Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-17
WARDMAN GROUP
REPLIES TO SUIT
OF STOCKHOLDERS
Claim Coercion to Make De-
PENDANTS Buy Stock at
Excessive Price.
HEARING EXPECTED
DURING AFTERNOON
Individual Control With Deception
of ANY One Denied by Real
Estate Men.

GlOn OOuTb IN AlSXdnoEld IOQdy, Tie
Wardman Mortgage g. Discount Corpo-
ration, together with Harry Wardman
and several of his business associates,
opposed the suit filed recently on be-
half of certain stockholders, in which
they asked for appointment of q re-
ceiver and an injunction to prevent the
defendant from taking steps to dissolve
the mortgage and discount corporation.
The reply of Wardman and the other
defendants was filed by Attorneys
Daniel Thew Wright and Meredith M.
Dallbin shortly before the time set for
. hearing before Judge William p.
Woods in the Corporation Court today
The compliments seeking appoint
nent of receiver and the injunction are
Robert B. Smythe, Theodore S. Crate
and Charles D. Davis.
The others named as defendants in
addition to the Wardman Mortgage q
Discount Corporation were Harry Ward
man, Thomas p. Bones, Henry j. Robb,
j. Floyd Cissel, Robert N. Taylor. X.
Parrish Wood, jr., and James d. Hobbs.
The defendants begin their answer
by declaring that the total amount Of
preferred and common stock held by
the plaintiffs who filed the suit Is less
than per cent of the total aggregate
Of the outstanding common and pre-
ferred stock.
Charges Are Answered.
''This defendant denies that the
plaintiffs filed their bill herein in be-
half Of any other persons but them
selves, denies that they represent any
other stockholders but themselves and
denies that the aggregate holdings Of
the stockholders whom your complaints
represent amount to more than 100000
IN actual cash." the answer began.
This defendant AYERS that this
action is not brought in good faith and
not brought for the benefit OF any other
stockholders, but Is brought by the said
plaintiffs for the purpose Of coering the
defendants named In the bill to pur-
chase their said stockholdings at an
excessive price beyond its actual value"
The answer denies that Wardman,
Bones g. Hobbs managed and operat-
ed the said corporation, but claims that
the affairs Of the corporation were "at
the time mentioned in paragraph Of
the bill under the control OF and man
aged by a board of nine directors, who
were independent md not dominated
or controlled by Wardman, Bones 81
Hobbs or by any one else
Deception Is Denied.
4uI8 0E1cuUHnJy IDC AIloMCE COIl~
tinued, denies that the said corpora
ton or any of its affairs we're conduct
ed and managed and that anything
relating to any of its affairs was con-
Quoted and managed in such manner
as TO fraudulently deceive, mislead or
misrepresent to compliments or to any
one else or to the public generally, as
to the interests and investments of the
defendants, Wardman, Bones q
Hobbs, and the other members of the
said board of directors, the assets of
the company, the class of securities to
be dealt in by said company, the pur-
pose Of organization, the plan under
which stock was to be issued.
The answer of the defendant denies
that they have controlled either di-
rectly or indirectly, most or all of the
other six companies named IL the pc
tition. 1t is denied that Wardman,
Bones g. Hobbs, or any one else, have
burdened the assets of the defendants
corporation with the indebtedness and
liability of anysof the other corpora
tons named in the bill of complaint.
10 Is claimed in the answer that Ward
han has loaned this company $4,29s.
Stock Issue Defended.
The answer also denies that Ward
man, Bones IL Hobbs had 1895
Shares of the common or voting stock
Pf the corporation issued to themselves
without payment of any consideration,
and denies that said issue was in oppo-
sition to the plan which the directors
advertised to the public generally, and
denies that said stock was issued with
out consideration.
The said stock. the answer alleges,
was issued to Wardman, Bones and Hobbs
in strict accordance with the law of
Virginia, according to a financial plan
which was prepared and submitted to
the Corporation Commission Of Viz
ginia in 1924.
The defendant is advised and be-
heves and AYERS on information and be-
lief that IL Is not inSolvent and was
not insolvent In January, 1929, or for
many months prior thereto" the an
swer continues. This defendant AYERS
that its only indebtedness consists for
the main part of franchise taxes to the
State of Virginia, taxes to the District
of Columbia, and declared dividends
which have not been paid TO certain of
its stockholders, together with the
aforesaid Indebtedness to Harry Ward
man of 1929.
This defendant has in its treasury as
assets on September 4. 1890, 1920
shares OF the preferred per cent stock
Of Wardman Realty & Construction Co,
Inc, an active going concern In the
city OF Washington, which owns the
equities in the largest consolidated
group Of hotels, public buildings and
apartment houses in the city of WASH
ington, which equities have heretofore
been appraised by independent and
competent appraisers at q valuation Of
approximately $1,000 900: said preferred
stock is redeemable by said corporation
at the price Of 500 per share"
Control Charge Denied.
They deny that on or about February
!. 1924, or at any time since, Wardman,
Bones 81 Hobbs took control, but claim
that the affairs of the defendants COR
poration have been directed by a COM
petent and independent board of d.
rectors.
Continuing its reply to the bill of
complaint, paragraph by paragraph, the
answer, further on, states:
This defendant admits that 1t has
ceased to do business, which cessation
has been occasioned by the general
financial depression throughout the
world and especially by the depression
OF real estate in the city of Washing
ton and cessation of building opera
tons In Washington Tor about two
years last past"
The answer denies that the board Of
directors have ever declared dividends
when there was no surplus available
for such purpose and also denies that
dividends were paid to certain stock
holders out Of the capital Of the cor
poration.
The answer states that the Officers