Publication: The Trenton Evening Times
Trenton, NJ, United States
Unsecured Creditors Stave Off Chas.
Howell Cook's Bid Once Again.
NO DECISION YET REACHED
In the Court of Chancery Today Counsellor
Lowthrop Argues Against
The Sale to Mr. Cook - Edwin Robert
Walker Said to be a Good
Lawyer, but no Business Man.
Arguments for and against the affirmation of the bid of $62,000 made by Charles Howell Cook for the Eagle Pottery were heard by Vice-Chancellor Reed this morning in Chancery Chambers at the State House. The vice-chancellor finally took the matter under consideration for future decision and the sale was not affirmed.
Edwin Robert Walker, receiver for the pottery, was represented by his counsel, John Backes. The creditors, who are opposing the sale, were represented by Counsellor Francis C. Lowthorp.
The contention was based upon an order recently issued by Vice-Chancellor Reed that the property should be sold, clear of encumbrances. Mr. Lowthorp submitted a petition made by the Broad Street National Bank, stating that at a meeting of the creditors, of which the bank is the largest, a committee was appointed to look after their interests in the pottery. The committee consisted of O. Bowman, president of the bank; William B. Whitney, of Philadelphia; Edward D. Riely, of Lancaster, Pa., and Counsellor Lowthrop. It has looked over the situation and decided that the acceptance of Mr. Cook's bid would not be to their own interest and that it should be opposed.
The petition stated that Edwin Robert Walker is a man of excellent repute and good character, but that he was skilled only as a lawyer and not as a business man, and was therefore not a competent judge of the true value of the Eagle pottery property. It also charged that the property would not deteriorate in value if left idle for a few months, and finally asked that the order for the sale be declared void as it was without justification. The petition also asked that a rule be granted ordering the receiver to show cause why the bid of $62,000, made by Mr. Cook, should be granted, in order to allow the vice-chancellor a chance to investigate the claims of the petitioners that the order for the sale is without the jurisdiction of the court.
Mr. Lowthorp briefly explained the petition by stating that Vice-Chancellor Reed's order for the sale was improperly made, and cited a New York case which decided that when the court went outside of the jurisdiction and its attention was called to it, the court should vacate the order at once.
Vice-Chancellor Reed asked: "Did the mortgages of the pottery consent to the sale?"
"They did," exclaimed Messrs. Backes and Walker in one breath, and Mr. Lowthorp assented.
"So far as the jurisdiction of the court is concerned," replied Judge Reed, "the mortgages are the only ones who can obstruct."
"But the order affects the unsecured creditors, also," persisted Mr. Lowthorp. Vice-Chancellor Reed suggested that those creditors could begin collateral proceedings and Mr. Backes chimed in that they could carry the case to a higher court. Mr. Lowthorp continued his argument that the receiver represents all the creditors and not only a few, and again attacked the validity of the court's order of sale.
"Mr. Backes, on behalf of Receiver Walker, began, "the late Chief Justice Beasley said that there were no novelties in the law, but if he were here now," with a wave of the hand for emphasis "he would change his sentiments." Mr. Lowthorp smiled.
"The application is unprecedented," continued Mr. Backes, probably thinking of the heading of the article in last night's Times relating to Mercer Court. "It has no standing here, Mr. Burroughs, the mortgagee has consented to the sale, and the other creditors are simply delaying matters. If Mr. Burroughs' fingers are being burnt, it's none of the creditors' look out."
Mr. Backes then took up the matter of settling up the receivership for the best interests of all the creditors and argued that the longer the delay the more the cost. He also stated that the creditors wanted to hold the sale back until they could themselves buy in the plant at a low figure for themselves. Mr. Cook, himself entered the courtroom at this juncture and became an interested spectator, inasmuch as he is concerned to the extent of $62,000.
Mr. Lowthorp again took up the argument and stated that under the law all creditors were alike, according to their standing. The creditors had claims amounting to $50,000 and wanted some protections.
Vice-Chancellor Reed here interposed by stating that he had already said that he would vacate the order of sale if the creditors would only make some bid or offer for the property. "Is it your motion," he asked of Mr. Lowthorp, "that the property would bring more if sold at auction by a foreclosure suit than it."
"Yes," replied Mr. Lowthorp, "the creditors would gain time to arrange for bidding."
Mr. Walker here asked leave, which was granted, to state that the offer of $62,000 by Mr. Cook covers the face value of the mortgages and that there is $5,000 interest accumulated.
"And $5,000 tax also," put in Mr. Backes.
Mr. Lowthorp replied that he had already been offered the Burroughs' mortgage for $45,000. The vice-chancellor here closed the case by taking the written testimony and petition under advisement. Mr. Cook's bid is held over until a decision on to-day's contention is given.