15826. Fidelity Funding Company (New York, NY)

Bank Information

Episode Type
Suspension → Closure
Bank Type
private
Start Date
December 1, 1908*
Location
New York, New York (40.714, -74.006)

Metadata

Model
gpt-5-mini
Short Digest
c1f722fc

Response Measures

None

Description

Newspaper articles describe the Fidelity Funding Company going into suspension and being placed in the hands of receivers (state receiver Thomas F. Gilroy and rival federal receiver Robert C. Morris). The troubles stem from missing president P. J. Kieran, large deficits and alleged fraud; no contemporaneous bank run is described. Referee Olney later found the company not amenable to involuntary bankruptcy and the company remained under receivership, consistent with a suspension that led to permanent closure/receivership.

Events (2)
1. December 1, 1908* Suspension
Cause
Bank Specific Adverse Info
Cause Details
Company suspended after discovery of large discrepancies between liabilities and assets, disappearance of president P. J. Keiran, alleged fraud and missing books/records; liabilities far exceeded assets according to receiver's findings.
Newspaper Excerpt
Thomas F. Gilroy, jr., receiver for the Fidelity Funding Company, whose suspension has inconvenienced so many Roman Catholic convents, schools, colleges, churches and individual priests and nuns, said yesterday...
Source
newspapers
2. December 9, 1908 Receivership
Newspaper Excerpt
Thomas F. Gilroy, jr., receiver for the Fidelity Funding Company... Lieutenant Funston... received last night from Police Chief McQuade of Pittsburg a request that Keiran be arrested if found in this city, as is wanted there on a charge of grand larceny. Mr. Gilroy would also like to have Mr. Keiran return to this city and tell in court for the benefit of the company's creditors what he knows of the disposition made of the assets. Mr. Gilroy says he can prove that certain books of the company were removed from the offices just at the time of the receivership.... (New-York Tribune, 1908-12-09).
Source
newspapers

Newspaper Articles (11)
1. December 9, 1908 New-York Tribune New York, NY
Article from New-York Tribune, December 9, 1908

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WANTS TO SEE KEIRAN RECEIVER SEEKING HIM. Company's Liabilities $1,500,000 More than Assets, He Says. Thomas F. Gilroy, jr., receiver for the Fidelity Funding Company, whose suspension has inconvenienced so many Roman Catholic convents, schools, colleges, churches and individual priests and nuns, said yesterday that he would like to find some trace of the $400,000 surplus which P. J. Keiran, the company's former head, says exists. "From my present figures." said Mr. Gilroy. "the liabilities of the company are something like $1.500.000 more than the assets. Lieutenant Funston, in charge of the detective bureau at Police Headquarters, received last night from Police Chief McQuade of Pittsburg a request he that Keiran be arrested if found in this city, as is wanted there on a charge of grand larceny. Mr. Gilroy would also like to have Mr. Keiran return to this city and tell in court for the benefit of the company's creditors what he knows of the disposition made of the assets. Mr. Gilroy says he can prove that certain bocks of the company were removed from the offices just at the time of the receivership. although Mr. Keiran maintains that he never kept any books William Nelson Cromwell. it now develops, has been asked by certain prominent Catholic clergymen to take a hand in the company's affairs and try to rehabilitate and reorganize the business At the offices of Sullivan & Cromwell it was said yesterday that Mr. Cromwell had the matter under consideration, but had come to no decision as yet Mr. Keiran, it is reported. has been visiting the creditors of the company ever since the suspension and asking them to sign a sweeping power of attorney in favor of Mr. Cromweil. These powers of attorney give the right. it is understood not only to rehabilitate the finances of the Fidelity Funding Company but also to take over the affairs of the Federal Construction Company and the Columbia Construction Company, two subsidiary concerns in which Keiran was largely interested. Keiran's personal affairs are also to be overhauled and straightened out. It is understood that several of the creditors have signed the powers of attorney. Mr. Gilroy intimated yesterday that there would be some interesting disclosures when he filed his suits against several local banks and trust companies charging them with accepting large bonuses for making loans to the Fidelity Funding Company In one case the receiver said that the company had paid a bonus of $50,000 to obtain a loan of $135,000. He would not make public the names of the banking institutions which he intends to sue non would he say whether there were any national the list. He is confident he will be able to banks recover in close to $500,000 which has been paid out in bonuses The receiver is also anxious to discover the whereabouts of Mrs. Lorena W. Davis. who was private secretary to Keiran. Mrs. Davis, accordinz to Mr. Gilroy, had an active account with one of the banks with which Keiran did a large part of his business Mr. Gilroy has a court order for the examination of Mrs. Davis, but she has not been seen since the company suspended H. H. Van Dusen assistant secretary of the Fidelity Funding Company, and Keiran's right C. L hand man. has also disappeared, as has Boyce another of Keiran's confidential men When asked whether he believed Keiran had profited personally by his operations, Mr. Gilroy said: 'There is a discrepancy of about $1,500,000 as shown on the books of the company which remained in the offices I believe that Keiran was no fool. but further I do not care to discuss that matter. "In insuring the lives of those with whom he did business Keiran secured commissions from the insurance companies. and these commissions and the commissions which he expected to collect for twenty years he put down as an asset. "Keiran did not confine himself to Catholic institutions alone There appears on the books of the company the information that the Fidelity Funding Company did business with the Loraine Street and Dennison Land Company of Cleveland This company is among the creditors. Keiran also operated through an account which was opened in one of the local banks in the name of W. B. Arundel, who was employed by him in a clerical capacity, This account was opened about the same time that the one in the name of Mrs Davis, his stenographer. was opened. Arundel was seen here some weeks ago. but since that time we have been unable to locate him. Philadelphia Dec 8 3-Former Secretary Leslie M. Shaw. who is president of the First Mortgage Guarantee and Trust Company of this city. admitted to-day that the Fidelity Funding Company of New York owes him $60,000 Said Mr. Shaw My loans are fully covered by bonds which are AS safe as the bonds of any government on earth, and margined with additional notes at nearly 100 per cent T think the same is true with most and very likely all the banks and insurance companies An effort was made a year ago to increase the capital of the company to something over two million and some subscriptions were made (I was one of the subscribers). on condition that the full Amount should be raised This ought to have beer done, as the proposition was all ,right, if properly handled

2. December 11, 1908 The Guthrie Daily Leader Guthrie, OK
Article from The Guthrie Daily Leader, December 11, 1908

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KIERAN FAKED ROMAN PRIESTHOOD Kleran didn't operate extensively In New York, Dec. 11.-Having taken this city. Leslie M. Shaw, former sec80 careful a financier as Ex-Secretary retary of the treasury, and the one Treaswrer ges Ue M. Shaw through the time head of the Carnegie Trust com sake loan process to the tune of $50,pany, wishes Kieran had done even 600, robbed priests and nuns out of less here for then Mr. Shaw would almost @ million dollars, and succeednot be worrying about $60,000 that he 4d in hiding himself away, Patrick let Kieran have, and which he is now 3 seph Kieran seems to have out-faked making every effort to recover. the Kingdom of Fakedom. Prominent Many Books Are Missing. in Roman Catholic church circles, and The present whereabouts of Kieran possessed of a personality not excelled are not only now unknown, but he has for its gracious, suave manner in the taken many of his books with him, so entire city, he worked his graft on that It is impossible for the receiver to Fich and pour alike. and yet used a make head or tail out of the many system older than the government transactions with which be has to deal where he operated. before the tangle can be unwound. "Prisethood" All Are Anxious. Counsel for the Mutial Bank of Chi Stockholders and creditors of the cago and the Euc Id Avenue Banking Fidelity Funding company, who numand Trust company of Cleveland would ber several hundred, and are composgive a great deal for a glimpse at the ed principally of priests and nans, are same b oks. The Euclid avenue instianalous to learn the whereabouts of tution, which is the day and night P. J. Kieran, who has been prominent bank of Cleveland, is now in the hands in Roman Catholle church circles and of a receiver as a result. It is alleged, was president of the Fidelity Funding of the connection of Kieran with it, company, at 42 Broadway, until that and the Mutual bank is suing the company went Into the hands of a reCloveland bank to make good on some Jelver under extraordinary circumof the notes that were Issued when the stances. capital of the Enclid avenue bank was The mas F. Gilroy, Jr., who was ap increased from $200,000 to $500,000 at pointed receiver, is also extremely anxthe suggestion of Kieran. tous to meet Mr. Kieratt, in order to Kieran is described as not only get an explanation of how it happens suave and of engaging manner, but that the liabilities of the company are some of his clients say he is a good between $4,000,000 and $5,000,000 while an the assets he can find amount to deal of a hypnotist as well. The recelver has discovered sufficient In the but little more than $2,000. be and papers that were left in the All over the ecuntry there are priects offices of the Fidellty company to inand nuns who want to know IT they vill ever realise on notes and bonds dicate that Kieran obtained notes The dollars. of signed by the mother superior and millions epresed. treasurer of St. Mary's academy at reads of convents and parishes are Nauvoo, III., aggregating $1,400,000 on spending anxious hours, wondering what will be the utcome of their hav- two mortgages talling $230,000. The log placed mortgages and notes with property is worth about $250,000. "I have already found two notes," Kleran. From Pennsylvania, Washington, said Receiver Gilroy today, "that were Sowa, Missouri, Texas, Illinois, Ohio, given by the nuns of St. Mary's academy. One is for $200,000; the the upper part of New York State, and Canada comes & loud cry from priests other for $285,000. I believe the total be than more will notes the unt of and others in the churches to know $1,000,000." Now badly they are stuck.

3. December 30, 1908 New-York Tribune New York, NY
Article from New-York Tribune, December 30, 1908

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KEIRAN HEARING PROVES FRUITLESS. No New Facts Brought Out in Fidelity Company's Hearing. C. C. Dickinson, president of the Carnegie Trust Company. was examined yesterday by Peter B. Olney, referee In the Fidelity Funding Company bankruptcy proceedings. An attempt was made to learn the exact nature of the business which the bankrupt company transacted. Mr. Dickinson told of the business deals which P. J. Keiran, the missing president of the company, had with the Carnegie Trust Company. Mr. Olney wanted to determine whether the bankrupt concern bought and sold notes, or merely discounted paper. Nothing new in regard to Keiran's transactions was brought out. The hearing was adjourned until January 10. Thomas F. Gilroy, jr., the state receiver, whose jurisdiction is opposed by Robert C. Morris, the appointee of the federal court, was present. He was represented by counsel. Mr. Gilroy said that he had received no word from Keiran, and had no inkling of the missing president's whereabouts. Pending the decision as to which receiver is to remain in charge of the company's assets Mr. Gilroy can do nothing toward straightening out the company's tangled affaire.

4. February 10, 1909 New-York Tribune New York, NY
Article from New-York Tribune, February 10, 1909

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FEDERAL RECEIVER OUT FIDELITY CO. DECISION. Referee Holds Keiran Concern Not Amenable to Bankruptcy Act. Peter B. Olney, referee in bankruptcy, submitted to the judges of the District Court yesterday his opinion in the proceedings against the Fidelity Funding Company, of which Patrick J. Keiran was formerly president. He held that inasmuch as the company was not a trading or mercantile corporation it was not amenable to the bankruptcy act. His report said: Whether we consider the Fidelity Funding Company as principally engaged in lending money to various Catholic churches and institutions upon their notes, secured by mortgages, or principally engaged in buying and selling promissory notes and its own bonds, secured by mortgages on real estate, it is not amenable to the bankruptcy act and cannot be adjudicated a bankrupt in involuntary proceedings. I therefore report that in my opinion the petition of the petitioning creditors most be dismissed, with costs. Bearing on Keiran's transactions he said: The loans of the company during the year 1906 appear to have amounted to about a million dollars As the company had but a small capital to transact this large amount of business, it was obliged to obtain money by discounting or selling the notes of the borrowers And when it had issued mort- sold page bonds upon the security of mortgages, it to or hypothecated said bonds, using the proceeds carry on its business In a supplementary statement Referee Olney said that the question involved the custody and administration of assets of the estimated value of several million dollars When Frank L. Crocker, of No. 5 Nassau street, counsel for the federal receiver. Mr. Morris, was informed of Referee Olney's decision he said that he would appeal at once to the District Court, and in the event of an unfavorable decision would take the case to the Court of Appeals. Mr. Gilroy said that henceforth he would be the sole receiver, and would remain so until Referee Olney's opinion was reversed. Mr. Keiran said the decision was in accord with his own opinion. and that although he would rather have a federal receiver than a state receiver the decision was entirely agreeable to him. The hearing in personal proceedings against Keiran will continue to-day before Commissioner Alexander, in the Federal Building. Keiran is expected to appear under former subprenas; D. H. Sill. who succeeded him as president, and D. H. McBride a director, have been requested to appear. and subpoenas will be served this morning on several bank officials and directors who hold the company's paper. Mr. Keiran said yesterday: "The Fidelity Funding Company debts will be paid in full and the churches and other institutions will not be required to pay anything more than the money that was advanced to them plus the interest to date. The churches do not want any compromise on their legal liabilities; they are willing to pay every dollar that was advanced to them by the Fidelity Funding Company, and whether their obligations were legally or illegally issued is not material with them. During the summer a committee was organized consisting of Morgan J. O'Brien, J. S. Alexander, vice-president of the National Bank of Commerce, and George W. Young, of George W. Young & Co., of No. 59 Cedar street, for the purpose, as I understood it, of looking into the affairs of the Fidelity Funding Company with reference to lending such financial assistance as was required. "It was decided that I should resign the presidency, and D. H. Sill took the office. A part of the capital stock was trusteed to the Windsor Trust Company, with the understanding that the coma mittee would have control of the company for period of three years, and a majority of the stockholders signed the agreement. I was to remain a director. The active management of the company from that date fell to Mr. Bill, who required that a sufficient number of the directors should resign so that he could appoint new ones from his office force and have them on hand when needed. It was stated to the directors that by doing this the company would get such financial assistance as it required. 'Although I was in the office every day, I was not called in to any of the meetings nor was I present when it was voted to apply for a receivership for the company. Nor did I know anything about such a resolution being passed until I heard of the receivership being applied for. I volunteered to assume all the thirty-day obligations of the company, and offered to put up credit from $250,000 to $2,500,000 in an effort to stay the receivership, but it was refused."

5. February 10, 1909 Evening Star Washington, DC
Article from Evening Star, February 10, 1909

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FIDELITY ASSETS. Special Master Olney Reports It Worth Millions. NEW YORK, February 10.-Special Master Peter B. Olney, in a report filed in the United States district court yesterday afternoon finds that the Fidelity Funding Company, of which Patrick J. Kieran was the head, is not amenable to the bankruptcy act and cannot be adjudicated a bankrupt in involuntary proceedings. The report, which is expected to be confirmed by Judge Holt, will put an end to the rival claims for jurisdiction made by Thomas F. Gilroy, the receiver appointed by the state supreme court, and Robert C. Morris, the receiver appointed by the United tates district court. At the time of the filing of the involuntary petition against the Fidelity Funding Company the liabilities of the corporation were stated to be $3,941,037 and the nominal assets $3,579,315. Supplementing his finding, Mr. Olney makes the plea that a higher rate of compensation should be paid the special master because of the arduous labor involved. There were seven long hearings, he said, and 350 pages of testimony taken, and besides, he adds, "the matter involves the custody and administration of assets of the estimated value of several million dollars." The involuntary petition in bankruptcy filed against Kieran as an individual is not affected by the decision. Kieran's examination will be continued today before United States Commissioner Thomas Alexander.

6. February 10, 1909 Norwich Bulletin Norwich, CT
Article from Norwich Bulletin, February 10, 1909

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PATRICK J. KIERAN'S CASE. Fidelity Funding Company Not Amenable to Bankruptcy Act. New York, Feb. 9.-Special Master Peter B. Olney in a report filed in the United States district court late today finds that the Fidelity Funding company, of which Patrick J. Kieran was the head, is not amenable to the bankruptcy act, and cannot be adjudicated a bankrupt in involuntary proceedings. The report, which is expected to be confirmed by Judge Holt, will put an end to the expected rival claims for jurisdiction made by Thomas F. Gilroy, the receiver appointed by the state supreme court, and Robert C. Morris, the receiver appointed by the United States district court. At the time of the filing of the involuntary petition against the Fidelity Funding company the liabilities of the corporation were stated to be $3,941,037.04. and the nominal assets $3,579,315.01.

7. February 11, 1909 Iowa County Democrat Mineral Point, WI
Article from Iowa County Democrat, February 11, 1909

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KIERAN CASE DETERMINED. Company, of Which He Was Head, Subject of Special Report. New York, Feb. 10.-Special Master Peter B. Olney, in a report filed in the United States district court yesterday, finds that the Fidelity Funding company, of which Patrick H. Kieran was the head, is not amenable to the bankruptcy act, and cannot be ad. judicated bankrupt in an involuntary proceeding. The report, which is expected to be confirmed by Judge Holt, will put an end to the rival claims for juri diction made by Thomas F. Gilroy, the receiver appointed by the state court, and Robert C. Morris, the receiver appointed by the United States district court. At the time of the filing of the involuntary petition against the Fidelity Funding company. the liabilities of the corporation were stated to be $3,941,037 and the nominal assets $3,579,315.

8. February 24, 1909 New-York Tribune New York, NY
Article from New-York Tribune, February 24, 1909

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THE FIDELITY FUNDING CASE. State Receiver Wants Court to Make Referee's Opinion Binding. Gilbert H. Montague, of Rollins & Rollins, counsel for State Receiver Gilroy in the bankruptcy proceedings against the Fidelity Funding Company, of which Patrick J. Keiran was president, made a motion yesterday before Judge Holt, in the District Court, that the opinion of Referee Olney, that the company was not amenable to the bankruptcy laws, be permanent and binding. The rival federal receiver, Robert C. Morris, his attorney, Frank I. Crocker: Mr. Keiran, and his counsel, Moses Shire, were none of them present to oppose the motion. Not even Mr. Gilroy, the state receiver, knew about the hearing. But despite the fact that Mr. Montague had no opposition Judge Holt reserved his decision. There will be two hearings in this case to-dayone in personal proceedings before Commissioner Alexander, at 11 a m., at which Leroy W. Baldwin, president of the Empire Trust Company; George W. Young, of George W. Young & Co., and John Alvin Young, president of the Windsor Trust Company, are expected to testify, and one in proceedings against the company before State Receiver Gilroy at No. 42 Broadway.

9. March 21, 1909 Evening Star Washington, DC
Article from Evening Star, March 21, 1909

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ECHO OF FIDELITY FAILURE. Suit for $15,000 on Notes of Visitation Sisters Begun. PEORIA, III., March 20.-Sult for $15,000 on the notes of the Sisters of Visitation at Rock Island and held by the National Copper Bank of New York city began in the United States circuit court here today. The notes were originally given to the Fidelity Funding Company of New York. The suit is in connection with the alleged swindling of the Benedictine Sisters of Nauvoo, III., by P. J. Kieran, formerly president of the Fidelity Funding Company, now in the hands of a receiver. The Nauvoo Sisters gave notes to the amount of $350,000 to Kieran, who indorsed them to New York banks. When suit was commenced in the circuit court at Springfield, III., the sisters asserted that Kieran gained their confidence, and when they gave him blank notes he increased the intended amounts, they not knowing of the fraud until the notes were due. It is expected that the same allegations against Kieran will be made by the Rock Island Sisters.

10. April 3, 1909 Martinsburg Herald Martinsburg, WV
Article from Martinsburg Herald, April 3, 1909

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CLEVELAND PRIEST IS A BANKRUPT Father McMahon's Liabilities Will Reach Sum of $1,594,141. HIS ASSETS ARE SAID TO AGGREGATE $75,207 Editor of Catholic Universe Signed Many Notes For the Fidelity Fund ing Company, of New York, Which Is Now In the Hands of Receiver. Church Property Not Involved. Cleveland, O., April 1.-Rev. William McMahon, pastor of St. Bridget's Catholic church, and editor of the Catholic Universe, filed a voluntary petition in bankruptey in the United States court. In the petition his total liabilities are stated to be $1,594,141.64, with assets aggregating $75,207.08, of which $71,300 is real estate. The secured claims amount to $946,925.73; unsecured claims, $371,207.91, and commercial paper, $185,918. Father McMahon was a director of the Fidelity Funding company. of New York, founded by P. J. Kieran, and which now is in the hands of receivers. Thus it came about that his name was signed to many of the papers is. sued'by the company, and for which he now is held liable by the receivers. The petition enumerates many notes signed by Father McMahon. They are held mostly in New York, Pittsburg and Cleveland banks. Late in 1905 Father McMahon borrowed a small amount of money from Kieran, who is said to have offered him a lower rate of interest than that charged by other companies engaged in a similar line of business. The friendship between the priest and the financier grew to such an extent that the former signed or endorsed the notes which now are held against him, and at the time of the failure of the Fidelity Funding company was one of the board of directors. When the Kieran crash came in December last Father McMahon's dealings were supposed to extend only to the reorganization of the Euclid Avenue Trust company, of Cleveland, in which he signed notes for about $35,000. His assets were then said not to exceed $20,000. It was announced authoritatively from a priest closely identified with the affairs of the Cleveland diocese that the liability set forth in the petition in voluntary bankruptcy made by Father McMahon is personal and that the Catholic church property is not involved in a way that the church can lose. The title to all Catholic church property, it was explained, in all parts of the world, is vested in the archbishop or bishop of the diocese in which it is located, and mortgages must be sanctioned by the prelate in charge.

11. April 29, 1909 The French Broad Hustler Hendersonville, NC
Article from The French Broad Hustler, April 29, 1909

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PRIEST bankrupt. FATHER MeMAHON WAS INTER ESTED IN FIDELITY FUNDING COMPANY WHICH FAILED. Cleveland, Ohio, April :,-Rey. William McMahon, pastor of St. Bridget's Catholic church, of Cleveland, and ed. itor of the Catholic Universe, filed a voluntary petition in bankruptcy in the United States court. In the petition, his total liabilities are stated to be $1,594,141.64, with assets aggregating $75,207.08, of which $71,300 is real estate. The secured claims amount to $946,925.73; unsecured claim $371,209.91, and commercial paper $185,918. Father MeMahon was a director of the Fidelity Funding Company, of New York, founded by P. J. Kieran, and which is now in the hands of receivers. Thus it came about that his name was signed to many of the papers issued by the company, and for which he now is held liable by the receivers. The petition enumerates many notes signed by Father McMahon. Among the larger claims cited are the following: Carnegie Trust Company, New York $281,255.73; Guarantee Title and Trust Company, Pittsburg, $185,000; Society for Savings, Cleveland, $235,000; Third National Bank of Buffalo, $3,200.