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VULCANIZED RUBBER & PLASTICS COMPANY v. SCHECKTER (06/29/60)

June 29, 1960

VULCANIZED RUBBER & PLASTICS COMPANY
v.
SCHECKTER, APPELLANT.



Appeals, Nos. 74, 75, 76 and 77, Jan. T., 1960, from order of Court of Common Pleas No. 6 of Philadelphia County, June T., 1959, No. 3494, in case of Vulcanized Rubber & Plastics Company v. I. Jerome Scheckter et al. Order reversed.

COUNSEL

David H. H. Felix, with him Benson Zion, and Felix & Felix, and Curtin & Heefner, and Verrill, Dana, Walker, Philbrick & Whitehouse, of the Maine Bar, for appellants.

William T. Coleman, Jr., with him Aaron M. Fine, Harold E. Kohn, and Dilworth, Paxson, Kalish, Kohn & Dilks, for appellee.

Before Jones, C.j., Musmanno, Jones, Cohen, Bok and Eagen, JJ.

Author: Cohen

[ 400 Pa. Page 406]

OPINION BY MR. JUSTICE COHEN.

On August 20, 1959, the appellee corporation moved for and was granted a temporary order restraining the appellants, two of whom had been both lawyers and accountants of the appellee and a third a former director, from voting any of appellee's stock owned, held or controlled by appellants at any future stockholder's meeting. After holding several hearings, the chancellor, finding that certain stock was acquired by appellants in breach of their fiduciary responsibilities, decreed that the restraining order be continued as a preliminary injunction pending final hearing and determination of the case. From this order appellants have taken these appeals.

The instant suit involves another round in the struggle between the present management group of the appellee, Vulcanized Rubber & Plastics Company, and a group headed by the individual appellants, Scheckter,

[ 400 Pa. Page 407]

Fish and Redland, for managerial control of the appellee corporation.*fn1 The appellee, a Maine corporation

[ 400 Pa. Page 408]

    with its business office in New York City and its factory in Morrisville, Pennsylvania,*fn2 is engaged in the manufacturing of rubber and plastics products. The appellants Scheckter and Fish, practicing lawyers and certified public accountants in Philadelphia, were employed by the appellee as tax counsel from 1944, and as accountants through their partnership in King and Company and King, Marryat and Company from 1951 until their discharge in June, 1959. In that period of time, through their various firms, they billed the appellee corporation in excess of $50,000 for professional services.

The chancellor found that from about March 1, 1956, until approximately the commencement of this action, a Weatherly Steel Castings Company and its successor, the appellant Dutron Plastics, Inc., made numerous purchases of the appellee's common stock, causing the price of the stock to ...


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