Manuel M. Ellis v. Victor Carter, Etc.

This is an action for $1,315,000 damages and other relief based on allegations of fraud in connection with an asserted joint venture to acquire control of Republic Pictures Corporation. Plaintiff Manuel M. Ellis is a major stockholder of that company. Defendants Victor M. Carter and Herbert J. Yates are the chairman and former chairman, respectively, of the corporation’s board of directors. Defendants Louis Boyar, Benjamin Weingard and Value Line Income Fund, Inc., are alleged to be stockholders.

According to the complaint, after Ellis and Carter entered into a joint venture to acquire control of Republic, Carter and the other defendants effectuated a fraudulent scheme to acquire such control for themselves. Pursuant to this scheme, it is alleged, Carter sold 10,000 shares of Republic stock to Ellis at a price of ten dollars a share, fraudulently representing that this stock carried with it a voice in the management of the company. It is averred that, relying upon this representation, Ellis purchased the stock at this price'notwithstanding the fact that the market price of such stock was then $8.50 a share. Defendants thereafter gained control of Republic, and Ellis alleges that…