton is organized under the laws OF
Wisconsin. and has an office for the
transaction OF business in this city.
The defendant company. according to
the provisions of its charter. in July.
1896. issued preferred stock to the
amount of $4,000. 600 and common
stock to the amount of $50. V0O. 900. all
at the par value of s1c0 per share. Wolf
Bros. & co. subsequently purchased
1000 shares OF the preferred stock, the
plaintiff Hackett. 600 shares of the
same stock. and the plaintiff Chase
1000 shares.
The plaintiffs assert that the North
ern Pacific company contemplates re-
tiring all its preferred stock. and Civ
ing the holders of its common stock
the privilege of purchasing it to the
exclusion OF the preferred Stockholders
the bonds which the company is now
about issuing This contemplated ac-
tion is alleged by the plaintiffs to be
illegal. and in violation of the rights
of the preferred stockholders and the
plaintiffs in particular.
The plaintiffs further allege that the
contemplated acts of the Northern Pa
cific Railway company are part of a
scheme entered into between the direc-
tors and the holders of the largest part
of its common stock to subserVe their
private purposes by making large
financial profits on the common stock
and also by giving the present holders
thereof the control and management of
the company. This. 1t is asserted. is
in violation of the duties and trust i'm
posed on the directors. and is to the
great injury and detriment of the pre-
ferred stockholders. and especially 10
the plaintiffs. Because of the acts of
the defendants. it is claimed. the pre-
ferred stock of the company has al
ready suffered a large decrease in
value, and. If the defendants be per-
mitted to carry out the scheme. the
plaintiffs say they and the other pre-
ferred stockholders viii be deprived OF
their legal rights. and be irreparably
injured
Francis L. Stetson of Stetson. Jen-
nings & Russell in opposing the mo-
tion told how the plan o. reorganiza-
tion was adopted. and said the
unanimous consent of all the stock
holders had been obtained to the
scheme. Mr.. Stetson said that the re
tirement of the S75. 600 900 of preferred
stock would be carried out on Jan. 1,
next. by a lawful method, and that the
preferred stock would then cease TO
exist, while in it's place S75, 600 600
would be lodged in the treasury of the
company. and there would neither be
an increase nor decrease in the capital
stock of the company. The plan of
reorganization had been favored by Ss
per cent of all the stockholders, and
there was no reason why 1t should not
be carried out
Justice Scott reserved his decision
and instructed counsel on both sides
TO submit briefs day after tomorrow. at
the latest. as the case was too impor-
tant to permit of any delay. He said
he would hand down his decision at an
early date.
Daniel Lamont. vice president of the
Northern Pacific Railway company.
was present in court during the argu-
ment and listened interestedly TO the
statements made by counsel on both
sides.