Opinion
02-19-1929
KLEIN v. UNIVERSAL FINANCE CORPORATION.
Herbert L. Elins, of Newark, for complainant. George T. Vickers and George S. Hobart, both of Jersey City, for defendant. Merritt Lane, of Newark, pro se. Samuel Dreskin, of Newark, for subscribers. Richard Plumer, of Newark, for the Attorney General. Simon L. Fisch, of Newark, for prosecutor of pleas of Essex county.
Suits by Samuel Klein against the Universal Finance Corporation, and by the Attorney General against the Financial Investment Corporation, in which a receiver was appointed for the Universal Finance Corporation, and the Attorney General's bill was dismissed. On the receiver's report and the Attorney General's motion to revive his bill. Complainant Klein's bill dismissed, the receiver discharged, and motion denied.
Herbert L. Elins, of Newark, for complainant.
George T. Vickers and George S. Hobart, both of Jersey City, for defendant.
Merritt Lane, of Newark, pro se. Samuel Dreskin, of Newark, for subscribers.
Richard Plumer, of Newark, for the Attorney General.
Simon L. Fisch, of Newark, for prosecutor of pleas of Essex county.
CHURCH, Vice Chancellor. 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 commissionerhas 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.