Evening journal., 1917-04-13

| illN not nave tIhtI credit OF ulNlkelNnlC |
| collateral which would enable them C. |
effect the loan in that amount, and |
therefore, could not finance the purchase
! of the stock Of Coleman without
using the credit of the Powder Com
| pany was entirely unwarraned by
/ the facts as fully set forth by Pierre in
/ his answer; and that, objection being
raised TO the purchase by two of the di
rectors of the company, Pierre without
admitting or conceding any obligation so
90 do. expressed to the board of directors
a Willingness to entertain an offer for
the stock.
It then rccited the action of the board
at its meeting on March TO- 1915, and
the opinion of the attorney of the com
pany that since there was not sufficient
surplus in the treasury for the purpose
the purchase of the stock would be il
legal
1t recited that after receiving notice
Of the suit the president called together
the board of directors to learn their
wishes in the matter, and that they inn
mediately passed a resolution of conf
dence in the accused officers and direc-
tors and by a vote of sixteen to three
disclaimed on behalf of the company any
right or interest in the stock in question,
which resolution was set out at length.
The subscribers TO the circular letter
stated that they owned or represented by
proxy at that time over 90 per cent. of
the total voting stock of +. I. DUPONT
de Nemours and Company and asked
that proxies be given to Pierre, Alexis
and John J. Rasllob, authorizing these
men to vote at the next annual election
d to be held on the 18th day of March
s ] - =. n 4
l a board of directors for the coming wear.
Twenty one names were then set out as
candidates for election to the board of
directors.
At the annual meeting referred to held
on March l3, 1916 the board of directors
named in the communication were elect
: ed and the proxies were also used in vot
ing for and adopting a resolution which
is set out at large in the defendants 73rd
J. request for findings of fact The reso-
J, luton contained a statement of. the
transaction in relation to the purchase of
. the Coleman dupont stock substantially
y as narrated in Pierre's letter to the
Board of Directors of March 3. 1918. and
recited the action of the Board of Direc-
tors and approved of the policy of the
= Board in refusing to offer TO purchase
~ the Coleman DUPONT stock and expressed
n approval of the policy of applying tho
a money and assets of the corporation tc
+ the carving on of ordinary business
, rather than purchase of stock of IN,
- Company except when brought out o
4, surplus for bonus or other similar legi
>. innate purposes It also approved tn,
o sound business Judgment of the direc
n tors in the declaration of dividends A.
3. ratification of the act of the Boar,
/, in refusing to offer to purchase Coleman
If stock from Pierre and his associates o.
-e condemnation Of the fraud practiced br
or Pierre and his associates, or approval o
u the policy of the Board, the resolution
ID cannot be accepted as expressing tn
ne views of the stockholders whose prox,
,k votes were obtained by means of tn
n circular letter The letter requisite
pc proxies for the purpose of voting for di
on rcctors and not for the purpose of act
of ing upon the resolution, and further,
at open TO the same objections of failur
to make full disclosure as is the lettC
at of Pierre to the directors.
an 1t is difficult to see on what groun
he the stock representing that purchase
k. from Coleman can be regarded as pre-
ed perly included in a vote upon such
Ii question. Every principle of honesty an
he rule of propriety and fair dealing woul
b. require that it be not voted. II Pierr
he and his associates, through breach of tn
m good faith which he, as agent for an
e. all as directors and officers of. the Com
IS panv. were bound to observe in their r,
to lations with the Company, cannot hol
,e, the stock unless the Company has ha
by a fair oportunity TO purchase it. it TO
at lows that it cannot be turned against tn
ms Company by voting it to sustain tn
10 unlawful methods of those so obtainin
ed it. Neither the action of the Board {
ne Directors on March TO- 1915, nor the a,
ad tion of the stockholders on March I,
NJ 1916, has any weight as against the Con
ad' pany and its stockholders in condemn
VA the action of Pierre and his associate
ne or ratifying that of the Board of ID
is rectors, or in determining that the Con
M pany had rejected an offer to purcha.
III the stock.
m II is averred in the answers of II
III defendants and vigorously contended
II! most able argument of their counsel tn.
ne the Company could have purchased Col
lu mans stock only out of its surph
"a" which, upon February 2S, 1915, it
~. claimed amounted to S. ,3O3, 599.S2. viii
no the amount required for the purchai
of was Sl2,903, 7l5, and that the use of an
an other funds would have impaired i
an capital stock. A statement of the final
CO.. cial condition of the Powder Compar
70 as of February 2S, 1919 showed thu
or it had in hand cash amounting to 81;
md 773 $4,000, and added to that bills r
Tho ceivable, accounts receivable, materia
bv and supplies, finished products and d
nat ferred charges, making a total workii
the capital, consisting of the quick or flu
md assets available for carrying on its GU
or rent commercial and manufacture
ion business, amounting to S40,7 ,045.S 50. I
en- vestments added to this brought {
ion total current assets up to S54 AGA. SS4.C
md The current liabilities, consisting of b
be payable, accounts payable, bond intere
ais and dividends payable, and defer
2 a credits, amounted to S4,660 ,5l5.62. lea
IRA ing an excess of current assets of 81
and 795, 36S.30 The fixed or stable asst
)ra- consisted of plants, real estate, constrt
by tion, fixtures, etc, amounting to So
ling l99,640ls. and patents, good will, Ell
pom S22, 800 ,3O602 making the total asse
less current liabilities, S96,3I5.3l4l
nu- Contract advances amount to 1913 9O32I
J of sc and funded debt ST., 354 100000 Tn,
ON two items, together with reserves
ours depreciation, amortization, ETC., amou
the TO S45, $40, 630.SS, which, deducted fir,
ular the above balance, leaves an excess
two assets of $50, 769, 6S3.7l. after deduct
De- not only of current liabilities, but fl,
had liabilities, consisting of funded debt a
$ of reserves for depreciation. etc, and
ding total of the contract advances. Deduct
NJ J. c-,,,, flfo ox-oaoo Of lf,h;I;4.o.