Gollust v. Mendell case brief summary
501 U.S. 115 (1991)
CASE FACTS
Respondent shareholder filed an action pursuant to § 16(b) of the Securities Exchange Act of 1934 (§ 16(b)), 15 U.S.C. S. § 78p(b) against petitioners, a group of partnerships and corporations. Respondent alleged that petitioners were insiders under § 16(b) who bought and sold stock within a six month period, realizing a gain for which petitioners owed the corporation. Petitioners argued that respondent no longer had standing when the corporation was sold and respondent's stock was converted. The appellate court found for respondent and petitioners appealed.
DISCUSSION
CONCLUSION
The Court affirmed, holding that plaintiff still had standing to pursue a claim under § 16(b) of the Securities Exchange Act of 1934 after his interest was exchanged in a merger for stock in the new parent corporation.
Recommended Supplements for Corporations and Business Associations Law
501 U.S. 115 (1991)
CASE SYNOPSIS
Petitioners appealed the judgment of the
United States Court of Appeals for the Second Circuit reversing the
granting of summary judgment to petitioners in respondents' action
pursuant to § 16(b) of the Securities Exchange Act of 1934, 15
U.S.C. S. § 78p(b).CASE FACTS
Respondent shareholder filed an action pursuant to § 16(b) of the Securities Exchange Act of 1934 (§ 16(b)), 15 U.S.C. S. § 78p(b) against petitioners, a group of partnerships and corporations. Respondent alleged that petitioners were insiders under § 16(b) who bought and sold stock within a six month period, realizing a gain for which petitioners owed the corporation. Petitioners argued that respondent no longer had standing when the corporation was sold and respondent's stock was converted. The appellate court found for respondent and petitioners appealed.
DISCUSSION
- The United States Supreme Court affirmed, holding that respondents owned a security of the issuer at the time the suit was instituted, and continued to have a financial interest in the conclusion of the litigation through his relationship with the new corporation.
- Respondent still stood to profit if his action was successful, just as he would if he still owned stock in the original corporation.
CONCLUSION
The Court affirmed, holding that plaintiff still had standing to pursue a claim under § 16(b) of the Securities Exchange Act of 1934 after his interest was exchanged in a merger for stock in the new parent corporation.
Recommended Supplements for Corporations and Business Associations Law
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