Norwich bulletin., 1913-12-31
SPECIAL MASTERS FINDING ON
 GILBERT TRANSPORTATION co.
Contract on Cape God Canal Caused It's DownfaII-Mark L. Gilbert Has No Resources

What is said to have caused the Gilbert Transportation Co. to go un der was the contract the corporation had to haul the stone for the canal across Cape Cod. That contract was a losing one, on it's face it is said, and 1t had been refused by so many be- cause it was so apparent that the one who took the sub- for the hauling of the stone would be a loser, that it was, in a way, just hung up for some one to take it.
 Mark L. Gilbert promoted the com pany, and that the directors of the company fell in with his proposition is indicated in the report filed in court by the special master. Before the cor poration was organized MT. Gilbert was interested in shipping interests along the Sound, but, as the report shows, the directors of the Gilbert Transportation Co. accepted his propo- sition in it's entirety.
 Many of the parties in court and others who are not yet in court, but on whom Frank s. Butterworth of New Haven, as receiver of the com pany, has made demand, received common stock as bonuses for the pur- chase of preferred stock, and, under the masters report, if the court finds, as legal proposition, an assessment to meet the liabilities of the corpora tion can be levied on this bonus com mon stock, the holders of H are liable for it's full par value at $100 a share. Then there was some of the preferred stock that was sold for less than the par value of $100 a share, and yet under the mGSster's report, these hold CTS are liable for the amount of the par value, in addition to the amount which they have already paid.
 Under Gilbert's proposition, which was accepted one-half of the total common stock was given to him and from the One-half he received he re- turned one half of it to the company, or agreed to do sO but the law claim is made that most of the common stock that was given away in bonuses was stock that had been voted to Gilbert by the directors of the corpora tion under the proposition, and all of this stock was supposed to be full paid up and non- -assessable stock, and was so endorsed. Now, as many of these holders were not the original holders of the stock, it having come to them from Gilbert, or from others it is claimed that they cannot be holden on the stock for the reason that, when they acquired the stock, by the certificates it was represented to be full paid and non -assessable, and that these holders stand in the same position as the investor who might have bought the stock in the open market. That is one of the claims of law that is advanced in the interest of the bonus shares and the other classes of shares, as outlined.
 Because the company fell down on the Cape Cod contract, the company had to make good with the original contracting firm, the Degnon Con- tracting Go. and the surety com pany, because of sureties on that and other contracts the Gilbert Transpor tation Go. had, as a creditor in the sum of over $205,O00. Aside from the legal question first outlined there is another and one which is considered Q broader question, but this second question, instead of applying directly to the stockholders, applies to the creditors The claim is that as the stock was given to many of the shareholders in the way of bonuses for the purchase of preferred stock