The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1905-09-03
UTAH COPPER
Is ENJOINED
Col. E. A. Wall Files Suit Telling of
High Finance Methods.
BIG PRICE FOR NEW MILL
ALLEGATION MADE PLAINTIFFS
RIGHTS ARE THREATENED.

A SUIT containing many charges and
n one that viii. at least for the pres
ent, prevent the Utah Copper
| company from carrying out its ex-
pressed purpose of issuing 5000, 900 in
bonds and increasing its capital stock
! from 100000 to $4,000 O0O was filed in
the district court yesterday The ac-
ton is brought by Colonel E. A. Wall,
vice president Of the corporation, to
restrain the Utah Copper company and
other officers and directors and share
holders from holding the meeting that
is advertised for next Tuesday at
Jersey City, New Jersey, TO ratify the
proposed bond issue, stock increase and
other things previously agreed upon
by the board of directors.
The complaint is a lengthy one and
recites all Of the features Of the deal
by which the company finally sold To
the Guggenheims, or the American
Securities company, enough stock TO
give them control Of the corporation,
as the plaintiff was advised from time
10 time Of the negotiations. II al
leges that the other members of the Of
fetal household and directorate of the
Utah Copper company had conspired
with others to deprive the plaintiff of
! his legitimate voting strength in the
| company and to reduce, proportion
ately, the value of his holdings. Ia
July of last year, the complaint states.
] the company issued $3.50 600 worth Of
| bonds to meet the expense of building
| the cOmpanys present milling plant
and other purposes. These bonds wee
| taken by the shareholders in proper
ton to their holdings and Colonel
| Wall, who owns $4,000 or One-hfth Of
| the shares in the company took and
paid for $50, 900 worth After claiming
that the cOmpay now has a surplus Of
something like S200, 600 and cOnse-
quently in strong shape financially the
| plaintiff takes up the matters that
have finally eliminated in the action
just begun.
Proposition from General Electric.
For some time past, it is alleged, it
has been deemed advisable and desir-
able by all directors of the company 20
enlarge its milling facilities by the
construction OF works at the point OF
the mountain west of this city with a
capacity of at least 1900 tons per day
In May last President G. NJ MacNeiTl
and Secretary Spencer Penrose notified
the plaintiff that they could effect ar
rangements with the General Electric
|
cial strength and responsibility, for al
the money needed by the Utah Copper
company up 10 $4,000, 600, upon lis sim
pie unsecured note. with interest at 3
per cent per annum. provided the Utah
! Copper company would sell it's cOpper
product to the General Electric COM
pany at prevailing market rates. To
this arrangement. at the request Of
President MacNeiu, Colonel Wall con-
scented.
Later. or about the first of June last.
plaintiff alleges that the president and
secretary advised him that they had
received proposals for the purchase of
controlling interest in the capital
stock of the company and that they
believed they could secure $50 or more
share for it, and requesting that he
join them in making such sale; Colonel
Wall then agreeing to go in on any
sale that was satisfactory to MacNein
and Penrose at price not to be less
than $50 a share
About the 18th day of June, plaintiff
alleges, AfacNeill and PenrOse COM
municated with him again, through D.
c. lacking, one of the defendants,
stating that they could get so per
share for 81 per cent Of the companys
capital stock of 100000 shares. and
urged Colonel Wall to join them in the
uedI. rms ne declined.
Price is Again Cut Down.
On or about June 80. the plaintiff
AYERS, MacNeiH and Penrose informed
him that they had for themselves and
associates entered into an agreement
with the Gu6senheim brothers, mean
ing the American Securities company.
by which they had given an option to
them TO purchase, within five months,
81 per cent of the capital stock Of the
Utah Copper company at $50 per share
and pay a commission of . psr cent or
40 cents a share commission, leaving
the net purchase price $500 per share:
this with the understanding that the
American Securities company would
lend the Utah Copper company 50. 600
600 with interest at 8 per cent per an
mum, the loan TO be secured by first
mortgage upon the Utah Copper prop
erty. The money was TO be available
i'm forty days and Colonel Wall was
again urged TO join them in the sale
of a proportionate interest of his cap
ital stock. which he declined to do.
The plaintiff then shows that, de-
spite his protest. the directors met p
and ratified the contract with the Gug-
genheims and issued a call for a stock
holders meeting in Jersey City for
Sept. next Tuesday, to provide for
an increase of the capital stock and to
ratify the proposed bond issue of So
100000. He claimed that the amount OF
bonds proposed was not necessary to
carry out the proposed plans of en-
laFgement
The plaintiff also alleges that he in
terviewed MacNeill and that he was
advised that. unless he contributed TO
the sale of shares 10 the Guggeaheims
and voted for the increase of stock and
the issuance of $1,000 600 convertible
bonds. he would not be entitled to par
ticipate il the cutting up OF the new
stock. He also alleges that at the time
of the proposed sale to the Guggen-
helms Utah Copper stock was selling
at a price in excess of $40 per share.
ana that he had since received a bona
fids offer of $26 per share for q block
of $4,000 shares. He claims however.
that the actual, intrinsic value of the
stock. based upon the ores developed in
the mine. with copper at u cents per
pound, is at least 800 pr share, all
of which was and is well known to
plaintiffs.
Colonel Wall also alleges that defend
ants. acting in collision with others,
have conspired to make him come to
their terms and demands and sell As
900 shares of his stock at 500 or about
two-thirds of its present market value.
and cause him to lose $40 a share. or
s459. 000 or otherwise TO have his pres
ent ownership of 20 per cent reduced
to 10 per cent or a net loss of % per
cent of his holdings therein which. at
the present market price Of the stock.
would mean $675,O0O.
Charges Prices Are inflated.
1t is also alleged that unless re-
1 Il IL.