The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-07-01
BIG CONCERN INSOLYENT
RECEIVERS TO BE NAMED FOR THE
sHIPBUILDING COMPANY.
President Nixon of Opinion that the
Corporation Will Continue to
Carry ON Its Work.

NEWARK, n. j., June 30.-Judge Kirk
patrick to-day announced to counsel rep
resenting complaining bondholders of the
United States Shipbuilding Company that
he had received all the papers in the case
and had decided that the corporation is
insolvent. and that its directors had failed
to take proper steps to protect the bond
holders and seemed to be without ability to
raise funds. Therefore, in the interest of
the bondholders, both those who appear
here as compliments and all the others.
he said, II shall appoint receivers. / will
hear counsel as to whom they may desire
to name
IT was finally agreed that the order should
be signed Immediately and that counsel
would have until tomorrow to agree on a
suitable person for the appointment, but
If no agreement is reached the court will
name the receivers tomorrow at 10 o'clock.
Judge Kirkpatricks opinion given out to-
night enters very fully into the merits of
the controversy After showing that the
corporation is without funds. that the d.
rectors are unable TO raise money upon
the corporation credit to meet maturing
obligations and that il is therefore IN
solvent, the judge goes on to say: IL
would appear that the directors OF the com,
that the company is drifting along without
any guidance. Not only are the directors
not striving to relieve the company from
embarrassments, but they are advising the
stockholders to submit to numerous eXtor-
tons to procure present funds, and threat
ening foreclosure TO those bondholders VINO
refuse to relinduish the security or their
mortgages. These people are entitled TO the
protection of the court, and that protectiOn
can only be had by the interference of the
court and the appointment or a receiver.
A. nx,sf- lad hxr IL
rectors, the court says: IF taken Iter-
ally, they would have a tendency to mis-
lead the court. AS, for instance, Mr.. Gary
admits the truth of the statement attrib-
uted to him in the compliments hill that
the bills payable of the shlpbuilding COM
pany maturing between now and Aug. 1
next. independent of maturing accounts
bility arises from an Endorsement or the
notes of the constituent companies. ano
that all of the maturing and pressing &C
counts in the bill and mentioned in his
statement therein referred to are obliea-
tons incurred by the constituent compa-
MES, and are not acts chargeable to the
United States Shipbuiding Company, or
that it is liable for them, and adds that
there are not notes or bills payable against
the united States Shipbuilding Company
"Mr. Hyde, the vice president and general
manager of the Bath iron works, whose
affidavit Is also annexed, says that In order
to carry on the ordinary business of the
company, which is one of the constituent
companies Oh the ueleHudnt coipoideioh,
they have been obliged to borrow money
from local banks on their promissory notes,
bearing the Endorsement of the United
States Shipbuilding Company.
mason Smith Chase, president of the
Crescent Shipyard Company, says: The
Crescent Shipyard Company has been able
to finance its business with assistance.
from time to time, from the defendant by
lending its credit through Endorsement OF
the company's notes.
1T also appears that the defendant COM
pany is the owner of practically all of the
capital stock of the subsidiary compa-
mics. and that it is the actual owner of the
plants where the business of this company
is conducted; that the organization of the
subsidiary companies is maintained merely
for the purpose of retaining contracts
which are not transferable; that the prop
critics where the business is conducted,
owned by the defendant company, are
leased to the subsidiary companies under
leases which are terminable on five days
notice"