The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-06-12
FIGHT The SHIPYARD CO. PLAN
BONDHOLDERS ASK TO HAVE
RECEIVER APPOINTED.
Object 10 Getting for Their Bonds Stock
Only in Successor Company. and
Charge Fraud and MismAna cement
They Attack Nixon and Schwab.

charge Fraud and Mismana cement
They Attack Nixon and Schwab.
Suit was entered yesterday in the United
States Circuit Court at Trenton, N. j..
against the United States Shipbuilding
Company, which is New Jersey corpora
ton, for an injunction against the con-
tinuancc Of tho business by tho directors
and for the appointment Of a receiver, on the
grounds Of insolvency, fraud in the organi-
zation Of the corporation and misn,anage-
ment Of it's affairs.
The compliments are Roland r. Conk-
lin, Max Nathan, Jacob w. Mack and james
p. Mcguire Of New York city, first mort
gage bondholders and the owners OF pre-
ferred and common stock, who are repre-
sented by Guggenheimer, Untermyer d
Marshall, As attorneys, and r. v. linda
bury of Newark. and Henry Wollman and
Samuel Untermyer Of this city as counsel.
United States Judge Kirkpatrick granted
a restraining order against the corpora
ton, it's directors and officers which pro-
vents them from disposing OF any OF the
assets Of the company and from preferring
any creditors. He also granted an order
to show cause, returnahle at Trenton
next M kaMy WY n reoe,xsI OF me COM
Tie bill OF complaint. which Is very
voluminous, charges among other things
that Lewis Nixon conceived a plan for COM
bining the shipbuilding plants for the pur-
Company In which he was interested, at an
exaggerated price. and of having the new
company issue a large amount OF securities
to be unloaded on the public at exorbitant
prices. 1t is further charged that Of The
$4,000, 900 OF first mortgage bonds OF the
company about 100000 were sold upon
represe nations as to assets, debts, and
earnings which were false. that the earn
ings were grossly exaggerated and that
this has been admitted. For these bonds 1t
new company.
The bill further charges that II was
part of the original plan Of Nixon to have
Charles NJ Schwab buy the Bethlehem
Steel Works and put it into the new com
Is alleged that he paid not more than 50 1000
900 for the Bethlehem works above the
mort cages Of about 5000 900 then on the
property and that he put the Steel Works
into the Shipbuilding company at about
was controlling interest and was about
SGT 900 900 more than he paid for them
lin bonds and stocks), although he had held
the property only one year and the situation
with respect to It had not changed.
COPY OF the plan OF reorganization OF
the Sheldon committee is attached to the
papers. 1t is alleged that the Shipbuilding
company ia now controlled by MIR. Schwab
and that the plan Of reorganization is solely
in his interest," the purpose being to wipe
out the first mortgage bondholders. and
to enable Schwab to secure the entire prop
erty under his mortgages.
BY this plan. it is alleged, Mr.. Schwab
will receive back all he sold to the Ship
building company and get all It's prop
critics and assets besides. The complain
ants say that suits should he brought against
the original promoters Of the company and
to cancel the transaction with Mr. Schwab,
and that the property should be taken out
Of the hands OF the present directors and
put in the hands Of the court 30 that the
rights Of the security holders will be en-
forced.
The proposition OF the plaintiffs ia that
Mr.. Schwab shall take back the Bethle-
hem plant and that the frst mort gage
bondholders shall keep and operate the
shipbuhdIng plants.
Gustave Loeb. who is chairman OF a
committee Of first mortgage bondholders
opposed to the shipbuilding reo1ganiza-
ton plan. said last night that his COM
mitteo had nothing to do with the Trenton
suit This committee has received as
s,irance of support from holders of about
700 ZOO of the bonds.
William n. Cromwell, Of counsel for the
reorganization committee. declined last
night to discuss the Conklin suit. He has
already stated that the hondholders will
he hotter of under the plan than they
would be by forec!osng on the shipyards