The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-06-24
BANK RECEIVER
SUES DIRECTORS
FOR S2,5OO,OOO
Ten Former Officials Of
Washington Trust Are
Made Defendants.

Ten former directors of the de-
funct Washington Bank and Trust
Company were named defendants
today in a $500 900 damage suit
filed in circuit court.
Alleged losses to the bank aggre-
eating 81 975, 975.17, over period of
years, we're caused by acts of COM
mission and omission" by the direc-
tors. the complaint alleges.
The suit was filed by Oren s.
Hack, receiver, through his attor-
neys, Joseph Collier and Samuel
Miller. Order for the suit was given
by Circuit Judge Earl r. Cox May
%, after hearing on petition for
instructions filed by Hack
Defendants are Erastus L. Goth
rell, William c. Hayward, Edward
A. Kahn, Thomas A. Pass, Francis
w. Payne, John Powell, Mark V.
Rinehart, Jesse A. Shearer, Carl
Weyl and Carl A. Ploch.
Charges Made on Report
Majority OF the charges made in
the complaint against the directors
were contained in a confidential re-
port compiled two years ago by
Spradling 81 Jordan, certified &C
countants.
According to testimony in circuit
court by Brandt c. Downey, former
bank receiver, the report was made
at his request, but no action was
taken.
Filing of the suit follows closely
after announcement of a new ap-
praisal of the banks assets which
revealed that present value of the
receivership holdings is approx
imately 1904 900.
The figures indicate a shrinkage
of 35 per cent from the former
book valuation of more than $780,
900. Less than a Is cent dividend
to depositors was predicted by Hack
Complaint Is Bulky
The complaint, bulky document
of figures, recites the history of the
bank from its beginning, June 5
1918, after operation as the West
Side Trust Company from March
8, 1912.
When the bank closed on Oct
27, $780, indebtedness to depositors
was $2,535, 8l729, although cash and
liquid assets totaled only $780,
9l3.86, the complaint states.
Funds of the bank were used "in
the promotion of hazardous business
transactions in which the directors
were personally financially inter-
ested," the complaint charges.
classification Is Charged
Allegation also is made that the
directors "unlawfully, negligently
and knowingly permitted the books
of the bank to be kept in such q
manner that they falsely showed g
sound financial condition"
Deposits were accepted after the
directors knew of the insolvency oil
the institution, it is charged.
Directors also are charged with
permitting the issuance of bank
statements which were false and
untrue, in that they did not reflect
the true condition of the bank"
Dividends aggregating 100000
were paid out of capital funds, al
though the bank never showed a
profit nor were ever in condition to
pay dividends, the complaint alleges
Other Charges Made
Other charges are that directors
permitted j. Edward Morris, de
ceased president of the bank, tC
sell worthless paper to the institu-
ton.
Suit filed in circuit court to col
lect 100000 from the Amsterdam
Casualty Company on the bond COW
ering officers of the bank has beer
transferred to federal court.
Order for the transfer was issued
by Cox Friday on petition of at
torneys for the bonding companies
who cited that the defendant is in
corporated out of the state.
The suit is one of four, seeking
1925, 900 filed by Hack, after alleged
defalcations had been revealed