Education

Lawsuits challenge Bohrnstedt’s businesses

In 1913, Bohrnstedt was accused of dishonest land dealings and his focus moved on to his new Waldo Hills Orchard project, effectively marking the end of the “boom” in Creswell. The orchard industry in the form of large, privately-owned orchards belonging to those like Dr. L.D. Scarbrough and the Creswell Orchard Company continued, but the small 5-, 10- and 20-acre properties were evidently no longer profitable or big enough to keep the investors interested in them. More and more delinquent notices began appearing in the newspapers, and the once flourishing economy and growth during the “Bohrnstedt Boom” began declining steadily through the next seven years. By 1920, Creswell was home to only 270 people. However, it then began a slow recovery from the economic down-turn and slowly but steadily grew, reaching 662 people by 1950. By early 1913, delinquent tax notices for various lots of land against the company began to appear more frequently in the local newspapers. “Notice is hereby given that the taxes are delinquent and unpaid on the following described parcels of real property on the 1911 tax roll of Lane County, Oregon and there is now due the amounts set opposite of each description to which should be added a 10% penalty and interest at 12% per annum from the first Monday in April 1912, together with the cost of advertising at the rate of 40 cents per line.” Those listed against the A.C. Bohrnstedt Orchard Company didn’t amount to much. In February, three of them were listed – one for $1.07, another for $2.01, and the third for $6.70 – assumed to be parcels that had defaulted to the company. So, what about this lawsuit against the A.C. Bohrnstedt Orchard Company? In April 1913, the Salem Capital Journal published articles about the lawsuit that brought an end to the “Bohrnstedt Boom” in Creswell. “Alleging fraud in the transaction of the A.C. Bohrnstedt Orchard company and other organizations in which A.C. Bohrnstedt is said to be the controlling factor, Herman Haid, as trustee for the orchard company, today fi led a suit to secure an accounting from Bohrnstedt, C.H. Sedgwick and A.H. Pohl for over $100,000 of the company’s funds. The orchard property is in Lane County. “The complaint alleges that in 1909 Bohrnstedt secured contracts or options to purchase approximately 1,438 acres of land in Lane county for $90,663.50, and at the time, these holdings were transferred to the A.C. Bohrnstedt Orchard Company, only $12,900 had been paid on the contracts. It is alleged that the orchard company was organized by Bohrnstedt with “the fraudulent purpose and intent of transferring the aforementioned contracts to it to the end that he would thus procure without consideration for himself and the A.C. Bohrnstedt Company a large amount of the capital stock and promissory notes of the corporation so organized.” “Allegation is made that when the transfer took place, the contracts were not worth more than the amount due on them, but that Bohrnstedt and his associates in the Bohrnstedt Orchard company purposely and fraudulently placed an overvaluation upon said contracts and properties to the amount of upwards of $100,000.” The next day, the Oregon Daily Journal, in Portland published a rebuttal article released by A.C. Bohrnstedt: “Declaring he welcomes the suit brought by Herbert Haid, trustee of the A.C. Bohrnstedt Orchard company to compel him and his associates to account for approximately $100,000 funds of the orchard concern, A.C. Bohrnstedt, controlling head of the company and organizer of half a dozen other land and farming companies, today denied allegations of “frenzied fi nance” fraud and conspiracy made by Haid. Replied Bohrnstedt: “You may say for me that every dollar of the money for which Mr. Haid is suing for an accounting, can be accounted for and will be at the proper time,” said Bohrnstedt. “I welcome the suit because it will clear up the atmosphere considerably.” Apparently, not only was A.C. and his original company listed as defendants, but also listed was his Waldo Hills Orchard Company. Another account of the lawsuit appeared on page 2 of the Eugene Guard on April 14, 1913: “…The monies, Haid alleges in the complaint, was procured by transferring properties and equity in Lane County lands held by the A.C. Bohrnstedt company to the A.C. Bohrnstedt Orchard company at a fi gure which represented approximately $100,000 … Both concerns, it is alleged, were controlled by Bohrnstedt at the time. … The suit filed against Bohrnstedt and his subsidiary companies is the result of about a year’s investigation and effort to straighten out the tangle in which the A.C. Bohrnstedt Orchards company was found to be,’ said Haid. ‘It seems that Bohrnstedt has had a special mania for the organizing of incorporations, evidently for the purpose of confusing people, and thereby reap large benefits for himself.”