The Montgomery advertiser., 1906-03-25
FRAUD IS ALLEGED
REcErvERsHIP or LOOKOUT CON-
 PANY ATTACKED.
Averred That CoIlusion Has Been Ent- cred Ipto for the Purpose of Defraudinw the Unsecured
 Creditors of the Concern.

Birmingham, March 24.--(Special. )--- Collusion and fraud In the receiver ship of the Lookout Mountain Iron Company Is alleged in petition filed in the Chancery Court today. Unse- cured creditors aver That the appoint ment of a receiver was for the pur- pose of hindering. delaying or defraud- ing the complainants and other cred ifors of the said iron company and Is fraudulent and void.
 The Wilcox Furniture Company. J. H. Parham. Ar nour & Co, and Chat tanooga Feed Company, are complain ants In the suit which is directed at the Lookout Mountain Iron Company, American Trust and Savings Bank, J. C. Battelie and J. H Frantz. It Is avcrred ir the petition that the coal- plainants are creditors of the Lookout Mountain Iron Company and that the company Is indebted to them as fol lows: Wilcox Company. $500; ]. H. Parham. s125; Armour & Co. sl,s9S.5S; Chattanooga Feed Company, $500.
 The petition recitcs that the com pany owns and opera.es furnace and County, Ala. mineral lands in Dade County. Ga, and that it owns accounts receivable aggregating about $22,0eo. The petition gives details of outstand- ing bonds of the company and ayers that besides the bonded indebtedness. part of which IS secured by deeds Of trust made to the American Trust and Savings Bank, one of the respondents, that the company is indebted to unse- cured creditors exceeding $13O,000.
 Details Of a private and confidential letter dated February 14, 1908, show ing bad financial conditions of the conn pany, are then given in the petition These letters are said to have been sent out to the stockholders.
 The petition reeites that bill was filed in the United States court ny J. c. Battelle and I H. Frantz asking charge of the affairs of the company. Compliments aver that among other things the bill asking for receiver contained the following language:
 ITO preserve the assets of the cor poration, to prevent the wasting of the same and to prevent creditors from ac- quiring liens thereon by way of at tachmeut or otherwise" In answer to this bii1S tiled in the Federal court. it Is averred the lookout Mountain Iron Company, J. F. Steins secretary, ari- swered and admitted to the allegations, consenting that receiver be appoint ed.
 Complaints aver that immediately upon tilins of the oiii and ;s; ;ians;wsr py D, was appointed receiver in the causes and took and has possession of all the assets of the company. The petition proceedings entered into by J. c. Bat telle and consented to by the corpora tion are. coIlusive and fraudulent and ''it' 1t is averred that the agreement shows upon its face that the express purpose was to hinder. delay and de- fraud creditors In the collection of their just debts, and that the fraudu- lent intent was consented to and con cured in by the Lookout Mountain Iron Company.
 The chancery court is asked to set aside the suit of J. c. Battelle as fraud ulent and void, and render decree of reference. referring to. the register to ascertain and report who are the cred itors of the company and the amounts of their rebts. and what Hens, If any they have on the property. It is fur ther asked that the chancellor order q sale of all assets of the company to pay such creditors and that the court will marshal the assets as a trust fund to be administered for the benefit Of creditors.