Thursday, November 7, 2013

Amanda Acquisition Corp. v. Universal Foods Corp. case brief

Amanda Acquisition Corp. v. Universal Foods Corp. case brief summary
877 F.2d 496 (1989)

Appellant, an acquisition corporation, sought review of a decision by the U.S. District Court for the Eastern District of Wisconsin, which refused to declare Wisconsin's anti-takeover statute, Wis. Stat. § 180.726(1)(e), unconstitutional. Moreover, the district court held that the anti-takeover statute was not preempted by the Williams Act, 15 U.S.C.S. §§ 78m(d),(e), and 78n(d)-(f).

Appellant, an acquisition corporation, was created for the sole purpose of acquiring a Wisconsin corporation, the shares of which were traded on the New York Stock Exchange. Appellant filed suit in the district court and sought, inter alia, a declaration that the Wisconsin anti-takeover statute, which made tender offers unattractive to potential bidders, was inconsistent with the Commerce Clause, U.S. Const. art. I, § 8, cl. 3, and was preempted by the Williams Act. The district court denied appellant's claim for relief.

  • In affirming the district court's decision, the court explained that the Williams Act governs the conduct of tender offers, including: timing, disclosure, proration if tenders exceed what the bidder is willing to buy, and best-price rules. 
  • The court held that the Wisconsin anti-takeover statute co-existed with the Williams act; therefore, the court found that the Wisconsin statute was not preempted. 
  • Furthermore, the court explained that the Commerce Clause grants Congress the power to regulate commerce among the several states. 
  • The court held that that the Wisconsin anti-takeover statute was not unconstitutional under the dormant Commerce Clause.
The court affirmed the judgment of the district court.

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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