American Falls press. [volume] (American Falls, Idaho) 1907-1937, 1919-05-30
CHARGE VIOLATION BLUE SKY
LAW BY IDAHO FREE PRESS
Restraining order Sought in District
Court to Pevent Cooperative Com
paRy's Sale of, Stocks and Bonds.

CALDWELI-That the Cooperative
Publishing Company of Nampa has
wholly failed, refused and neglected
to comply with the statutes of Idaho
providing for the supervision of in
vestment companies, commonly known
as the"blue sky law" in the organiza-
ton of their company and the disposal
of their securities is the basis for court
action filed Saturday afternoon in the
District court here by L. l.. Young and
C. M Bumgarner, asking restraining
order to prevent the corporation from
selling stocks and bonds, or permit
ting the exchange of bonds for stock,
or Withdrawing or paying out the cap
ital stock of the corporation until the
Cooperative Publishing Company
complies with the Idaho statutes.
Judge Edward L. Bryan has order
ed that the defendants, who include
G. w. Scholtz, manager of the Coop
erative Publishing company, and the
present acting board of directors, ap-
pear before his court next Saturday
morning at 10 o'clock to show cause
why the restraining order should not
be granted. L. L. Young, who is re-
sponsible for the action brought
against the Non-Partisan organ, is one
of seven who are serving on the board
of trustees, being elected to that po-
sition November 10, 1918.
Charge Failure to Comply.
According to the complaint, the
publishing company has never COM
piled with the Idaho statutes having
never flied with the state bank exam
liner such statements as are requir-
edd by statute and since its organiza-
ton March 1898, has never COM
piled with the state laws in any man
ner as regards the organization of a
corporation under the Idaho statutes.
Because of this negligence the cor
poration is alleged to be unlawfully
selling stocks and bonds and has be-
come liable to the fines and penalties
provided under the act for the viola
tion of it's terms and provisions.
Court Action Last Resort.
May 5, according to the complaint
the plaintiffs in writing demanded the
acting board of directors to comply
with the Idaho statutes and on May 10
the acting board of directors refused
to take any action on the matter
Court action was taken as a last re.
sort to compel the management of the
corporation to comply with the STATE
laws.
1t is further pointed out in the com
plant that the financial condition o.
the company is at present at such {
low ebb and its resources are being So
rapidly exhausted that the sale of fur
ther bonds will produce funds which
will be used, in the opinion of tht
plaintiffs, in paying for the operating
costs of the concern, thereby purchas
50 f11o hz., Ic Will nxyha Oh oil h.
property of the corporation to the to
tai loss of the defendants and othe
stockholders. Bonds are being ex
changed for stock, thereby affecting
withdrawal of the capital of the cor
poration.
Property of the corporation is val
ued at less than $25,000, encumbere,
to the amount of $1,000. Bonds t,
the amount of $2), 1000 have been sol
and that advance subscriptions to tn
Idaho Free Press, published at Nampa
total about $4,000 and the corpora
tion is said to have expended tn
whole or the greater part of these pro
ceeds.
Other Charges Made.
This court action developed from
long standing controversy regardin
the legality of the election of G. v
Scholtz as manager of the corpora
tion and contesting the election of tn
present board of directors. Anon
violations of the rules of the corpoi
alton as set forth in the complaint
the election of five directors March
Chen the constitution of the organiZa
tion called for board of three men
bers
Bonds to the value of $4,000 wer
authorized by the stockholders in th
corporation to be secured by a chatt,
mortgage to the trustees of which
L. Young is one. The value of th
property is estimated at present /;
s25,000 which it is alleged in the con
plant. under the methods of finanC
as at present employed, cannot poss
bly, be increased
Alter Date of Bonds.
1t is further alleged that in Noven
ber the stockholders determined
date their bonds January /, 1919,
bear interest at per cent, maturiI
in ten years. April 2, after mar
bonds had been sold, the board of d
rectors changed the terms Of Il
bonds and dated them as due and pa