Case Name: Samuel Klein, complainant, v. Universal Finance Corporation, defendant
Court: New Jersey Court of Chancery
Jurisdiction: New Jersey
Decision Date: 1929-02-19
Citations: 104 N.J. Eq. 236
Docket Number: 
Parties: Samuel Klein, complainant, v. Universal Finance Corporation, defendant.
Judges: 
Reporter: New Jersey Equity Reports
Volume: 104
Pages: 236–238

Head Matter:
Samuel Klein, complainant, v. Universal Finance Corporation, defendant.
[Decided February 19th, 1929.]
Mr. Herbert L. Mins, for the complainant.
Mr. George T. Viclcers and Mr. George 8. Hobart, for the • defendant.
Mr. Merritt Lane, receiver pro se.
Mr. Samuel Lreslcin, for the subscribers.
Mr. Richard Rlumer, for the attorney-general.
Mr. Simon L. Fisch, for the prosecutor of the pleas of Essex county.

Opinion:
Church, V. C.
This matter has been before me for several -weeks. A bill by the attorney-general was filed and also one by a stockholder. The allegations were that the company had and was proceeding improperly. I appointed Merritt Lane receiver under the stockholder's bill, and dismissed the attorney-general's bill, and asked the receiver for his report. This I have received. In it he says that in the inception of the matter certain proceedings relative to radio advertisements were deceptive, but these activities have now ceased. And he also says in his report that the company is now functioning honestly and in accordance with the law.
Questionnaires were sent out. At the last hearing no one objected to the continuance of the activities of the company. The only objection was as to whether the preferred stockholder's committee should not have more control over the-company's affairs. As I said at the last hearing, I do not feel that I should go as far as giving this committee any more power than the stockholders have given it, for, in effect, that would be an effort on the part of this court to reorganize the company.
I shall therefore direct that the bill of complaint be dismissed and the receiver discharged, that the books now in the hands of the prosecutor shall be returned to the company and it shall be allowed to continue its functions.
A request was made by the attorney-general that the bill against the Financial Investment Corporation should be revived. This motion I will deny, because at the hearing it transpired that the Investment company was in a measure guaranteeing the preferred stockholders of the Universal company and, if I appointed a receiver for the Investment company, it would, as I see it, affect the Universal company. I shall request the preferred stockholders' committee, hitherto appointed to keep a careful watch on the affairs of the Universal Finance and if, in its opinion, this company is proceeding in any way contrary to law, that it will report promptly to me in the matter that I may take such action as may be necessary in the premises.
In view of the statements made by the attorney-general, representing the department of banking and insurance, I do not think it necessary to take any action in regard to the suggestion as to the revocation of the charter, because, as I understand it, the commissioner has decided to take no action in this matter.
I deem this memorandum sufficient to .explain my attitude, but, should any appeal be .taken, I will write a more elaborate opinion.
When a decree is prepared in accordance with these conclusions, I will, on proper notice, fix the fees of receiver and of counsel.