New-York tribune., 1920-12-29
Directors Named as De-
iendants on Charge of
Mismanagement Com
promiseforS So, 100000
LAWYERS Awarded
S333,333 in Fees
Balance Will Be Restored
to r. Il. Company, An
other Party to Litigation

The restitution suit begun in 1916
by minority stockholders Of the New
York, New Haven & Hartford Railroad
Company against certain directors to
recover for the company $150,OOO. 900
lost to it as a result Of alleged mis-
management on the part of the d.
rectors. was settled yesterday by q
compromise agreement, and with the
approval of Judge Charles NJ. Houch OF
the United States District Court.
According to the agreement the di
rectors are to pay to the New York.
New Haven & Hartford Company the
sum of $2,500,0O0, minus 1888 3333 .33
which the court awarded as fees TO be
paid complainants' counsel.
The compliments were Edwin
Adams Mott, julius C. Morse. George C.
Fisk, James F. Ray and Mary NJ. Clark.
Their suit was based on the find; ngs
of the governments dissolution suit
against the railroad company. It al
legged waste and mismanagement on
the part of certain directors Of the
company, which resulted in the denrc-
citation of their holdings to the extent
Of $150,o0O,OOO
Morgan Among Defendants
The defendants named in the suit
were William Rockefeller, Charles NJ.
Pratt, Lewis c. Ledyard and J. Pier
pont Morgan, Herbert Satterlee, Will
liam p. Hamilton and Lewis C. Led
yard, as executors of the will .of J.
Pierpont Morgan, and Florence A. V.
Twombly, as eXecutrix of the will of
Hamilton Mex. Twombly, and the New
York, New Haven g. Hartford Rail
road Company.
The case was to have come to trial
next month before Judge IIough. Yes
terday morning cour sci for both sides
had a long. conference with Judge
Hough, at the end of which Judge
llough filed an order disseminating the
suit and relieving the defendants of
all liabilities on account Of any of the
matters set up in the stockholders
complaint.
In decree in recognition Of a pc
titon made by Lawrence f. Berenson
solicitor for the complainants, and Asa
P. French, Arthur Berenson, Francis
P. Garland, Bernard Berenson and
Frank NJ. Swackcr. counsel for the
complainants, Judge Hough fixed all
lowances for expenses said to have
been incurred by the attorneys, and
for their work, at one-third Of the
amount of the compromise, 1888 1888 33
This money is to be paid to Arthur
Berenson and distributed by him to
himself and other interested counsel.
Defendants Pay Another Defendant
In a memorandum accompanying. the
discontlnuance papers Judge Hough
said:
"The compromise Of suits and actions
is generally a matter private between
the parties, and the only reason known
to me for submitting this settlement to
the court is the unusual fact that it
consists in the payment by one set OF
defendants to another detenuant of a
large sum of money in consideration of
a general release.
"Thc individual defendants are buying
their peace from the plaintiffs by pay
ing money to the corporate defendant
The only interest Of the plaintiffs in
this suit, however. is to get money for
the corporate defendant, and counsel
fees and expenses for their own solicit
tors.
"However, since the appreciation of
the court has been asked, it is given
for the following reasons:
This bill alleges conspiracy to
cause the corporate defendant to violate
the Sherman act by doing very eX-
pcnsive and Improbable things. There
fore, says the bill, the individual de
PENDANTS must pay as damages what
their conspi,ac cost the New York,
New Haven & Hartford Railroad Com
pany. have regarded this as an ex-
tremely doubtful cause Of action, diff
fcult to prove, and, in outcome, uncer-
tainty itself"
Mergers Sole Basis, Says Court
Judge Hough goes on 10 ssy that the
bill has been retained in spite of re-
pcatcd attacks upon il mainly because
of one outstanding fact: That the di-
rectors of the railway, or a majority If
them. pursued the consistent course of
acquiring everything that could be
called competing transportation sys-
TENS in New England, and many that,
in the judges mind, could not be called
competing, and paying for such acquisi-
tions great deal of money which, in
Continued on pass flvc)