In a nutshell, the lawsuit contends that the trustees appointed to Etna Iron Works (Lee and Clark) made a “collusive arrangement” with Henry Marting’s buddy Mr. Hart, to sell Big Etna to Marting at a reduced price. Marting had directed the furnace manager, Mr Hart, to strip nearly all equipment from Etna’s property so the appraisal would be low. Etna Iron claimed the property was worth half a million dollars, but Marting bought it for $90,000. After the sale he added equipment back and fired up the furnaces, making a lot of money. Five years later Etna Iron sued him for all of this, but they lost. 10 years after this lawsuit Henry Marting consolidated Big Etna, Lawrence and the Ironton Furnace, and re-organized Marting Iron & Steel with a capital stock of $2 million. Henry Marting died in 1918.
“4. It is said that there was some collusive arrangement between Clark and Lee as trustees and one Hart an officer of the Ironton Coal & Iron Company in regard to the bidding at the sale. Mclnnes and Clark trustees holding the bonds secured by the mortgage so to be enforced had directed Lee and Clark to bid at the sale for them as holders of the bonds so secured and had authorized them to bid their full debt and interest and taxes costs etc but to buy at a less price if able and to act upon their own discretion. Under this authority Clark and Lee determined to bid up as high as $80,000, and there was probably some understanding between Clark and Hart that they would run it up to that figure. But this was intended to enhance the price and not to suppress bidding and how the complainant was injured or affected by the by bidding of Hart which only enhanced the value and encouraged competition is not satisfactorily made out. It certainly falls short of that kind of mala fides which will affect a trustee’s sale. It is only some practice to prevent bidding or procure a sale for less than the property would have otherwise brought which can be relied on by them to avoid the sale.”
“The Ironton Company reacquired this property by deed from the trustees dated October 12 1897 and resold it to Henry Marting for $90,000 by deed dated October 19 1898. This last sale was the result of much negotiating and was the best price which they could obtain with all the value added by reason of the expenditures made by complainants in repairs. The evidence plainly indicates that the property had always been a money losing enterprise until the extraordinary advance in the price of iron which set in soon after this sale to Marting…..That sale occurred September 25 1897….This bill was not filed until July 8 1902.”