Sunday, November 24, 2013

Morgan Stanley & Co. v. Archer Daniels Midland Company case brief

Morgan Stanley & Co. v. Archer Daniels Midland Company case brief summary
570 F.Supp. 1529 (S.D.N.Y. 1983)

Plaintiff corporation filed an action against defendant borrower under § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.S. §§ 78j, 17(a) of the Securities Act of 1933, 15 U.S.C.S. §§ 77q, 323(a), and § 316(b) of the Trust Indenture Act of 1939, 15 U.S.C.S. §§ 77www(a),77ppp(b), and other state and federal laws. Additionally, the corporation sought a preliminary injunction, and both parties filed motions summary judgment.

The corporation alleged that the proposed redemption plan was barred by the terms of the indenture and the debentures. Additionally, corporation argued that the borrower's failure to reveal its intention to redeem the debentures amounted to an intentional, manipulative scheme to defraud in violation of federal and state securities and business laws. Therefore, the corporation's preliminary injunction motion sought to enjoin borrower from consummating the redemption. The borrower contended that the corporations' allegation of securities fraud stemmed from its strained and erroneous interpretation of the redemption language.


  • With respect to the corporation's preliminary injunction motion, the court held that the corporation failed to present any facts supporting its contention that the money damages would be an adequate remedy should it prevail in the underlying action. 
  • Moreover, the court held that the corporation failed to establish the likelihood of success on the merits on any of its claims. 
  • Lastly, the court held that the corporation also failed to make a showing of a balancing of hardships tipping decidedly in its favor.

The court denied the corporation's application for preliminary injunctive relief and reversed the parties' cross motions for summary judgment.

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