WALL STREET: Latest Laugh for Eaton

When Cleveland's sly old Cyrus Eaton pulled out of his firm's contract to underwrite Henry Kaiser's new $10 million stock issue for Kaiser-Frazer Corp. in 1948, he tried to find a legal loophole to justify his action.

Eaton, who backed out because the market broke as he floated the issue, failed and a federal court last year awarded Kaiser-Frazer a $3,120,743 judgment against Eaton's underwriting house, Otis & Co. Eaton shut down his business to elude Kaiser's collectors.

But last week, Eaton had the latest laugh. Manhattan's U.S. court of appeals ruled that Eaton's contract was, indeed, invalid. In its prospectus for...

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