Thursday, November 21, 2013

Kennecott Copper Corp. v. Curtiss-Wright Corp. case brief

Kennecott Copper Corp. v. Curtiss-Wright Corp. case brief summary
584 F.2d 1195 (1978)

CASE SYNOPSIS
Defendant appealed from a judgment of the United States District Court for the Southern District of New York, which found that: (1) defendant, but not plaintiff, had violated § 14(a) of the Securities and Exchange Act, 15 U.S.C.S. § 78n(a); and (2) defendant violated §§ 7 and 8 of the Clayton Act, 15 U.S.C.S. §§ 18, 19, and permanently enjoined defendant from voting certain shares and proxies of plaintiff corporation.

CASE FACTS
Plaintiff alleged that defendant violated securities and antitrust laws in acquiring stock of plaintiff corporation; defendant and plaintiff each alleged improper proxy solicitation by the other. The court reversed the district court's holding that defendant's proxy solicitations were false and misleading in violation of § 14(a) of the Securities Exchange Act of 1934, 15 U.S.C.S. § 78n(a), and Rule 14a-9(a), 17 C.F.R. § 240.14a-9(a). The proxy stated that defendant had not made a detailed study and thus properly qualified its opinions.

DISCUSSION
  • The court reversed and remanded for a new trial on the finding that defendant violated § 7 of the Clayton Act, 15 U.S.C.S. §18, as defendant had inadequate time for discovery. 
  • The court reversed the finding that defendant violated § 8 of the Clayton Act, 15 U.S.C.S. § 19, for lack of proof. 
  • The court affirmed the finding that defendant's acquisition of stock was not made by a tender offer requiring a 13D filing with the SEC under the Williams Act, 15 U.S.C.S. § 78n(d). 
  • Because plaintiff had elected a board of directors when defendant was enjoined from proxy solicitation, the court ordered plaintiff to hold a new election.

CONCLUSION
The court affirmed the holding that defendant's acquisition of stock in plaintiff corporation was not made by a tender offer. The court reversed the finding that defendant one section of the Clayton Act for lack of proof; the court remanded for a new trial the question whether defendant violated another section of the Clayton Act; and it ordered plaintiff to void the election of directors to the board and hold a new election.

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