The Grocery Receivership That Looked Like a Setup

The appointment of P. S. Runkel as receiver of the Haley Grocery Company at the suit of Schwabacher Bros. Co. proves to have been the outcome of a contract between that firm and the Boston National Bank for control of the assets. In the effort to make a strong case for the appointment of a receiver, the Schwabachers cast reflections on the officers of the Haley Grocery Company which, from the latter's statements, appear to be unfounded. Though the allegations were based on the company's books, the officers say unwarranted inferences were drawn from them.

As an example, they point out that the receiver, who had never been in the store, estimated the value of the stock at $5,000, while the sheriff's inventory placed it at $12,000. When the charges became known to the officers of the company, they strongly denied any intention to defraud their creditors or any collusion with the Boston National Bank — unless it be collusion to submit to suit upon a just debt without interposing sham defenses. The officers issued a statement explaining the charges and contending that the affairs of the company were in better shape at the time of failure than when the present management took charge, and that the business was run until the very end in an honest, fair and businesslike manner.

The statement details the transfer of stock and assumption of debts among H. K. Ward, J. R. Hill, F. G. Pohndorff, J. T. Braddock and J. J. Busby. It denies that Ward drew $1,500 in February for personal use, that the stockholders depleted the stock in anticipation of a receiver, or that the company stopped paying its bills. The officers say the company was still buying and selling staple goods up to the time the sheriff took possession, and that the stock on hand was as large as usual.