Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

LEWIS v. ANSELMI

June 7, 1983

HARRY LEWIS, Plaintiff,
v.
DONALD R. ANSELMI, et al., Defendants.



The opinion of the court was delivered by: BRIEANT

MEMORANDUM AND ORDER

Brieant, J.

 In this motion, fully submitted for decision March 21, 1983, defendants Donald R. Anselmi, Leo P. Arnaboldi, Jr., Eugene P. Bernardi, Roland D. Burkhardt, Paul J. Chase, Stanley Gerwitz, Joseph A. Gimma, Gordon H. Johnson, Arthur F. McGinnis, Jr., Ronald D. Saypol, Richard R. Schilling, Jr. and Robert A. Stein (the "individual defendants") seek to dismiss the complaint filed by plaintiff Harry Lewis on behalf of the Lionel Corporation, of which plaintiff is a stockholder. The grounds urged in support of the motion to dismiss are:

 1. pursuant to Rule 12(c) and 23.1, F.R.Civ.P. for failure to make a prior demand upon the Board of Directors of Lionel or to plead with any particularity facts sufficient to excuse demand;

 2. pursuant to Rule 23.1, F.R.Civ.P., for lack of fair and adequate representation;

 3. pursuant to rules 9(b) and 12(b), F.R.Civ.P., for failure to plead fraud with particularity as required; and

 4. with respect to state law claims for lack of subject matter jurisdiction.

 Defendant Price Waterhouse (sued as Price Waterhouse & Co.) also moves pursuant to Rules 12(b) and 9(b) to dismiss the complaint against it for lack of subject matter jurisdiction and for failure to plead fraud with the necessary particularity.

 Plaintiff has moved for an order holding § 362 of the Bankruptcy Code inapplicable to this shareholder derivative action, and lifting the current stay of discovery with respect to Lionel.

 The defendant corporation, Lionel, is a New York corporation, engaged primarily in the management of two subsidiaries, Lionel Leisure, Inc., the owner of retail toy stores, and Dale Electronics, Inc., which manufactures and sells electronic components. Its stock is or was publicly traded. In February 1982 Lionel filed a petition under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. That proceeding remains pending.

 At relevant times, ten of the individual defendants were directors of Lionel, defendants Saypol and Shilling were President and Vice President, respectively, and also served as directors, and defendants Burkhardt and Stein were officers but not directors. Defendant Price Waterhouse conducted an audit of Lionel.

 Plaintiff's complaint contains six separately pleaded claims. Subject matter jurisdiction for the first four of plaintiff's six claims is said to be based upon § 27 of the Securities Exchange Act of 1934. Claims five and six are pendent state law claims. The first three claims arise from a decision in April 1981 by the Board of Directors of Lionel to seek shareholder approval for an amendment to an employee bonus program. The fourth claim relates to a Rule 10b-5 class action filed against Lionel earlier in the year (82 Civ. 1049-JES).

 In the fifth and sixth claims, plaintiff challenges the propriety of two decisions regarding the compensation paid to two top Lionel executives, defendants Schilling and Saypol.

 In 1977, the Board of Directors of Lionel, with shareholder approval, adopted an employee compensation plan known as "the Performance Share Plan" ("the Plan"). The Plan was designed to provide key employees with incentives to improve long term corporate growth.To further this goal the Plan established a pool of 315,000 "performance shares" which would be paid as a bonus to chosen employees if the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.