New-York tribune., 1901-04-20
DIRECTORS MAY BE SUED.
COURT WON'T ALLOW TRANSFER OF
LO-ANERICAN LOAN HOLDINGS.
EVERYTHING NOW IN THE HANDS OF THE
RECEIVERS, AND TIL I,Y MAY SELL THE
ASSETS AND GIVE STOCKHOLD-
ERS THE MONEY.
ERS THE MONEY.

The directors of the Anglo-American Savings
and Loan Association suffered reverse yes
terday at the hands of the Appellate Division
Justice Goodrich of the Second Department. in
Brooklyn, handed down a decision TO the effect
that the plan submitted by William B. Horn
blower and other counsel for the transfer of the
second mortgage holdings of the insolvent con-
cern, amounting to about S2000000. TO the En-
pre Realty Company organized by the directors
of the Anglo American company. would be an
injustice TO certain shareholders of the Anglo
American.
This throws the affairs of the company wholly
S Wilbur and Edward D. Candee, who. unless
the case is appealed, can now go ahead and sell
the company's assets and divide up whatever
money there is among the stockholders
Russell & Winslow. who opposed the Empire
Realty Company's plan. will now. it said
last night. follow UP thir original intention of
bringing an action against the directors OF the
Anglo-American company. charging them with
fraud and deceit in securing funds from stock
holders.
Frank A. Waggonner of Russell & Winslow.
said yesterday afternoon:
Justice Goodrich holds that under the laws
OF this State the company could not legally loan
more than 30 per cent of the first value of prop
erty first mortgages and if there un-
invested money remaining the directors were
required to invest it in bonds of the United
States in securities such as are bought by
savings banks of this State In scores of cases
people in moderate circumstances were solicited
by the agents of the Anglo American company
to withdraw their savings from banks and in
vest them with the company. because as al
legged, the company was investing the money
only in first mortgages and real estate"
,orIa- Of
when asked yesterday If the company intended
to appeal said:
We shall not know till Monday. The burden
of protecting the interests of the stockholders
now rests with the receivers. and will so remain
unless the United States courts should take ac
tion changing the situation
The directors of the Anglo-AmerCan COM
pany, according to its last annual statement
were as follows: Thomas l.. James. president of
the Lincoln National Bank; John d. Vermeule
president of the Holland Trust Company; George
NJ Hard. president of the Chatham National
Bank; Phneas c. Lounsbury, president of the
Merchants Exchange National Bank; Charles
Gerding. Edward Thompson, John Fertig Will
lam r. Pearce and A. H. Gilbert Mr.. Gilbert
was secretary and general manager.
4 question from the beginning has been, Are
the directors personally liable for the losses of
the mismanaged company? Russell & Winsow
asserted that transferrence of the old COM
pany's assets to company would tend to
relieve the directors of the old (AnSlo-Americam
company from personal liability. With reference
10 TINS phase or the matter, Justlce doodTlcfl,
whose opinion was concurred in by all the
justices save Justice woodward, who did not
vote, says:
In addition to this, ii may be possible that
claim will be made that the directors are liable
for investing money in the Pearce mortgages, in
violation of Articles 10 and IL of association in
reference TO which | express no opinion II such
claim successfully asserted and collected
the stockholders would quite probably be insured
against any substantial depreciation in the book
value of such of thet assets as are represented
by the Pearce mortgages item.
1t was learned last night that counsel for the
directors of the Anglo-American were a few
days ago on the point of settling out of court
the claims of the shareholders represented by
Russell & Winsow. but withdrew their PROPOSE
ton. The liabilities of the company amount TO
S3.O13.305 30. and the nominal assets are set
down S4.342, ,SI2 04. Against the nominal as
sets first mortgage liens of more than 81
00OOOO If the first mortgages are forecloSed
1t is feared that the $2OO0OO0 in second mort
equities will practically he wiped out. leav-
ing the shareholders little nothing.