Incorporated in 1888 by a group of prominent Eau Claire businessmen, including John S. Owen and Ralph E. Rust (Owen-Rust Lumber Company), the company had sold some 200,000 dollars in stock by 1893 and employed some 200 workers. Its alternating dynamos, generators, transformers, and related products were marketed across the country until the financial panic of 1893 made many of its credit accounts uncollectable. In May and September, 1893, two company directors, James T. Barber and H.H. Hayden, brought suit against National Electric, securing court appointment of Ralph Rust as receiver to oversee liquidation of the assets to the benefit of the creditors. Rust, arguing that immediate liquidation would harm all concerned, continued operation of the business. In January, 1898, T.A. Harrigan and other National Electric creditors successfully petitioned the court for removal of Rust as receiver, for the removal of Hayden and Barber as plaintiffs in the case, and for the designation of Harrigan et al. as plaintiffs. The plaintiffs charged National Electric, Rust, and many of the directors and stockholders named as co-defendants with conspiracy to defraud the corporation's legitimate creditors. In a decision dated March 26, 1900, Judge A.J. Vinje of Superior, Wisconsin, found for the plaintiffs. He was partially overruled by a Supreme Court of Wisconsin decision dated June 29, 1904.