Omaha daily bee., 1912-08-30
TELEPHONE DEAL IN COURT
Conspiracy is Charged in Suit Filed
in Federal Court.
HEARING SET FOR OCTOBER 7
+. II. Woods, Edison Rich, l.. 1. Abb
bott, Frank ID. johnson and +.
w. Stearns are Named as
Bondh 0iders.

Charging that an unlawful confedera-
fraud a part of the bondholders" of the
insolvent Independent Telephone company
existed a petition was filed yesterday
in the United States district court by the
First National bank and other parties
asking the court that the receiver, receiv-
er's attorney and all members Of the So
called bondholders' committee be required
to appear in court to make full answer.
The petition alleges that the whole
scheme Of the bondholders' committee,
the officers of the court and the Ne
braska Telephone company In making a
secret agreement as to the price the de.
funct company was to bsing was scheme
to eliminate and destroy the Independent
Telephone company and it's business as q
competitor to the Nebraska Telephone
company.
The federal Judge has issued an order
for the appearance Of the members Of
the bondholders' committee In court oc-
tober I to answer the petition. The per-
sons named in the petition as the mem
bers of the bondholders' committee are
Frank H. Woods of Lincoln, Edison Rich,
Lysle l. Abbott, Frank b. johnson and
Frederick H. Stearns.
List of Petitioners.
The petitioners, all Of whom were bond
holders outside the circle of the bond
holders committee, are the First National
bank of Omaha, Ellen Nj. Coad. w, c,
Bristol, E. Hayes Abraham r. Groh and
Herman r. Nitzel.
The First National bank alleges 1t held
bonds of the defunct company in the sum
of $4,000 and an additional $l3,5oo bonds
as collateral security on a note,
Ellen NJ. Coad held bonds in the sum
of $4,000 which came to her as legatee by
the will of her deceased husband. John
F. Coad.
w. C. Bristol of Portland, Ore, held
bonds In the sum Of sl4,eoo
E. Hayes, whose address is not given.
held bonds In the sum Of s5s,4oo.
Abraham R. Groh of Omaha held $4,000
worth
Herman R. Nitzel of Boise City, Idaho,
held another 5000 worth.
All these held their bonds under their
own control instead of depositing them
with the bondhoders' committee.
The petition alleges that the object Of
the committee was to institute a suit In
foreclosure Of the mortgage against the
Independent Telephone company and the
doing of such things as should be neces-
sary in the foreclosing of the mortgage.
1t is further alleged that Lysle l, Abb
bott, receiver acted both as the courts
agent and as a member OF the committee
up to March, 1912; that Edison Rich, ap-
pointed by the court as receivers at
torney, acted both as attorney and as
member Of the bondholders committee
signed, 1t is alleged, merely to avoid the
appearance Of acting both as committee
men and officers of the court. 1t Is al
legged that they knew and were aware
of all the deal between the committee
and the Nebraska Telephone company,
whereby the latter was to pay for the
defunct company $4,000.
Tells OF Deal.
An agreement between the bondholders'
committee and the Nebraska Telephone
company, whereby the bondholders' COM
mittee was not to bid at the foreclosure
sale of the Independent property Is al
legged to have been made. 1t is also al
legged that Francis S. Hutchins, who
bought the franchise, acted for the Ne
braska Telephone company. The petit
ton also sets forth that there was an
agreement between the bondholders'
committee, by virtue Of which the Ne
braska Telephone company was to pay
an extra 100000 into the hands of the
committee as soon as the confirmation
of the sale for s1,OOo0OO was made. 1t
is charged that Special Master Abbott In
reality did not deliver the property Of
the defunct company into the hands Of
the purchasing company even after tho
of the sale until the extra
$400, 900 had been paid into the hands of
the committee.
The petitioners pray that the entire
sale be set aside as illegal IL their allega-
tions be established as facts, and that the
be again given into the hands
of the court; that Abbott be removed as
special master, and that O new special
master and receivers attorney be ap-