Evening journal., 1919-09-12


makes numerous allegations of fraud on
the part OF certain OF the directors. He
alleges that in 1911 and 1912 the direc-
tons frsudulently issued to themselves
$40 shares OF the stock of the company
without paying for it and on which they
Received dividends, the total amount re-
oeived from these $40 shares being Ss4,-
<l50 1t is also alleged that from Sep
lem 1911 to December 1917, they ap-
appropriated 10 themselves large sums of
money. aggrecating about S45, 600. claim
ng it was salary due them as directors
In July 1917. the bill states, the com
oany was in a Aourishing condition and
N addition TO its plant and boats had
upwards of 100000 in cash and accounts
receivable. above all indebtedness.
In July 1917 the bill alleges that
Iofand and Lank formed a fraudulent
and unlawful scheme to divert large
portion OF money from the company and
70 put the company out of business. It
Is alleged than July 30, 1917, the direc-
tors authorized Loiland to sell the fac
tory and steamers for S225,000 He is
alleged 70 have sold n few days later to
Elwell and Company, of New York, the
steamer Henlopen for Sl75000 and 20
have called a special meeting of the
directors. At this meeting, the bill
says. he made no report of the sale OF
the steamer although il is alleged Lank,
Joseph and Tunnel had knowledge of
IL, but laid before the board a pretended
offer from Robert Pennington 20 pur-
chase the factory and two steamers for
S225.0O0, including the "Henlopcn,"
trh fol, 1.I Al 4. a.II -
and Company. A special meeting of the
stockholders was then called for August
10, 1917. when the sale to Pennington Of
the plant and boats was authorized, al
though there was a small vote against
it,
II is alleged that Pennington never
paid the S225,OO0 as stipulated but that
Lohand and Lank gave him title 20 the
plant and boat "Giford,' but that false
entries were made in the books 10 make
IL appear that the amount was paid.
The bill filed by Receiver Cahall
states that Lohand and Lank also made
10 appear as credit on the ledger 10
Pennington Sl7 900 and Sl4s,750 that |
Elwell and Company had paid for the /
boat 'Henlopen.' and that other fraud /
ulent entries were made on the books TO
tho account oi Pennington TO make up
the S225,000 that he was supposed TO
pay. The bill sets out that Lonand
contends that, in the sale OF the boat
-'Henlopcn7 TO Elwell and Company, he
was acting as Penmgton's agent.
Tho receiver alleges that the company
did not receive large amounts of moneys
received from the sale of products of
the factory that 1t rightfuly should
have received after the alleged sale TO
Pennington. They pretended that these
moneys, It is set out, belonged 10 Pen
ington
shortly after the Pennington trans
action a new company was organized,
the Lewes Oil and Chemical Company,
and 10 is averred that pretended CON
veyance OF the plant and steamer Gif-
ford was made 20 this new company by
Pennington. Pennington was made presi-
dent of the new company; Lofand, vice.
president and manager, and Lank, treas
urer, and Joseph aud Tunnel became
stockholders The bill states that by a
fraudulent scheme, Lohand, Lank, Joseph
and Tunnel brought about the dsso.
luton of the Lewes Fisheries Com
panv. and that In carrying out this dis
solution plan a large amount of none,
was diverted from the company anl
stockholders p
The receiver charges that the Loves
Fisheries Company plant was never s
legally sold TO Pennington, and asks for !
an accounting Of all moneys since that v
alleged pretended sale. Some books and $
papers that it is alleged Lofand and {
Others have refused 10 give up are also
asked for Il
Should the receiver win the suit de- a
PENDANTS would have TO pay over sew d
eral hundred thousand dollars 10 the f
old company. The defendants have un- {
til early next month TO file their answer. il
The bill of complaint in Chancery
Court, of Receiver Cahall, which sets out p
all the alleged fraudulent transactions z
Of the defendants in part complains;
That by the decree of this Honorable "
Court entered in the suit of Charles " q
Jones vs. Iewes Fisheries Company, e.
William c. Loaand William H. Book j
hammer James T. Lank. John r. Bay l.
lis, William J. Thompson, William r. "
Tunnel and Harland NJ Joseph, your Il
orator was appointed receiver of Lewes s,
Fisheries Company on February IL, 1919 .,
That the corporation owned factory O
for the manufacture of oil and scrap s,
near Lewes, and two steamers. That IN
from shortly after lis organization the a.
company was actively engaged in busi- il
ness until deprived of the control of its
said steamers and factory as herein G,
after set forth: That from May, 1917, ii
until deprived of their control. the com a
oany owned and controlled the steam. v
ars Henlopen and James NJ. Clifford, for
.he catching of menhaden fish. lC
That the company had an authorized a
'apital stock Of 100000 divided into III
1000 shares Of the par value of 500 Ii
,ach. n,
That the 1000 shares of stock were is br
ned by the officers of the company. That "a
bout January, 1912, the certificate of sa
Of the company was
mended by increasing the capital stock an
o S500000 of 5000 shares of 500 each. p,
That only a small number Of the addi- Ia
ional shares authorized by the amend III
lent we're in fact issued, the particulars nc
hereof being hereinafter set forth. tr
That the above named defendants. fr
William c. Lonand, William H. Book pa
ammer, James T. Lank, John A. Bay by
IS, Nilliam'J. Thompson and Harlan NJ
oseph were elected directors of the tn
ewes Fisheries Company at the time pa
+ its organization, and were reelected tn
ach year OF the life Of the company. 81,
hat one, David W. Burbage, WAS also Co
lected director at the first meeting of su
he stockholders and continued 70 act
director until sometime during the fol
ear 1912, when he was declared dis w
ualiiied as director by his associates. an
nd ceased TO act as such. an
That thereafter the number Of direc an