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DEFUNCT BANK OWNERS EVADING STOCK LIABILITY Reveal Laxity of State Law Enforcement. Only 1½ per cent of the stockhold. ers' liability has been collected for creditors of the 140 closed state banks in Cook county while almost 20 per cent of such liability has been collected for creditors of the 19 Cook county national banks in liquidation. This was revealed yesterday from study of receivers' reports and records of the state office. The total liability of the stcckholders in the 140 state banks-100 per cent over the amount of stock 40 million dollars. Collections to date have totaled little more than $600,000 In the case of the 19 banks the liability is and total of has been collected from this source for the creditors. Difference in Laws. This disparity is ascribed by lawyers receiverships and foreclosures to the different methods of against the stockholders, as provided and state bank ing laws. and to laxity in the enforcement of existing state legislation. When national bank is closed receiver is appointed by the controller of the currency at Washington and the receiver immediately adds 100 per cent stock to the assets the bank. He then sends out claims to the stockholders, and if they do not comply within reasonable time goes into federal state court of equity and obtains judgments against The Illinois banking act imposes no upon the receiver, nominated by the state auditor, to collect from the The law vides any creditor may suit in court equity and that the may appoint a receiver handle the double liability collections. This leads to the filing of "dummy suits in the interest of the stockholders themselves tiements can be made. according to the for the bar Makes Delay Possible. It also makes possible, they declare long delays that permit the dissipation concealment of assets the collection of excessive fees by and their lawyers. settlement is effected suits filed against the stock holders are referred to masters chancery for hearings and the fees come out of collections. This is in addition to fees for the receiver under the liability usually 10 per cent of all fees for the receiver's from 10 to 25 and fees for the creditors' attorneys in the same amount. The also makes possible multiplicity of suits. In the case of the Kaspar American State bank different creditors' suits were filed and three receivers appointed by the three judges before the creditors agreed upon receiver. Settle for 40 Per Cent. The for bank creditors the double liability law includes $530,000 from settlements made by stockholders of three banks. to the state auditor's office. These South Side Sav. ings bank. the Sheridan Trust and Savings and the Northwestern Trust and Savings bank. Receivers and their attorneys took $132,000 in fees out of total settlement of $662,000. which was 40 per cent of the liability. The state auditors' reports on the of banks do not show what are made on stock ments, such collections, if being combined with others under the head ing Receipts from collections, etc., to be disbursed." The reports of the supervising receiver of the national banks, however, separate entries entitled Collections from stock assessments."
