Opinion ID: 1799426
Heading Depth: 2
Heading Rank: 3

Heading: Brainin Group's Position.

Text: It is the position of the Brainin group that its sale of controlling stock interest to Gulf was made in good faith and that it was a straight stock sale unaccompanied by any commitments or agreements for the transfer of either office or control. At no time, they say, did the Brainin group take any action which plaintiff even claims to be detrimental, other than the exercise of their [Brainin's] lawful right to sell the stock which they owned. They take sharp issue with the trial court which found that The Brainins furnished the material whereby control was to be delivered and that the Brainin group [as well as the Pritzker group] benefited financially. Brainin says the only material which they furnished was the sale of 46% of Fenestra stock to Gulf which they contend they had a perfectly good legal right to do. Further, Brainin says that the financial benefit which the trial court alludes to is their sale of the stock above current market quotations, which, they contend, is entirely legal. Brainin rejects the suggestion that as controlling stockholders they were fiduciaries for other stockholders, contending that this relationship arises only when stockholders actually assume control of the corporation. Brainin points out that at no time did they have control of the management of the corporation, which must be conceded. Brainin also contends that the proofs are totally lacking, both as to testimony and documents alike, that there was any understanding or agreement with any of the defendants constituting a conspiracy, reiterating that it was a straight stock sale without any other commitments or private agreements. They argue that an action for civil conspiracy is essentially an action for damages inflicted by tort pursuant to a preconceived plan for an unlawful purpose or by unlawful means. They say that not only has there been no damage but neither has there been any conduct constituting conspiracy. Assuming, they say, that even if Gulf's intentions had been unlawful there was no tortious damage, hence the suit was prematurely brought, to say the least. The Brainin group argues further that Here, no merger, loan, or intercorporate transaction has even been formulated, much less actually submitted or proposed. Yet the judgment below against the selling defendants of necessity rests upon a judicial and conclusive assumption that the purchaser will at some future date propose something so improper and illegal as to require the present drastic and sweeping judgment divesting even the lien rights of the sellers. In effect, they say, defendants have been convicted of rape without even the semblance of an indecent proposal. The Brainin group also objects to what is termed the harshness of the remedy of divestiture (of retained lien rights, in their case) and because the divestiture affects not merely the named defendants of the Brainin group, that is, Brainin, Taub, Projansky, Kaiserman, and the Argus Capital Corporation, but also nearly 80 others who were in the joint venture with Brainin but who were not defendants in this lawsuit. The group also objected to the jurisdiction of the court because they are nonresidents who were served outside the jurisdiction and who claim that their contacts within the State were insufficient to give the court jurisdiction over them.