New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-01-09
-Four Holders of Preferred
Lay Claim to Share in
Extra Dividend.
THEY REPRESENT 1850
SHARES OF STOCK
Basic Allegation Is That B. & o.
Stock Is Part of Capital
Investment.

a summons and complaint were served
yesterday in the Supreme Court OF New
York County on the Union Pacific Rail-
road Company and the directors BY
Holmes. Rogers q Carpenter. OF No. ~
Broad street. attorneys in suit brought
by Joseph r. McCaddon. Catherine \.
Cooper. Stanley F. Cooper and Linda Is.
Cassard. owners OF 1880 shares Of the
preferred stock, for a permanent injunc-
ton restraining the directors OF the COM
pany from distributing its $4,000 BALI
more & Ohio stock among the common
stock holders.
The suit was filed following the an
nouncement that the directors OF the
Union Pacific had approved the plan rec
commended by the executive committee
last Tuesday for the distribution to the
holder of each share Of Union Pacinc
common stock of 81 par value Of Ralti-
more e. Ohio preferred. 81 % par value
OF Baltimore & Ohio common and an ad-
ditional s. i'm cash. No injunction Is
sought against the payment Of the extra
cash dividend OF 81 a share.
I'm the bill of complaint against the
Union Pacific and its directors it is as
serted that Joseph T. McCaddon is the
holder of $50 shares OF the preferred
stock; Catherine A. Cooper, SEQ shares;
Stanley f. Cooper. 200 shares, and l.. X.
Cassard. SO shares. all purchased, &C
cording TO Mr.. Holmes, of the plaintiff 5
attorneys, previous to 1910.
The basic allegation Of the suit is that
the Baltimore 4 Ohio stock which the
Union Pacific seeks 10 distribute TO IT.
common stock holders constitutes part
of the fixed assets and capital investment
Of the company and that no part Of it was
paid for out of the net earnings or income
OF the railroad. AS such, il is claimed that
all the stockholders have an equal pro
rata interest In the assets over and above
the companys bonded Indebtedness Re
ferring TO the proposed distribution OF
Baltimore e. Ohio stock. the complaint
further states
Such payment, if made will constitute
an unlawful diversion Of assets of the
company to the amount of the par value
Of the said stock of the Baltimore ohio
Railroad Company"
Pending the hearing Of the allegations
contained in the bill of complaint the
court is asked to enjoin the defendants
more & Ohio stock to the Union Pacific
common stock holders. Mr. Holmes said
Yesterday that other preferred stock hold
ers would be requested to join in the suit.
In addition to this action, it was learned
Yesterday that the officials of the Union
Pacific have also received protests from
three stockholders against the distribu-'
ton of Baltimore & Ohio stock. one Of
! which was from Philadelphia. ii. W..
Clark who recently succeeded Maxweit
| Evarts as general counsel for the Union,
| Pacific said that the company had no.
| fears that the allegations made IN the
suit begun yesterday would be sustained
| by the court.
r. 8. Iovett chairiiian of the board OF
directors, said he could not see wherein
the preferred stock holder had any legal
| cause for complaint against the plans 10
| distribute the surplus. This is also the
! position taken by the board as a whole.
! Judge Lovett said that on June 81 last the
| Union Pacific had Sl5l,VOcO surplus. not
taking into consideration the cash re-
| ceived from the sale OF the Southern Pa
| cifc stock lie asserted that the bonus In
cash TO stockholders would be taken from
this surplus.
Judge I.ovett also announced that the
notice OF procedure and the form OF the
warrant covering the distribution of the
Baltimore & Ohio stock would be made
| in ample time. He said that this was TOO
complicated question to be dealt with III
detail at this time. Unless tie company
is otherwise enjoined. the distribution of
Baltimore & Ohio stock will he made on
| April 1 to common stock holders Of rec
| ord on March 3