Sunday, November 24, 2013

Lovenheim v. Iroquois Brands, Ltd. case brief

Lovenheim v. Iroquois Brands, Ltd. case brief summary
618 F. Supp. 554 (1985)


CASE SYNOPSIS
In an action alleging violations of 17 C.F.R. § 240.14a-8 and the Securities Exchange Act of 1934, 15 U.S.C.S. § 78n(a) plaintiff moved for a preliminary injunction barring defendant from excluding certain information from their proxy materials.

CASE FACTS
Plaintiff brought suit to enjoin defendant from excluding the materials he requested from the proxy materials to be sent out to shareholders. Defendant challenged claiming that service was process was insufficient, and the court had no jurisdiction. The defendant also claimed that 17 C.F.R. § 240.14a-8 and the Securities Exchange Act of 1934, 15 U.S.C.S. § 78n(a)were not applicable to this case.

DISCUSSION

  • The court first found that both jurisdiction and service of process was sufficient to maintain the case. 
  • The court also found that 17 C.F.R. § 240.148(c)(5) did not contain an economic significance test and therefore the social significance of the plaintiff's proposal excluded it from the exception. 
  • The court further found that the public and the plaintiff's interests would be irreparably harmed without the relief sought, while ordering the relief would not unduly prejudice the defendant. The court granted plaintiff's motion for injunctive relief.

CONCLUSION
Plaintiff's motion for preliminary injunction was granted because public interest would be satisfied by including the requested information in the proxy statements without undue prejudice to the defendant.

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