Evening journal. [volume] (Wilmington, Del.) 1888-1932, 1917-04-13


The +. !. DUPONT de Ncmours & Com.
pany is a corporation organized under
the laws of the State of Delaware, in
corporatcd September I. 1915, and.
prior to the filing of the bill, had pur-
chased all the assets and assumed all the
liabilities of the Powder Company. pay
ing the Powder Company in cash 81 ,4S4,-
100 $50 66l 700 par value in dcbenture
stock and SOS ,S54 200 in common stock.
All of the common stock, at the time of
bringing suit, had been distributed two
for one to the holders of the shares of
common stock of the Powder Company
Since the incorporation Of the Z. l. du-
Pont de Nemours & Company, the Board
of Directors and officers of the two com
panies have been the same. and the T..
l. DUPONT de Nemours & Company has
been the operating company
The dupont Securities Company is a
corporation organized under the laws of
Delaware March. 1915, with capital
stock of 81 100000.
The controversy is over the DISPOSE
ton of a large block of common and
preferred stock of the Powder Company
purchased by Pierre 5. DUPONT for him
self and certain associates from 7. Cole
man DUPONT in February, 1918.
In December, 1914, T. Coleman du-
Pont was the largest individual stock
holder of the Powder Company, own
ing 1850 shares of its preferred and
63,3l4 shares of its common stock. He
was a member of the board of directors
president of the company and a mem
Der of the Finance Committee, and con-
tinued so to be up until March, 1915
Pierre $. dupont was a vice president
of the Powder Company, a member OF
the board of directors and chairman OF
its Finance Committee.
On December IA, 1914, Coleman du.
Pont went to Rochester, Minnesota, tC
undergo an operation and remained Their,
until after March 10, 1915.
During Coleman's absence Pierre was
the acting president of the Powder Com
pany and at the annual meeting hello
IN March, 1915, he was elected its presi
dent
For a number of years prior to De
cember, 1914, and up until the beginning
Of this suit, Alfred l. dupont was a vice
president of the Powder Company,
member of its board of directors and Of
is Finance Committee, and was the mex
largest individual stakeholder of tn,
Powder Company owning 37,767 share
of its common stock.
William DUPONT was, during the sam,
period, a vice president, a member o
| the board of directors and of the Fl
nance Committee.
The Finance Committee consisted o
four members, namely, Coleman, Alfre,
! l.. Pierre and William. These four wer
the largest stockholders of the com
pany.
i'rior to going to Rochester in De
cember, 1914, T. Coleman dupont mad
an offer to sell to the company 20,70
shares of its common stock at Sl60
share for the purpose of distributin
the same among its more important EN-
ployes at the price paid by the com
pany. This offer was presented to Oh
Finance Committee and considered b
it at a meeting on December %, 1914
Pierre, Alfred l., and William bein
present.
On February 2s, 1915, Pierre purchai
ed for himself and his associates, job
~. Raskob, treasurer, Irenee duPon
Lammot DUPONT and r. r. NJ. Carpel
ter, all of them directors and some
i
D Company, and A. Felix DUPONT, all (
the holdings of Coleman, namely, 63,3l
shares of common stock at 5000 pr
share and 1850 shares of preferre
stock at $500 a share.
Briefly stated, the plaintiffs charp
in their bill that the meeting of III
Finance Committee on December 2
1914, the entire committee was in fave
of the purchase of the stock, but Alfre
and William considered Sl60 per shai
too high a price to pay and considere
that the company was not justified
paying more than SIPS per share for II
stock at that time;
= That a resolution was passed to this
effect which Pierre was instructed
communicate to Coleman's agent, L.
. Durham. and that the duty rested upc
Pierre TO continue negotiations wit
J Coleman for the purchase;
That, from that time until the pu
chase by Pierre and his associates, Il
stock was rapidly increasing in valu
81 owing to large contracts made with FL
Z ropean nations at war for the supp
! of explosives, and the duty on the pa
. of Pierre of continuing negotiations al
of giving to the company the benefit
j his negotiations for the purchase WI
still existing when he purchased all
Colemans stock for himself and his a
1 sociates on February %, 1915;
d That Pierre concealed from the
nance Committee and the Powder Cor
pany information relative to the neg
tiations for the said stock and conceal
! from Coleman the true attitude of Il
Finance Committee, and thereby Ike
}. the other members Of the Finance Cor
= mittee, the Board of Directors of &
, company and Coleman DUPONT in ign
u rance of facts which were within
knowledge, and which it was his duty
), disclose, and that he thereby was e
abled to acquire the stock for hims'
and his associates, when the opportu
ity, at least, to purchase the sto
+ should, in the performance of his dut
have been presented to the Finance Coz
: mittee and the Board of Directors, wi
= a full disclosure of all the informati
= in his possession in relation TO the n
r gotiatiOns with Coleman and in relati
e to the increase in the business of {
e company, which affected the value of (
= stock.
= That Pierre dupont and his associat
IS would not have been able to make {
a purchase involving nearly $l4,O00,C
:, without the aid of the credit of the co
r pany, and that he and his associat
d used their official position and facts wit
e in their knowledge relative to the fina
l. cial business of the company in obta
ing the credit necessary to consummt
the transaction.
The defendants contend that the
ton of the Finance Committee on |
l. cember %, 1914, was final rejection
L Coleman's offer to sell 20,70O shares