Zenn v. Anzalone
| Decision Date | 09 March 1959 |
| Citation | 17 Misc.2d 897,191 N.Y.S.2d 840 |
| Parties | Sadie ZENN, Freda Blumenthal, Henry Mencher, Abraham L. Fistel, Jeanette Annenberg, Bernard Lieberman, Nicholas Schepis, Jacob Haimowitz and Frances Koenig, Carl M. Siroty, Rupert T. Brown and Sadie B. Unger, Plaintiffs, v. J. J. ANZALONE, Herman R. Neff, Frank B. Bateman, Brooks Potter, O. Henry Briggs, R. W. Puercell, Thomas J. Deegan, Jr., Sidney W. Richardson, Walter W. Foskett, Radcliff Swinnerton, Henry J. Guild, Andrew Van Pelt, Allan P. Kirby, Anita O'Keefe Young, as Executrix under the Last Will and Testament of Robert R. Young, deceased, Clint W. Murchison, Clint W. Murchison, Jr. and John D. Murchison, individually and as partners, doing business under the firm name and style of Murchison Brothers, Chesapeake Industries, Inc., New York Central Railroad Company and Alleghany Corporation, Defendants. |
| Court | New York Supreme Court |
Pomerantz, Levy & Haudek, New York City (Abraham L. Pomerantz, William E. Haudek, New York City, of counsel), for plaintiffs.
Daniel W. Blumenthal, New York City, for plaintiff Freda Blumenthal.
Graubard & Moskovitz and Rosston, Hort & Brussel, New York City (Seymour Graubard, Philip Kazon, New York City, of counsel), for Samuel Rosen, a stockholder.
Arthur W. Lichtenstein, New York City (Arthur W. Lichtenstein, Alexander Kahan, New York City, Harry Bijur, New York City, of counsel), for Adelaide Neuwirth and for Alexander Kahan. Edward Endelman, New York City, for Sadie B. Unger, plaintiff in Federal Consolidated Action.
Geist & Netter, New York City (Karl E. Liebel, George E. Netter, New York City, of counsel), for Carl M. Siroty, plaintiff-intervenor in Federal Court Action.
Sidney L. Garwin, New York City, for plaintiff Henry Mencher.
Israel Beckhardt, New York City, for Jacob Haimowitz, plaintiff in consolidated action.
Leviss & Gordon, Flushing (William Rosenfeld, New York City, Arthur Gordon, Flushing, of counsel), for plaintiff Bernard Lieberman.
Morris J. Levy, New York City, for Charles Monheit, plaintiff in Federal Court Action.
Davis & Quat, New York City (Leon Quat, New York City, of counsel), for Joseph Schildkret, Stockholder in New York Central R. Co.
Charles Trynin and Irving Steinman, New York City, for plaintiff Frances Koenig.
Abraham I. Markowitz, Amityville, New York City, for Millie Eisenberg, plaintiff in Federal Court Action.
Norman Annenberg, New York City, for plaintiff Jeanette Annenberg.
Tachna, Pinkussohn & Bauman, New York City (Max Tachna, Paul Bauman, New York City, of counsel), for I. Tachna & Co., stockholder.
Nemerov & Shapiro and Trotta & Spata, New York City (Leonard Brunner, New York City, of counsel), for Nicholas Schepis, plaintiff in Consolidated Action.
Abraham M. Glickman, New York City (Abraham M. Glickman, Samuel H. Levinkind, New York City, of counsel), for plaintiff Abraham L. Fistel.
Zelby & Burstein, New York City (Herbert Burstein, Arthur Liberstein, New York City, of counsel), for Saul Tapper.
Diggins, Boychuk & Engel, New York City (Joseph M. Boychuk, New York City, of counsel), for Rupert T. Brown, a stockholder.
Peter George Martin, New York City, for defendant Alleghany Corp.
Lord, Day & Lord, New York City (Thomas F. Daly, Woodson D. Scott, Frank H. McFadden, New York City, of counsel), for defendants Directors Thomas J. Deegan, Jr., and Robert R. Young and New York Central Co.
Satterlee, Warfield & Stephens, New York City (William E. Stockhausen and F. W. H. Adams, J. R. Crowley, New York City, of counsel), for Clint W. Murchison, Sidney W. Richardson and Clint W. Murchison, Jr., individually and as partners doing business under firm name of Murchison Brothers, subject to provisions of Paragraph 1, Page 3, of Stipulation of Settlement. Bartlett Poe & Claggett, Baltimore, Md. (Edgar Allen Poe, Baltimore, Md., of counsel), for stockholder Nellie B. Kelly.
This is an application to confirm the report of a Referee and for approval of a proposed compromise of a consolidated stockholders' derivative action, brought on behalf of Alleghany Corporation. The settlement, the fairness of which is before this court, consists of certain original terms, later increased by an augmented offer of the defendants. By the terms of this amended settlement proposal, the defendants are to pay as follows: the sum of $1,000,000 in cash to Alleghany; rescind the exchange by Alleghany of 130,000 common voting shares of Investors Diversified, Inc., stock for 130,000 nonvoting Class A shares of Investors Diversified, Inc. stock; and amend a loss guarantee agreement running from the Murchison Brothers to Alleghany so as to apply separately rather than in the aggregate to each of certain joint ventures between Murchison Brothers and Alleghany.
In reaching a determination as to whether or not the proposed agreement of settlement is worthy of judicial approval, this court must weigh the benefits held forth by the agreement of settlement against benefits dependent on the likelihood of recovery upon the plaintiffs' cause of action (Shielcrawt v. Moffett, Sup.Ct., Sp.Term, N.Y.Co., 59 N.Y.S.2d 619, 621) keeping in mind that agreements of compromise are generally favored by the courts (Weil v. Weil, 1st Dept., 227 App.Div. 378, 385, 237 N.Y.S. 668, 676) in order to avoid the determination of sharply contested and dubious issues (In re Prudence Co., 2 Cir., 98 F.2d 559, 560, certiorari denied sub nom. Stein v. McGrath, 306 U.S. 636, 59 S.Ct. 485, 83 L.Ed. 1037). Every proposed settlement in this type of litigation constitutes a compromise in which each of the parties expects to make some surrender, in order to prevent costly and protracted litigation. And in determining the plaintiffs' chance of success upon the issues presented and a correlative conclusion drawn as to the fairness and reasonableness of the proposed compromise, it is not incumbent upon this court 'to balance the scales with the nicety of an apothecary' (Shielcrawt v. Moffett, supra ).
However, this court is the beneficiary of a lucid, painstaking and comprehensive report of a Referee achieved after protracted hearings which more nearly resembled a trial on the merits than on the adequacy of the proposed settlement. These hearings conducted over a period of 35 days, wherein seven witnesses for the proponents of the settlement and 11 for the...
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