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GENERAL CAPITAL v. U.S. FAMILY SPORTING GOODS

November 8, 1972

GENERAL CAPITAL CORPORATION, AN OHIO CORPORATION, PLAINTIFF,
v.
U.S. FAMILY SPORTING GOODS, INC., A DELAWARE CORPORATION, ET AL., DEFENDANTS. U.S. FAMILY SPORTING GOODS, INC., A DELAWARE CORPORATION, COUNTER-PLAINTIFF, V. GENERAL CAPITAL CORPORATION, AN OHIO CORPORATION, COUNTER-DEFENDANT.



The opinion of the court was delivered by: Bauer, District Judge.

MEMORANDUM OPINION AND ORDER

This cause comes on defendants' motion to strike and dismiss the Complaint.

The plaintiff, General Capital Corporation, an Ohio corporation, filed a complaint against the defendants, U.S. Family Sporting Goods, a Delaware corporation; U.S. Distributing, Inc., a Virginia corporation; and William H. Rentschler, a resident of the State of Illinois. Jurisdiction is alleged to rest on diversity of citizenship pursuant to 28 U.S.C. § 1332.

The plaintiff's First Amended Complaint alleges that the defendants breached an Agreement and Promissory Note between the parties dated December 31, 1971. The plaintiff alleges inter alia, the following facts:

  1.  On or about December 31, 1971 plaintiff sold
      all outstanding stock of U.S. Distributing,
      Inc. (hereinafter U.S.D.) to U.S. Family
      Sporting Goods, Inc. (hereinafter "U.S.
      Family").
  2.  U.S. Family paid plaintiff $200,000 and
      signed a promissory note in the amount of
      $827,000.
  3.  To secure the payment of the note and other
      obligations of U.S.D. and U.S. Family,
      defendant U.S. Family pledged all outstanding
      U.S.D. stock to plaintiff.
  4.  Mr. Rentschler, President of U.S. Family and
      U.S.D., knew the terms of the Agreement
      between plaintiff and U.S.D. and U.S. Family.
  5.  Mr. Rentschler, despite such knowledge,
      intentionally interfered with the contractual
      relationship between plaintiff and U.S.D. and
      U.S. Family by:
      a. Appropriating in excess of $100,000 from
      the assets of U.S.D. for his own use;
      b. Causing other funds to be diverted from
      U.S.D. and used for other corporations owned
      or controlled by him.
  6.  The acts of Mr. Rentschler caused dissipation
      of the assets of U.S.D.
  7.  The acts of Mr. Rentschler lessened the value
      of collateral held by plaintiff.
  8.  The acts of Mr. Rentschler resulted in U.S.D.
      and U.S. Family breaching the agreement
      between ...

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