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United States Court of Appeals for the Second Circuit
April 17, 1989, Argued ; December 6, 1989, Decided
No. 1021, Docket No. 89-7054
[*425] MAHONEY, Circuit Judge:
Plaintiff-appellant Ruth Kamerman ("Kamerman"), executrix of the estate of Norman Kamerman, the original plaintiff, alleges that defendant-appellee Saul Steinberg ("Steinberg"), in concert with defendants-appellees Reliance Group Holdings, Inc. ("RGH"), Reliance Group Inc. ("RG"), Reliance Financial Services Corp. ("RFS") and Reliance Insurance Company ("RIC") (collectively "Reliance"), companies in which Steinberg holds a controlling interest, 1 "greenmailed" defendant-appellee Walt Disney Productions, Inc. ("Disney"), a company of which Kamerman is a shareholder, by purchasing a large block of Disney stock and then, following the threat of a hostile tender offer, selling that stock to Disney at a substantial premium over market.
[**3] This appeal, arising from a consolidated action below, was taken from a judgment of the United States District Court for the Southern District of New York, Constance Baker Motley, Judge, which dismissed Kamerman's (1) derivative claim brought on behalf of Disney seeking rescission and related injunctive relief on the basis that Reliance filed materially false Schedule 13D forms which failed to disclose its intention to greenmail Disney, in violation of sections 10(b) and 13(d) of the Securities Exchange Act of 1934 (the "Act"), 15 U.S.C. § 78j(b) (1982) and 15 U.S.C.A. § 78m(d) (West 1981 & Supp. 1989), and Rules 10b-5 and 13d-101 promulgated thereunder, 17 C.F.R. §§ 240.10b-5, 240.13d-101 (1988); (2) derivative and individual claim 2 for injunctive relief requiring Reliance to correct the Schedule 13D filings made for each purchase of Disney stock to state that the basic and primary purpose of the purchases was to greenmail Disney; and (3) derivative state claim for rescission and related injunctive relief for duress and coercion in connection with Disney's purchase of its common stock from Reliance.
[**4] The district court dismissed Kamerman's derivative securities fraud claims after finding that Disney was not deceived by the Schedule 13D filings. The district court dismissed as moot Kamerman's claim demanding that Reliance amend its Schedule 13D filings, since Reliance had already sold all of its shares of Disney stock. Finally, the district court dismissed Kamerman's state law claim for rescission based upon duress and coercion because Reliance's alleged threat to make a tender offer involved only a legal corporate action.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
891 F.2d 424 *; 1989 U.S. App. LEXIS 18833 **; Fed. Sec. L. Rep. (CCH) P94,806; 15 Fed. R. Serv. 3d (Callaghan) 960
RUTH KAMERMAN, Executrix of the Estate of Norman Kamerman, Plaintiff-Appellant, v. SAUL STEINBERG, RELIANCE GROUP HOLDINGS, INC., RELIANCE GROUP, INC., RELIANCE FINANCIAL SERVICES CORP., RELIANCE INSURANCE COMPANY, and WALT DISNEY PRODUCTIONS, INC., Defendants-Appellees
Prior History: [**1] Appeal from a judgment of the United States District Court for the Southern District of New York, Constance Baker Motley, Judge, dismissing plaintiff-appellant's (1) derivative federal securities claims seeking rescission and related injunctive relief for violations of sections 10(b) and 13(d) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) (1982) and 15 U.S.C.A. § 78m(d) (West 1981 & Supp. 1989), and Rules 10b-5 and 13d-101 promulgated thereunder, 17 C.F.R. §§ 240.10b-5, 240.13d-101 promulgated thereunder, 17 C.F.R. §§ 240.10b-5, 240.13d-101 (1988); (2) derivative and individual claim for an injunction requiring corrective disclosures of Schedule 13D filings; and (3) derivative state law claim seeking rescission and related injunctive relief for duress and coercion.
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Civil Procedure, Appeals, Appellate Jurisdiction, Final Judgment Rule, Pleadings, Counterclaims, General Overview, Judgments, Entry of Judgments, Multiple Claims & Parties, Business & Corporate Compliance, Initial Offerings of Securities, Registration of Securities, Required Contents of Registration Statements, Securities Law, Civil Liability Considerations, Remedies, Equitable Relief, Express Liabilities, Misleading Statements, Elements of Proof, Civil Liability, Fraudulent Interstate Transactions, Securities Exchange Act of 1934 Actions, Implied Private Rights of Action, Deceptive & Manipulative Devices, Securities Act Actions, Contracts Law, Affirmative Defenses, Coercion & Duress, Economic Duress, Defenses, Demurrers & Objections