The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-03-23
Surety Company Is Sued for
$4,000 in DefunCt
Bank Case.
OVERT ACTS CHARGED
DeIinquenCieS of Nearly
100000 Are Charged
in Complaint.
BY DICK MILLER
Times staff Writer


headed a bank capitalized at
100000 and which once did as
much as s7,OOO,O0O worth of bust
ness annually. he never was bonded
for more than $1,000, it was charged
today in a suit filed in circuit court.
Defendant in the suit is the Lon
don and Lancashire Indemnity
Company of Chicago. surety for Mr..
Meyer. Complaint is for collection
of $4,000 of alleged bond liability.
Suit was filed by Walter Myers,
attorney for Thomas L. Garvin, re-
ceiver for the bank, and sets out
that the only protection of stock
holders and depositors against de-
linquencies by the president was the
$1,000 surety bond provided annual
~ by the defendant company
since 1916
Setting out numerous alleged
overt acts between 1923 and the
time the bank closed and a receiver
was appointed, Mary 4, 1888, the
complaint lists delinquencies total
ing nearly 100000, including alleged
misrepresentation of bank funds
through unsecured loans to other
officers of the bank. transfer of huge
sums to subsidiaries. and others.
Second Suit Filed
This is the second suit against
bonding companies covering the
bank, the first having been filed in
circuit court several days ago, ask
ING S1,250000, the amount alleged
to have been taken fraudulently
from the bank by Meyer and other
officers. Ferd S. Meyer. Julian j.
Kiser and Melville S. Cohn.
Organized in April, 1906 with a
Capitalization of $4,000, the COM
plaint states, the bank declared a
stock dividend of $4,000 in Oct,
1907. Subsequent dividends and re-
Capitalization increased the capital
stock to S300,00O with 5000 shares
at SIO0 each.
In August, $780, it is stated in the
suit, these 5000 shares were changed
to $4,000 shares at $40 each.
Interests in control decided in
Nav. 1881, to liuuidate the bank and,
without court appointment, named
the four officers liquidating agents
with salaries of $500 a month, the
suit sets out.
Delinquencies Concealed Is charge
L. is charged that during this
time. the bank did millions in bust
ness. concealed delinquencieS and
breaches from the surety and state
banking department.
While Meyers bond still was in
effect. it is alleged that Meyer
caused to be loaned to Sol S. klser
S1.75O: to Julian J. Kiser. $3.50; TO
Melville S. Cohn. $3.50, and to him
self. s19.250. These notes, it is
added. all are part que and unpaid,
representing a $4,000 loss to the
bank. exclusive of. interest, from the
date of the action, Jan. l, 1923.
Never caused to be organized,
July 8. 1928. the Meyer-KiSer Realty
Company which, the complaint
charges, was for the purpose of
cheating and defrauding. 1t is
added that he caused a resolution
to be passed by the bank providing
for contribution of 100000 to the
surplus of the realty company" and
that without legal right. this amount
later was transferred in cash.
other Charge Made
Further unwarranted loss was
taken when S19.275 was paid to the
Guardian State bank which later
closed, it is charged Mr.. Meyer was
interested in this: also the United
Securities Company. a Florida realty
company. which erected apartment
houses. One of them, the Tornado,
failed to have earning power and
REQUIRED that $4,000 of Meyer-KlSer
money be spent upon it for dividend
requirements and interest retire
ment. it is charged.
Further, on Nov. go 1926, Mr.
Never. it is charged. caused to be
transferred to the Meyer-Kiser bank
of Florida. S1l9.35790 in cash. which
now constitutes of loss of 26,357. 80
and which moqey transfer, the COM
plant alleges, was With the tull
knowledge of Mr.. Meyer that the
money never would be repaid to the
Mever-Kiser bank of indianapolis.
Transfers Are Claimed
In an effort to retire bonds, pay
interest and dividend requirements
and keep the stock market value
up. it is charged, S21 ,696.45 was ex-
pended on the Hollywood Homes
venture of the United Securities
Corporation, $4,000 to the Floridian
hotel, S18750 to the Robert Clay
hotel, and several thousands Of dol
lars to several Indiana realty COM
panies known as the Aron. Freelich.
Milnag, Baran Broadway, Central
Gary. Fiftyler. Joseph Broadway,
Ma-Co, Mary Stewart, Resnick and
Ridge Adams, despite the fact that
when much of this money was paid
out some of these companies were
in receivership.
The Blue Bay Corporation re-
ceived s37.41I65, and on Aug. s
twelve pieces OF repoSsessed prop
erty owned by the bank, it is al
legged, were transferred to the
Meyer-K iser Corporation with value
of S61,4l4.76.
A further alleged transfer was
slle.35790 from the Meyer Kiser
bank Of Indianapolis to the bank
OF Florida for buying furniture fix
lures and exploitation Of a new
bank Of which Mr.. Meyer was in