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WACHTEL v. STORM

August 20, 1992

JESSE WACHTEL, Plaintiff, against KARL STORM, Defendant.


The opinion of the court was delivered by: MICHAEL B. MUKASEY

 MICHAEL B. MUKASEY, U.S.D.J.

 In this diversity action, plaintiff, Jesse Wachtel, sues defendant, Karl Storm, for defamation. Defendant moves to dismiss the action for improper venue pursuant to Fed. R. Civ. P. 12(b)(3) and for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). For the reasons set forth below, defendant's motion is denied.

 I.

 Plaintiff, a citizen of Florida, "is a giant in the women's shoe business." (Compl. P 4) The founder of Intershoe, Inc., plaintiff has created several internationally famous brands of women's shoes including Nickels, Jazz, Paloma, Via Spiga, Glacee and Studio Paolo. Under plaintiff's direction Intershoe "was so successful that, in 1987, one of it's divisions was named Footwear News Magazine's Importer of the Year." (Id.) After selling his majority interest in Intershoe, plaintiff assumed his current position as President of Signature Shoes, Ltd., which imports women's shoes from Spain and Italy.

 In 1990, defendant, a citizen of Pennsylvania, sold his family's retail shoe business to plaintiff who operated it under the corporate name Storm's Inc. In January 1992, Storm's Inc. filed for bankruptcy pursuant to Chapter 7 of Title 11 of the United States Code. The March 2, 1992 issue of Footwear News, a shoe industry trade publication, carried the following letter to the editor:

 Just to set the record straight, I want to be sure that all my friends and associates in the shoe industry understand that Storm's Inc. and Storm Shoes Inc. were two entirely different companies. Storm Shoes Inc., Wilmington Del., existed from 1933 to Jan. 31, 1990. At that time, I sold my family's eight store chain to Jesse Wachtel of Intershoe, M&N and Bellini fame.

 Storm's Inc., now bankrupt and closed, consisted of my former stores plus 10 or so Head Over Heels outlet stores that Wachtel had operated. During the 18 or so months Storm's Inc. existed, the Storm's stores continued to contribute operating profit while the remaining Head Over Heels stores (eight of the 10 were closed in 1991), under the buying and supervision of Katie Wachtel, continued to operate at a tremendous loss. (Katie Wachtel is Jesse Wachtel's daughter.) These losses, coupled with outrageous overhead and unrelated business expenses, are what led to the bankruptcy.

 I say farewell to all my family's friends and associates throughout the country. There's a big void in Delaware for a service shoe operation -- someone should pick up the stores, especially since Mr. Wachtel is out of the picture.

 Remember the Storm family isn't responsible for a dime owed to any of you. Farewell and good luck to the independent shoe retailers left.

 Sincerely,

 Karl Storm

 Former ...


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