The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1909-06-18
NO CONSPIRACY TO
DEFRAUD, ALLEGED
Answer is Filed in Consolidated
Jefferson Company
Action.
GOOD FAITH IS PLEADED
BY DEFENDANTS IN CASE
Transfer to New Company Made
to Escape Bankruptcy,
They Set Up.

That the Consolidated jefferson Gala
& Copper Mining company was threat.
ened with bankruptcy aud absolute ruin
is set up as the main defense in tho
answer, filed in the Third district cou-,
Thursday, of this company and the
Wasatch Utah Mining company, to Frod
Mengedoht S suit to have set aside the
conveyance by The former company to
the latter company of all its mining
properties IN this county on the grounds
that there was no consideration aud .bat
the conveyance was in furtherapce of n
conspiracy TO defraud and cheat him
with other stockholders i'm the Consoli'
dated Jefferson, out Of bis holding in
that company.
Under resolution adopted at meet.
ing OF Consolidated stockholders in
John Wangc's office. suite 1916 Stock
Exchange building, Chicago, in Septem.
ber of 1908, authorizing aud directing
The president and the secretary of tho
Consolidated TO convey all this com
pauy's holdings TO Frank Rumpel, as
trustee, who was TO ro-copycv the prop.
erty TO the new company as soon as
formed. the Wasatch was organized and
took over the Consolidated, October 9.
1908. The number of shares, 900 900.
X.
81 ,00O. 900. remained the same. but the
new company'S stock was made assess.
able, whereas the Consolidated stock
was worcestershire.
Allegations in Complaint.
Charging that he was given no notice
of the meetings authorizing the reor-
ganization, that there was no consid.
Grafton. and that the conveyance was in
furtherance of conspiracy to defraud
him and other Consolidated stockhold-
ers out of their property Mcgendoht,
who owned 1880 shares In the old
company, brought suit to compel re-
conveyance by the new company of the
property. He also asked for an order
restraining the Wasaich from extract
ing ore from the property and for an
accounting to determine the ore already
taken ont.
In the answer it is denied that tho
meetings leading 10 the reorganization
were without Megcpdoht s knowledge.
As a defense, 1T is set up that tho Con-
solidated. Just prior to the reorganiZa-
tion, was indebted TO the amount OF
So, 900 10 various persons who were
clamoring for their money and threat
eninC receivership suits. that the tras-
ury stock was exhausted, that the other
stock was non assessablc and that it was
impossible TO raisc money TO hquldate
all or any of fhe debts, the property
not having been developed sufficiently
TO extract ore Of marketable value.
Realizing that action must be taken
to preserve the property the directors
met and decided upon forming n new
company to take over the property.
The number Of shares Of stock and the
amount Of each share were TO be the
same, the only difference being that
the stock Of the new company was made
assessahle. The new company also
out.
Stock Is Exchanged
Holders of S23.712 shares of stock in
the Consolidated have exchanged their
stock share for share for stock III the
new company, it is alleged, and have
paid their assessments, amounting To
something like three cents a share. aud
Megendoht can exchange his 1890
shares of Consolidated stock on the
same basis any time NE chooses to como
in and pay the assessment, II IS set
forth To set aside tine conveyance
subject to the reorganization would en-
tirely exhaust the property in the pay
ment Of debts of the old company. 1t
is alleged, and the defendants ask that
the conveyance be adiudged valid and
the title Of the Wasatch in and to the
Consolidated property be quietcd and
PEELED to elect whether he will take
Wasatch stock share for share for his
Consolidated stock, paying the assess.
ment, or accept the fair cash value OF
the Consolidated stock mt the time OF
the reorganization, which Is mentioned
as possibly five cents share.