New-York tribune., 1918-03-23
Preferred Stock Holder
Says Changes Were Made
to Show Loss
Assets Sale Attacked
Company Denies Charges and
Opposes Petition for
Receiver

Justice Hotchkiss heard argument
and reserved decision yesterday on the
application of the Holland Security
Company for the appointment of re-
ceiver for the Greenhut Company. The
Holland Security Company is a la ge
holder of Greenhut preferred 81 ok,
having been q creditor of tie J. B.
Greenhut Company, which went into
bankruptcy, and before that large
holder of securities in the Siegel-
Cooper Company.
Martin J. Conboy. counsel for the
Holland Security Company, told the
court that it was provided that in case
the Greenhut Company was dissolved
all stockholders were to shag. alike,
but in the division OF proceeds from
the sale of merchandise the preferred
stockholders were to be paid first
1t is alleged that there has been a
manipulation of figures which make the
proceeds for the year 1917 appear less
than they were and that without CON
suting the stockholders the trustees
OF the corporation voted on March 8
to sell all of its stock TO Gimbel
Brothers,
Says Grecnhut Dominated Others
The voting trustees are j. B. Green
hut, Louis V. Bright and Leo Schesin-
ger. In taking this action Mr.. Conboy
said the other trustees were under the
domination of Nj. Greenhut.
After the figures Tor the year 1917
had been prepared they showed d
profit" said Mr.. Conboy land for sell
fish reasons, having to do with the de-
sire of Greenhut and the Monmouth
security Company to share alike with
the preferred stockholders they de-
Vlsed scheme to show that business
mad been done at a loss for the year"
Mr. Conboy said that one method in
pursuance of this alleged scheme" was
TOT the Greenhut Company, upon the
ADVICE of j. B. Greenhut, arbitrarily to
deduct q per cent from the 1917 in
ventory. thus reducing the proceedings
100000
The attorney referred to this alleged
acton as a strong arm method" The
Holland Security Company checked uD
me receipts OF the Greenhut store for
1917 and became convinced that thev
were much more than the 80 .239. 900 re-
ported.
Discrepancy Is Alleged
The Monmouth Security COMPANY
owner OF the real real estate occupied
oy the dry goods concern. received
$4o3.9SS on per cent basis of the
gross sales. which figured out S1l.34Q
~. Iherefore 1t was argued there
$2.000,000.
1t was further stated that the Metro
polltan General Products Comnanv
was organized to take over government
contracts that were being filled bv the
1feenhut company. The statement was
mace IN an affidavit that the money to
pay~1or the metropolitan capital stock
was taken from the funds of The
Greenhut company, and that Nelson "
Ireenhut, son of J. B. Grcenhut. was
mode executive officer at salarv Of
o.0G0 year
EN-J Justice David Leventritt. for the
defendants, argued that there were no
grounds for the receivership. or for
an order to restrain them from dis
posing Of their assets to Gimhal
BROTHERS. or going out Of business oll
OF which is asked by the Holland Sc
curlty Company. Mr. Leventritt ea;d
that the defendants had acted for tho
pest interests OF the stockholders. and
mat al their acts had been duly au-