The evening star and Newark advertiser. [volume] (Newark, N.J.) 1907-1908, 1907-10-19
Injunction Prohibiting Com.
binatiOn Is Modified by
Vice-ChanCellOr.
EXCHANGE OF THE STOCK
Permitted Under Decision -Di.
rectors and Stockholders to
Vete on Merger at an Early
Date.Agreemenf Settled
on by Lawyers in Case.

Chancellor Emery today decided
after long argument of counsel. that he
would modify the injunction heretofore
existing. enjoinng the merger OF the
United States Leather Company with the
Central Learner Company. The order per-
hitting the merger will be signed later in
the day. BY the courts decision stock
holders in the United States Company have
the right to exchange their stock for $50
par value Of per cent. twenty-year gold
bonds of the Central Leather Company and
$50 par value Z per cent. cumulative pre-
ferred stock. and the optional right to ac-
cept $3.50 in addition Of the Central Com
pany's common stock in lieu of their right
to accrued earnings In the event OF their
election not TO accept the $3.50 OF common
stock. stockholders may pursue in the law
courts their asserted right to an accounting
of the surplus earnings of the United
States Comnany.
The decision OF the court permits the d.
rectors and stockholders of thesfwo leather
corporations to vote on the new merger
agreement at as early a date as the law
permits. Nearly all OF the stock OF the
United States Company is held by those
favorable TO the merger.
An imposing array OF counsel represent
ing Robert A. Johnston, Jessie NJ Tul-
madge, James c. Colgate, the United
States Leather Company and the Central
Leather Company appeared today before
Fice-Chancellor Emery on the notice made
by the defendant leather companies that
second application for modification Of
the injunction, denied two weeks ago.
would be made.
The formal application was made by r.
| V. Lindabury general counsel for the
merging companies, aud Louis L. Deia.
1 field, for the couplaiuants, entered for.
NAL objection thereto.
The sections embodying the changes
made in the form Of agreement, are as
follows:
Each holder OF one share of the pre-
ferred stock of the Upited States Leather
Company, upon the surrender OF the GER
tifcate thereof to the Central Leather
Company duly indorsed In blank for trans
fer, shall receive the following securities
OF the Central Leather Company: $50 IN
par value Of first lien 20-year per ceiit.
gold bonds, $50 par value of per cent.
cumulative preferred stock In exchange
for and in full of the principal Of such
share. and $3.50 In par value of common
stock in exchange for and in fulF of the
accrued and unpaid dividends ON such
Stock
The provision accompanying this ex-
change proposition, which caused long
argument two weeks ago, as presented to
tile court today, reads as follows:
agreed that the holder of any share or
shares OF said preferred stock of the United
States Leather Company may. at his op-
ton. produce to the Central Leather Com
pany the certificate for said share or shares
with proper memorandum thereon, signed
by such holder. showing his receipt on
account of said share or shares OF $50 OF
gold bonds and $50 in preferred stock for
each such share and upon such production,
and the delivery TO said Central Leather
Company of duplicate of such memo
randum and receipt. likewise signed by
such holder and reciting that the same is
given pursuant and subject to the pro-
visions of the provlso, the said holder shall
have the right, without surrender or In
dorsement for transfer Of said Certificate
Mr.. Delafield insisted that the changes
Il ade the amended agreement more ar
bitrary than the one it substitutes He IN
sisted that the agreement now meant that
an exchange OF holdings by the COMPLAIN
ants would forever bar them from bring
ing suit to the surplus.
Vice-Chaneellor Emery expressed him
self as unable to adduce such constfuc-
tion from the amended agreement mas
much as all reference to any limit OK time
had been eliminated tllerefrom.
Francis P. Huntington, for the complaln-
ants. followed Mr. Delafeld. his argument
being supplemental and along the Iines OF
his colleague. He contended that surren-
der of the complainants' stock would de-
bar them from any right to sue for ae-
crued earnings subsequent to such ex-
change.
The court said the construction placed
upon the agreement by counsel for the
complainants was altogether wrong. as the
agreement expressly conceded the right
of the complainant to the sccruments II
the exchange did not include complete
them $3.50 in stock in lien of such ac-
cruments.