Reynolds v. Special Projects, Inc.

—In 1959 Jess S. Morgan, agent for plaintiff Debbie Reynolds, approached defendant H. G. Saperstein, an experienced “merchandiser of personalities,” in connection with the “merchandising” of Debbie Reynolds’ name. “Merchandising” of personalities consists of licensing manufacturers and retailers to attach the name of the personality to their product to promote their sales in exchange for a fee payable to the personality.

Morgan wished to use a corporation in order to avoid the effect of certain tax provisions unfavorable to Debbie Reynolds, and Saperstein agreed. The parties agreed to use a…