89 F.R.D. 446 (E.D.N.Y. 1981), 78 Civ. 1444, Federal Deposit Ins. Corp. v. Tisch

Docket Nº:78 Civ. 1444.
Citation:89 F.R.D. 446
Opinion Judge:PLATT, District Judge.
Party Name:FEDERAL DEPOSIT INSURANCE CORPORATION, in its Corporate Capacity and as Receiver of Franklin National Bank, Plaintiff, v. Laurence A. TISCH, Tisch Hotels, Inc., Loews Corporation, Loew's Theatres, Inc., Lawton General Corp. and Loew's Hotels, Inc., Defendants.
Attorney:Barrett, Smith, Schapiro, Simon & Armstrong, New York City, for FDIC & Sol Neil Corbin, as Trustee in Bankruptcy of Franklin New York Corp. Wachtell, Lipton, Rosen & Katz, New York City, for defendants.
Case Date:February 27, 1981
Court:United States District Courts, 2nd Circuit, Eastern District of New York
 
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Page 446

89 F.R.D. 446 (E.D.N.Y. 1981)

FEDERAL DEPOSIT INSURANCE CORPORATION, in its Corporate Capacity and as Receiver of Franklin National Bank, Plaintiff,

v.

Laurence A. TISCH, Tisch Hotels, Inc., Loews Corporation, Loew's Theatres, Inc., Lawton General Corp. and Loew's Hotels, Inc., Defendants.

No. 78 Civ. 1444.

United States District Court, E.D. New York.

February 27, 1981

Federal Deposit Insurance Corporation, as receiver of bank, sought to join trustee in bankruptcy of the bank as a party plaintiff. The District Court, Platt, J., held that: (1) where FDIC has retained an interest in the suit, substitution was not proper; (2) joinder of the trustee was proper; and (3) assignment with the FDIC retaining some interest in the outcome of the litigation did not eliminate the basis for federal subject-matter jurisdiction.

Order accordingly.

Page 447

Barrett, Smith, Schapiro, Simon & Armstrong, New York City, for FDIC & Sol Neil Corbin, as Trustee in Bankruptcy of Franklin New York Corp.

Wachtell, Lipton, Rosen & Katz, New York City, for defendants.

MEMORANDUM AND ORDER

PLATT, District Judge.

Plaintiff, Federal Deposit Insurance Corporation (" FDIC" ), in its corporate capacity and as receiver of the Franklin National Bank, moves pursuant to Fed.R.Civ.P. 25(c) to join as a party plaintiff Sol Neil Corbin, the trustee in bankruptcy of the Franklin New York Corporation (" FNYC" ) and the assignee of the FDIC's claims against the defendants herein. Defendants have cross-moved to dismiss the action for lack of subject matter jurisdiction or, in the alternative, for a stay of this action until the conclusion of the suit of Corbin v. Tisch, Index No. 11911/78 pending in Supreme Court, New York County.

I

This action is one of the numerous splinter lawsuits occasioned by the collapse of the Franklin National Bank in 1974. Background facts are set forth in this Court's prior opinion in the related case of In re Franklin National Bank Securities Litigation, 445 F.Supp. 723 (E.D.N.Y.1978). Familiarity therewith is assumed for the purpose of this opinion.

Page 448

Briefly, this particular action deals with a sale in July 1972 of FNYC common stock from defendant Loews to Fasco International Holdings, S.A., a company owned by Michele Sindona. In this action, commenced on July 6, 1978, the FDIC claims that defendants withheld from...

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