Kennecott Copper Corp. v. Curtiss-Wright Corp.

Kennecott Copper Corp. v. Curtiss-Wright Corp.

Opinion

 [*955]  MacMAHON, District Judge.

Plaintiff Kennecott Copper Corporation ("Kennecott") brought this action on March 22, 1978 alleging multiple violations of the securities and antitrust laws by defendant Curtiss-Wright Corporation ("Curtiss-Wright"). Kennecott seeks a permanent injunction: (1) prohibiting the further solicitation of proxies and the voting of Kennecott shares and proxies now held by Curtiss-Wright at the Kennecott annual meeting set for May 2, 1978; and (2) directing Curtiss-Wright to divest itself of its holdings of Kennecott stock. Curtiss-Wright denies Kennecott's allegations and counterclaims for permanent injunctive relief prohibiting further solicitation by Kennecott and the voting of shares and proxies held by Kennecott at the May 2 meeting.

Time is of the essence due to the imminence of Kennecott's annual meeting. We, therefore,  [**2]  on motion of Kennecott, ordered the trial of the action on the merits to be advanced and consolidated with the hearing of the application for a preliminary injunction. Rule 65(a), Fed.R.Civ.P. The trial was held on April 24 through April 27; 17 witnesses testified and 59 exhibits were received in evidence.

INTRODUCTION

This litigation is the fall-out of an ongoing proxy contest launched by Curtiss-Wright for control of Kennecott. Between November 23, 1977 and March 10, 1978, Curtiss-Wright quietly purchased some 9.9% of Kennecott's outstanding shares in transactions both on and off the national securities exchanges. Curtiss-Wright filed its Schedule 13D with the Securities and Exchange Commission ("SEC") on March 13. The schedule stated, in part, that Curtiss-Wright was "considering soliciting proxies from [Kennecott's] shareholders . . . looking to the election of directors" to Kennecott's board. Four days later, Kennecott management distributed its proxy materials, soliciting shareholders to return a proxy empowering the holder to vote the shares in favor of incumbent management.

On March 23, the battle lines were formally drawn when the Curtiss-Wright board authorized [**3]  its management to wage a proxy contest to elect its own slate of directors to the Kennecott board. On April 4, Curtiss-Wright's proxy materials were mailed to Kennecott shareholders. Since that date, both sides have sent several additional communications to Kennecott shareholders. With this background, we turn now to the parties' contentions.

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