Thursday, November 7, 2013

Hanson Trust PLC v. SCM Corporation case brief

Hanson Trust PLC v. SCM Corporation case brief summary
774 F.2d 47 (1985)

CASE SYNOPSIS
Appellant sought review of an order of the Southern District of New York that granted appellee's motion for a preliminary injunction and barred appellee from acquiring any shares of appellant as a result of shares acquired where appellee alleged that appellant violated the Williams Act, 15 U.S.C.S. § 78n(d)(1).

CASE FACTS
The parties were involved in a bidding contest for control of appellee, a large public corporation. Appellant made a public announcement to make a cash tender offer pursuant to the Williams Act, 15 U.S.C.S. § 78n(d)(1). Appellee entered into a leveraged buy-out agreement to stop appellant from gaining control. Appellant announced that it terminated its cash offer. Appellant then decided to make a cash purchase in the open market or through privately negotiated transactions. Appellee alleged that this purchase of stocks violated the Williams Act, 15 U.S.C.S. § 78n(d)(1).

DISCUSSION
  • The court held that the district court erred when it held that appellee's post-tender offer private purchases of stock constituted a de facto tender offer. 
  • The court vacated the preliminary injunction against appellant and remanded for further proceedings.

CONCLUSION
The court reversed and vacated the order of the district court that restricted appellant from acquiring any shares of appellee and remanded for further proceedings, holding that appellant's post-tender offer private purchases of appellee's stock did not constitute a de facto tender offer.



Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials

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