New-York tribune., 1901-02-08
NO BAY STATE GAS. RECEIVER.
JUDGE KIRKPATRICK DECIDES NOT TO AP-
POINT ONE FOR THE COMPANY.

Trenton. N J.. Feb (speciaD-Henry c. Kel-
sey was to-day dismissed from the temporary
ceivershp OF the Bay State Gas Company Of New
Jersey IN an opinion filed in the United States
circuit Court by Judge Kirkpatrick who also dis
charged the rule TO show cause why a perma-
nent receiver should not be appointed. The
Plalnant IN the case is Patrick ]. Brady. Of New
YORK, who holds ten bonds OF the value Of $4,000
of the defendant corporation Mr. Rradv charged
that the company was insolvent that its funds had
oeen misused and misappIied. that its officers
had been guilty of fraud and conspiracy
All of these charges specifically denied in
afhdavits of the defendants and under these cir
cumstances Judge kirkpatrick saws the Courr
would not De justified in appointing a receiver at
this juncture although it may appear when
proofs are offered at the final hearing that such a
step is advisable
The New-Jersey company was organized in 1889
and most of its stock is held by the Bay State Gas
company of Delaware. of which j. Edward Ad-
dicks is president
Mr.. Brady's bill set forth that in order to plr-
chase the stocks Of several of the Boston gas COM
panies the defendant company issued it's bonds TO
the amount of upward Of 81 600 600 To secure the
payment of these bonds the company transferred 10
the Mercantile Trust Company OF New-York. as
trustee, all of the stocks of the gas com
panies 1t had acquired and made agreement BY
which the trustee was to receive all the dividends
which might be paid these stocks and apply
them first. to the payment of the trustees COM
penSation and expenses and next, TO the payment
'oASS interest on tne DOndS or the defendant
company The trustee was then to pay $4,000 each
year to a sinking fund for the redemption of the
bonds The defendant company reserved the right
10 designate the persons for whom the Mercantile
Trust Company should as directors of the
Boston companies, and agreed make good any
denclency there might be in the dividends TO meet
the payments required to be made by the trustee
AIterward the company transferred all it's right TO
receive the excess of dividends to the DeIaWare
corporation. which assumed the obligations to the
trustee under the agreement and trust deed
Judge kirkpatrick finds that the defendant COM
pdhy mas never been actively engaged In the con-
duct of any business. and its only assets at this
tIne are the right TO designate the persons for
wn9n r9 n tne Merca1tile Trust Company shall vote.
ana the right 70 demand from the Bay State Gas
Company OF Delaware indemnity for any loss hy
reason Of the insuhctency Of the dividends OF the
Boston gas companies to meet the obligat tionS
which were guaranteed by the defendant company
Mr.. Brady charged that floating debts had been
created by the Boston companies which had i'm
longing 10 these companies had been sold and the
money misappropriated Both of these charges.
planned in the answering affdavits: but. even IL
true he adds, they afford ground for the ap-
pointment OF receiver at this stage OF the pro-
ceedtngs- The Judge fails 10 see how the appoint
ment of receiver aid the petitioner in obtain
| ing any indemnity TO which he may be entitled
One of the charges of fraudulent mismanagement
New-England Gas and Coke Company. which was
alleged 10 be most Injurious to the interests of the
Z by the answering aldavts, which insist that the
contract was most beneficial to the companies
w. Bourke Cochran, who appeared for Mr.. Brady.
suggested that the receiver might make inquiry
into the condition of the Boston companies and re-
port his conclusions TO the Court and that the re-
ceiver could manage the companies under the di-
rection OF the Court.
Judge Kirkpatrick says that the Court cannot
give directions to the Management of the com
dtion of affairs He therefore refuses 10 interfere
by continuing the receivershtp-