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BORDONI v. NEW YORK TIMES CO.

July 15, 1975

Carlo BORDONI, Plaintiff,
v.
NEW YORK TIMES COMPANY, INC., et al., Defendants


Edward Weinfeld, District Judge.


The opinion of the court was delivered by: WEINFELD

EDWARD WEINFELD, District Judge.

This is one of four actions commenced by Carlo Bordoni against various publications charging that he was falsely libelled by news articles concerning the affairs of the Franklin National Bank ("Bank"), which, among other matters, described the circumstances of plaintiff's resignation as a director of Franklin New York Corporation ("Franklin"), the Bank's parent. The defendants in this case are the New York Times, A. M. Rosenthal, its managing editor, and John H. Allan, the reporter who wrote the alleged libelous article.

 Plaintiff's complaint alleges he is an acknowledged international monetary, banking and financial expert. It sets forth four separate claims, none of which pleads special damages; rather, plaintiff relies upon allegations that the article in question is libelous per se and is actionable even without an allegation of special damages. The defendants move to dismiss the complaint on the grounds that (1) no statement defamatory of plaintiff is contained in the article, and (2) even if such a statement is found therein, under New York's "single-instance" rule the complaint is deficient because of its failure to plead special damages. *fn1" Thus the essential question is whether the article is libelous per se.

 As a general rule, a writing or printed article is libelous per se -- that is, actionable without allegation or proof of special damages -- "'if it tends to expose a person to hatred, contempt or aversion, or to induce an evil or unsavory opinion of him in the minds of a substantial number of the community, even though it may impute no moral turpitude to him' . . . [or] tends to disparage a person in the way of his office, profession or trade." *fn2" So, too, a writing that charges the commission of a crime is libelous per se. *fn3"

 The alleged offending article, which was published in the New York Times on June 24, 1974, reads as follows:

 
"A director closely associated with Michele Sindona, the Italian financier who is the biggest shareholder in the Franklin New York Corporation -- the parent of the Franklin National Bank -- is resigning from the board of the holding company.
 
"The man leaving the board is Carlo Bordoni, a Milan banker and director of Fasco International Holding, S.A., who played an important role in pushing Franklin into foreign-exchange trading in a major way. Fasco is a Luxembourg investment company owned by Mr. Sindona.
 
"It was in foreign-exchange trading that Franklin lost $45.8 million during the first five months of 1974, Franklin disclosed last Thursday in a long-awaited restatement of its earnings. The foreign-exchange loss was part of a $63.6 million over-all loss reported by Franklin for the five months.
 
" Changes in Management
 
"With Mr. Bordoni's resignation, Franklin's management in foreign-exchange trading has changed almost entirely.
 
"At the time Franklin's foreign-exchange losses were announced, Peter R. Shaddick, executive vice chairman and head of the bank's international operations, resigned. Andrew N. Garofalo, vice president and manager of the bank's foreign-exchange trading desk, resigned a short time later.
 
"Donald Emrich, a foreign-exchange trader with the rank of assistant cashier, was dismissed by the bank when the foreign-exchange losses were first disclosed.
 
"Then Franklin hired Edwin A. Reichers, a former senior vice president of the First National City Bank, as an executive vice president to reorganize its international currency trading operation.
 
"Whether the Bordoni resignation was merely a part of this foreign-exchange housecleaning or part of a downgrading of Mr. Sindona's influence at Franklin could not be determined. Mr. Sindona was not present at a Franklin board meeting last Thursday, but his absence was not unusual.
 
"Mr. Sindona has agreed to add as much as $50-million in new capital to the Franklin New York Corporation as part of a plan announced May 12. The plan was originally designed to ...

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