Goldstein v. Groesbeck

Defendant Electric Bond & Share Company, hereinafter called EBS, is a New York corporation which is the top holding company of a large nationwide public utilities system. Among other things it owns the controlling interest in and dominates defendant American Power & Light Company, an intermediate holding company incorporated in Maine, which controls and dominates, in turn, the four defendant operating companies, Central Arizona Light & Power Company, an Arizona corporation, Florida Power & Light Company, a Florida corporation, Kansas Gas & Electric Company, a West Virginia corporation, and Minnesota Power Company, a Minnesota corporation. Plaintiff, a citizen of Massachusetts and minority shareholder of American, brings this action on behalf of Americans four operating companies to compel defendants, EBS, Ebasco Services, Inc., a New York corporation, and certain officers and directors of the latter companies, to account for profits received by Ebasco under service and construction contracts made with the operating companies in violation of § 4 (a) (2) of the Public Utility Holding Company Act of 1935, 15 U.S.C.A. § 79d (a) (2). This section made it unlawful, after December 1, 1935, for any "holding company" not registered under the Act "directly or indirectly * * * by use of the mails or any means or instrumentality of interstate commerce, to negotiate, enter into, or take any step in the performance of, any service, sales, or construction contract undertaking to perform services or construction work for, or sell goods to, any public-utility company or holding company."