New-York tribune., 1910-08-17
newman ERB DEFENDANT
KIeyboItes Ask Over 81, 900, 600
in Cincinnati Suits.

(iQCtnnat, aug lo.-D'
49, ., ooo ofo we're fled here To-Day
.aai,., Nauman Frb. New YORK attor-
nav IN behalf of Rudolph and LNopoi'
1<,evbo,te former brokers. OF TINS ci.s
One sutt alone would dispose OF sl'l''VV
7, arother the Chesa peake ONO haii-
road is made a ioint defendant Win I'll ~
Tba LITIGATION grows out of the fornndti'h
If a unuidatfng trusteeship of the oid III III
IF Kleybolte & Co. in 1908 In eenelai nv
aueeations are that Erb, although ACTIVE
trustee. was found in an adverse lnsteau VI
friendly attitude toward the inter e''9
which he was supposed to conserve aiit.
that as result of his deals the interests Oh
the members of the firm and OF the cieoi'-
ors have been endangered
One of the deals in question involved the
Gale or the Wisconsin Central Ra1iroah 10
the Canadian Pacific; another the recent
nurchase of the Chicago, Cinclnnatl q
louisville nv the Chesapeake & ONO roao.
The nIaintiffs ask for the appointment OIL
| a receiver TO take over the assets helo ps
the trusteeship. an accounting oy lho
| trustees and the recovery OF more imam
| 81 COO 900, which they say should nave ac
| crued to the firm instead of TO the lnol-
| viduals.
| When the trusteeship was formed. Two
wears ago. the assets of the brokerage nrhi
| were given as s8 $4,000 and the haplilies aS
| 81 200 OOO.
The s,,it Involving the deal whereby the
| Chesapeake & Ohio Railway bought INC
Chicago Cincinnati & Louisville road asks
that an Injunction issue to restrain 'he
purchaser from paying over the moneys
for the property. The kleyboites assei
that they held one-third interest in the
| hat arranged 10 DrlHR
| bout a forced sale whereby these securi-
ties WIRE disposed of at less than their par
| or market value
| In the third suit which asks generally for
| an accounting of alleged profits asserted TO
have been made by Erb in alleged specula-
| ton in securities received by him as trustee.
| mention is made specifically Of the alleged
| Wisconsin Central deal and another IN
| which the transfer of 2,25O shares of the
| Ann Arbor Railroad Company by the Prov
| ident Life and Trust Company of Philadel-
| phia figured. The profit to Erb OF the
| alleged Wisconsin Central transaction Is
said to have been more than s1,oc'oO
| In the Ann Arbor deal Erb is asserted to
have approached the Philadelphia concern,
| which was one of the creditors of the Kley-
| boltes and bought the stock despite an ar
| rangement to pay off loan for which the
| stock had been pledged as security When
| remonstrance was made the plaintiffs as
| sert Erb offered to turn back the stock. but
| at an advanced price over that which he
! paid for it.
| Newman Erb gave out the following
| sta atement here yesterday, in connection
| with the suits instituted against him in
| Cincinnati
| In regard to the Kleybolte suits. l have
| nothing to say at this time except In ref
erence TO the charge of my having in
Cured a liability While acting as their
| trustee Early in 1908 a meeting of their
creditors was called and held in this city,
| which I attended, being at the time cred
| itor to the amount OF over 100000. | was
| appointed one of the three provisional trus-
| tees, the late Charles c. Dickinson. then
president of the Carnegie Trust Company,
| and Andrew T. Sullivan, president of the
| Nassau Trust Company, being co-trustees-
| The Indebtedness of the firm at that time
vas about SO00,000 and their current as
sets about half that amount Counsel rep
resenting the creditors present prepared a
| trust agreement. which contained among
other things this provision:
This agreement shall not become bind
| ing unless within sixty days from the date
| hereof it shall be signed by creditors TO an
amount which, in the judgment of the said
| trustees, will be sufficient to enable them
| to proceed with the execution OF said
| trust
| ing given their assent to the arrangement.
/ on the written request of Messrs. Rudolph
Kleybolte & Co the property which had
| been only nomnally transferred before
| vas turned back to that firm and they
have ever since had full control and
| charge of II.
| The trust had never been declared effec-
tive. but wholly independent of that fact
| never purchased a share of stock
| nor a single bond on my own account that
was ever owned by Rudolph kleybolte &,
| Co or any of their creditors. so far as l
| have any knowledge. and l believe L ought
| to know without written consent. except
| as to about 500 shares of stock acquired
| With the knowledge and consent of the
| actual owners of the stock. to whom
| kleyboIte had conveyed the same
| 7 have had the most laudatory, f1atter-
! ing and commendatory letters from both
| members of this firm for my efforts in their
| behalf Rudolph Kleybolte & Co. have
been and are hopelessly insolvent In IN elr