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IN THE MATTER OF ALLEGRETTI

August 2, 2005.

IN THE MATTER OF THE PETITION OF GIUSEPPE ALLEGRETTI AND RAFFAELE ALLEGRETTI TO PRESERVE TESTIMONY/EVIDENCE IN AID OF ANTICIPATED LITIGATION PURSUANT TO RULE 27 F.R.C.P.


The opinion of the court was delivered by: CHARLES HAIGHT, District Judge

MEMORANDUM OPINION AND ORDER

Petitioners Giuseppe and Raffaele Allegretti move for an order to perpetuate certain testimony and preserve documentary evidence on the authority of Fed.R.Civ.P. Rule 27. Specifically, petitioners seek to depose one Bruno Di Costanzo, a New York City resident,*fn1 and to obtain and preserve documentary evidence in connection with that deposition. Having considered the parties' written submissions and conducted a hearing, for the reasons stated below the Court denies the petition.

I. BACKGROUND

  The following facts are taken from Petitioners' Verified Rule 27 Petition to Preserve Evidence, dated March 9, 2005, Respondent's Affidavit in Opposition, notarized on May 24, 2005, and all accompanying memorandums and affidavits, as well as the petition hearing held on June 1, 2005.

  Petitioners Giuseppe and Raffaele Allegretti are brothers who, along with a third brother, Vincenzo Allegretti, were members of an Italian business named All Gloves S.a.S. ("SAS"). For 30 years, SAS sold leather gloves in Italy. Vincenzo, not a party to this present petition, was responsible for the day to day operations and the general management of SAS. His official title was "Socio Accomandatario," which is the Italian equivalent to a general partner under New York law. Hence, Vincenzo was personally responsible for the company's liabilities. He owned 50% of SAS.

  Guiseppe and Raffaele were responsible for the manufacture of goods. According to petitioners, Vincenzo had the managerial skills, while petitioners had the technical skills. As such, petitioners never inquired about the management or finances of SAS. They received a salary from SAS as employees. In addition, the two brothers each owned 25% of SAS stock and served as limited partners of the company — unempowered to make management decisions nor personally responsible for SAS's debts.

  Beginning in the 1980s, SAS sold its products in the U.S., initially only through independent agents and distributors. By the early 1990s, SAS decided to create its own U.S. business entity. The company sent Bruno Di Costanzo, a former SAS employee, to the U.S. to create, manage and run the new business.

  Di Costanzo was an SAS employee from 1980 through 2004, and as such received a salary from SAS. In addition, in 1992 Di Costanzo created All Gloves Inc. ("AGI"), a New York corporation. Initially AGI was wholly owned by SAS. AGI purchased leather gloves wholesale from SAS and sold them in North America for profit. From 1992 to 2004, when SAS ceased manufacturing activities, SAS was the sole supplier of gloves to AGI.

  Di Costanzo attests in an affidavit that he is 54 years of age and in good health. He has lived in Manhattan since the time he moved to the U.S. in 1992, has been married to an American citizen for over five years, and spends 90% of his time in this country. He states his intention of residing nowhere else but the U.S.

  While AGI lost revenue during its first two years of business, between 1994 and 2003 AGI was far more successful than SAS itself. Petitioners claim that during that period AGI made an average yearly revenue of $7.5 million. In some years, AGI was SAS's sole source of income. Petitioners do not know these facts with particular certainty. Rather, whatever knowledge they have of the financial aspects of SAS's business appears to have been acquired solely from conversations, typically informal, between petitioners and Vincenzo at the end of each fiscal year.

  The ownership of AGI is hotly contested in this petition. For his part, Di Costanzo alleges he was and is AGI's President and sole shareholder, having purchased all shares of the company from SAS, AGI's prior owner. Di Costanzo alleges that in 1993 or 1994, he and Vincenzo agreed that Di Costanzo would purchase AGI in its entirety for $10,000, which was equivalent to the capital that SAS had contributed to establish AGI. He alleges that he remains, to the present time, the sole shareholder of AGI. By contrast, petitioners claim that SAS was and is the sole shareholder of AGI.

  In February 2004, petitioners received a notice of an SAS shareholders meeting where the matter of ceasing operations and activity of SAS, due to financial difficulties, would be discussed. Petitioners allege they were shocked by the notice. Once petitioners received notice of the SAS shareholders meeting, they requested to inspect the books and records of AGI. They were denied on the ground that they had no entitlement to access or inspect AGI's books.

  Further disputes broke out between petitioners on the one side, and AGI, Di Costanzo, and Vincenzo on the other. Petitioners were informed, perhaps for the first time, that they had been issued no shares in AGI, and that SAS no longer had any ownership over AGI. They were also informed that AGI's annual sales revenue had sharply declined from $7.5 million to a few thousand dollars.

  Petitioners believed that SAS was in excellent financial shape, particularly in light of its sales by AGI. They claim that Vicenzo and Di Costanzo ceased activities of SAS to prevent petitioners from obtaining their rightful share of AGI's revenue. However, according to Di Costanzo, the true reason SAS was forced to cease activity was that in 2003 the families of Raffaele and Giuseppe improperly sold real estate that represented collateral for loans made by commercial banks to SAS. Di Costanzo contends that due ...


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