Newark evening star and Newark advertiser., 1915-06-29
Union SASH CO.
DEALS ARE TOLD
IN COURT PROBE
President Said to Have OBJ
tanned $4,000 on Deed Day Be-
fore Bankruptcy Proceedings.
LAWYERS COURSE IN CASE
Is SUBJECT OF ATTENTION
Man Denies implications, but Is
Rebuked by Judge for Evad-
ing Direct Replies.


Company, local concern. obtained
$4,000 of the company's assets by a
deed executed one day before bank
ruptcy proceedings were begun and
the disappearance of $500 worth of
lumber were the chief disclosures
, made last night at an investigation
into the affairs of the company in TIE
Newark branch of the United States
District Court The hearing, which
was before Judge Thomas G. Haight,
was one of the longest held in that
tribunal. and after several hours of
taking testimony the hearing was
adjourned until July H.
United States District Attorney j.
Warren Davis, counsel for creditor,
is seeking to set aside a settlement
made by the Union Sash and Door
<Company and its creditors. The set
tiement was on 40 per cent. basis,
10 per cent. having been paid in cash
and the remainder in notes which
have not been paid. Mr.. Davis
charges the composition was effected
bv fraud and collusion, and that the
company had enough assets to pay
all claims In full
While Charles H. Wagner, an Eliza
pCtil idWJSl, was DtlnB QulhZtu, llS
execution of a deed from the Union
Sash and Door Company to Mr..
Merlis was brought to light. Wagner
had been engaged as counsel for the
company after an involuntary petit
tion in bankruptcy was filed against
it, At q previous hearing Merlis tes-
titled that Wagner promised to put
through settlement with creditors
for $50.
Wagner Denies Charges.
Merlis also told how Wagner de-
manded other sums after the petition
for a settlement was circulated among
creditors. Last night Wagner denied
all the indiscretions which Merlis said
he had been guilty Of
The Elizabeth lawyer emphatically
denied that he drew up a deed giving
Merlis the company before the bank
ruptcy proceedings were talked of.
'Merlis and Samuel Mushler vice. |
president of the company, came to |
me q week before the bankruptcy"
said Wagner THAT was the first
time / knew the Union Sash and
Door Company existed. They wanted |
me to draw up that deed and 1 did
so. The bankruptcy proceedings were
not mentioned at that time
1911 L ~ O. LuCb liidl LuO Q0CQ was |
executed only day before the in
voluntary petition in bankruptcy was
filed?" inquired Judge Haight.
The witness insisted that when hel
took an acknowledgment of the deed |
the insolvency proceedings were not
mentioned to him.
Can you explain why you did not
mention this deed to the receiver,
referee or anyone else unt:! this |
timer" asked Davis.
Mr.. Wagner did not answer this |
question directly. He went into an |
explanation of his connection with |
the affair, to which the district at |
torney refused to listen. Many times |
during the hearing Davis reminded |
the Elizabeth lawyer that he failed |
to answer simple questions. Each |
tine Wagner made detailed expIana- !
tions which failed to give the infor-
nation sought. Judge Haight finally |
! instructed the witness:
Answer the questions. with yes
or mo- when possible, Mr. Wagner. |
Don't make a speech; it's getting too
late for that"
Tells Of Merlis's Course.
Mr.. Wagner began his testimony
by telling how Merlis complained his |
creditors were pressing him and the
advisability of filing voluntary pc
: tition in bankruptcy was discussed.
From the information I gathered
through Merlis," continued the law
yer. 81 never considered the COM
pany worth anything. I told Merlis
I was unfamiliar with bankruptcy
practice, and suggested we consult |
Samuel Koestler, of Elizabeth, be- |
fore doing anything. Before we took |
any steps the involuntary proceed
ings began.
"When we began to talk Of set
tlement Krusen insisted he be paid in
full for his claim of s1,250. At first
a fifteen per cent. composition was
proposed. Creditors would not stand |
for that. Merlis wanted to go ahead
with the settlement, and / told him
] must have a $50 retainer first. |
Later / was to submit him a bill for
my services"
Harry Krusen, of East Orange, is
the creditor who caused the probe
into the affairs of the company. He
is lumber dealer and sold s1,25O
of lumber to Merlis's concern, which
was not paid for.
did you promise Merlis to put
through composition If he paid you
s50?" inquired the judge.
'That is absolutely false and ridic-
ulous," answered Wagner.
The witness then gave his opinion
as to the value of the Union Sash
and Door Company book accounts
which Krusen said were sufficient in
themselves to pay all liabilities.
Wagner testified he considered the
accounts worthless, because Merlis
had told him all the collectable ac-
counts had been collected.
Mr.. Wagner testified he deposited
s901.72 with Referee Edwin G. Adams
to pay the costs of putting through
a composition of twenty per cent. A
few weeks later an additional $501.73
was required by the referee to defray
expenses incurred during the delay.
''Merlis at first refused to put up
the additional $780," said the witness,
ssuntil / told him that the referee
said the 1901 would be impounded by
the court to pay administration ex-
penses IL the composition was aban-
doned / believe he mortgaged some
property and got $500, with which he
gave me the needed 5000
Krusen's Complaint.
Then Mr.. Krusen called me up and
told me we were not treating him
fairly. He said Merlis had given him
a mortgage to secure his 1,250 claim,
but that Merlis placed a $500 mort
gage on the same property"
The payment of 500 to George
Furst. a local lawyer, for his work
in connection with the bankruptcy
proceedings was then brought up.
Merlis had testified that Wagner told
him F'urst would have to get 500 for
his work. Merlis sent Furst check
for 500. The check was returned,
and Merlis was informed Furst |
wanted cash.
ibid you tell him to pay Furst that
monev?'' asked Judge Haight.
at lid not replied WaRner.