New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-06-15
Holland Security Co. Says
II Lost Through AL
legged Conspiracy.
MORGENTHAU ALSO
NAMED IN SUIT
Misconduct of Department Store
10 Detriment of Siegel.Cooper
Company Charged.

An action TOT SZtVuVtVVV. oaStu WI
allegations Of conspiracy. has been be
gun in the Supreme Court against Jo-
seph r. Greenhut, Benedict J. Greenhut,
Henry Morgenthau and Ben Hillman
by the Holland Security Company,
which for many years prior 70 1910 was
the owner Of 1874 shares OF the capital
stock OF the Siegel-Cooper Company.
II is alleged that through various
fraudulent acts on the part Of the dc
PENDANTS. under which they obtained
control Of the Siegel-Cooper assets, the
plaintiff lost its shares OF stock. worth
more than 100000, and its interest
in real estate. worth more than $1,000
600. and became the owner Of shares
and bonds Of the Greenhut-Siegel-
Cooper Company. which are entirely
worthless.
The Holland company complains that
1t was the owner Of 1875 per cent OF
the beneficial rights from contracts
made between Henry Siegel and Bene-
dict J. Greenhut. For many years i:
saws. the business Of the Siegel-Cooper
Company was conducted with large
profits
Acquire Altman Property.
In 1906, the complaint relates. Henry
Morgenthau and Joseph b. Greenhut,
without the knowledge OF the plaintiff,
acquired from B. Altman & Co. the
property it formerly occupied. Shortly
thereafter the two defendants who
took part in this transaction and Bene-
dict J. Greenhut organized Greenhut &
Co. with an authorized capital stock Of
Sl.40O.OOO.
Ben Hillman, manager Of the Siegel-
Cooper Company, also became asso-
ciated with the other defendants. Civ
ing them his advice. Joseph B. Green
hut was receiving $4,000 a year as
president Of the Siegel- Cooper Com
psny, his son, Benedict j.. $4,000 as
treasurer. and Hillman. manager $50,
O00 Benedict J. Greenhut also re-
ceived $4,000 year from Greenhut &
co. The amounts Of these salaries
were kept secret and were concealed
from the plaintiff, 1t is alleged.
The complaint continues that on
September %, 1910, Greenhut & Co.
were practically insolvent, and for
three years the defendants had been
using the organization, prestige
wealth and power Of the Siegel- Cooper
Company. in which plaintiff was largely
interested, for the benefit of Greenhut
& Co, in which plaintiff had no in
terest."
Consolidation Proposed.
About this time too. it is alleged. the
defendants entered into a conspiracy
10 obtain for Greenhut & Co. and for
themselves the property and assets Of
the Siegel-Cooper Company and thus
deprive and defraud the plaintiff of its
interest in the latter concern. 1t was
proposed by the defendants that a con-
solidation be affected between the
Siegel- Cooper Company, Greenhut &
co. and the Dry Goods Realty Company
and that the plaintiff transfer its in
terest TO the consolidated company in
exchange for interests and securities
IN the consolidated company.
The Holland Security Company re-
jectcd the proposition. In furtherance
Of the alleged conspiracy, the defend
ants. it is charged, represented to the
plaintiff that Greenhut & Co had
raised the period Of its Improbable
ness.
Then the plaintiff entered into a con-
solidation agreement Out Of this plan
the Greenhut-S iegel Cooper Company
was born with capitalization Of So
100000. 1t is charged that the repre-
sentation that Greenhut & Co. had
made a profit was not true.
The plaintiff also alleges that the de-
PENDANTS wasted the current earnings
Of the new corporation and impaired its
business "by promoting and paying to
Joseph B. Greenhut, Benedict j. Green
hut and Ben Hillman an amount in eX-
cess OF 100000, under the guise Of an
allowance for promoting the consoli-
dation Of said companies; "by paying
$4,000 TO Henry Morganthau. under
the guise OF Joseph b. Greenhut, pur-
chasing the stock i'm said enterprise.
by paying not only unjustihed divi-
dend Of 10 per cent In 1911, but also a
further dividend Of per cent in 1913,
the corporation had suffered heavy loss
by paying 10 themselves eXorbitant
salaries and commissions; by purchas-
ing unusually great quantities of mer-
chsndise on unusual long time credit
and forcing the corporation into bank