The Birmingham age-herald., 1912-06-04
ORDER RESTRA|NS THE SALE OF BONDS HoadIey Asks Court for In- junction in Matter HEARING ON JUNE 12 Action of Hoadley Outgrowth of
 
HEARING ON JUNE F
Action of Hoadley Outgrowth of Letter Charging Illegality in Con- version of Preferred Stock
 Into Mortgage Bonds

Baltimore, Md, June 3.-(special) )--Re- hearsing largely the charges with which Joseph H. Hoadley stirred financial cir cles on. satnrdsv. the Alabama consolid-
 ated Coal and Iron company and Joseph 1 IT. Hoadley, today filed a petition in
 the United States district court, demand l ing restitution of great alleged losses :, from the Baltimore Trust company. and
 asking for an injunction to restrain the
 sale of collateral bonds of s1,25o.0oo by the
 latter company
 Judge Rose almost immediately signed
 an order commanding the Baltimore Trust company to show cause why the com plainants jetiton should not be sustained, and prohibiting the sale of the collateral bonds, which was to have taken place
 today. until Junk 12, by which time the l defendants are bound to answer.
 Must File Bond
 The effect of this order was provisional l upon the filing of s5o,ooo bond by the complainants- the Alabama Consolidated
 and Joseph H. Hoadley. This bond was to secure the Baltimore Trust company from any possible loss arising out of the delay in the sale of the collateral bonds. The Alabama Consolidated com pany Is given until June 10 to file addi- tional affdavits in support of their pray CTS, and the Baltimore Trust company is allowed until June 12. for the filing
 of all answers and affidavits
 In the filing of bond, the order provides that Joseph H. Hoadley join with the Alabama Consolidated The Alabama l Consolidated company has already signed and filed the bond and efforts are now
 being made to get In touch with Mir. Hoadley 30 that his signature may be also placed on the bond.
 The ilegality in the proceedings 1t Is charged. occurs in the conversion of the preferred stock to mortgage bonds. with
 out compliance with the conditions laid down in the New Jersey laws under which the company is Incorporated. The compliments declare that these provisions were not compiled with.
 Interest Charge Raised The result of the conversion, the bill
 shows. was that the capitalization of the company became and now s g, ,500.0o0 in common stock $io0,000 in per cent
 bonds and sl.16a000 in first Consolidated bonds The conversion likewise, it is
 claimed. raised the annual interest charge from s29 400 10 ss2 500. This, 1t Is de- clared, provided no new capital for the nhSBtsaf tne pititiffn hlptK NdS bfl- titled to cumulative dividends at the rate
 of per cent. payable quarterly out of the surplus of the business.
 It Is pointed out that the Baltimore Trust company was formed by the con- solidation of the International Trust company and the Baltimore Trust and Guaranty company, and that Douglas H. Gordon. who was president of the first of these corporations, was also vice presi- dent of the coal and iron company. and present at the stockholders meeting at which the attempt at conversion was made.
 It is further emphasized that the of ficers of the International Trust were cognizant of the affairs of the complaint mt company. and that several men were directors of both corporations; that they
 had Knowledge of the facts, which rem dered the conversion illegal, and that the trust company owned and voted at the directors meeting 9175 shares of the pre- ferred stock out of a total issue of $25, ,- coo preferred shares