Quimbee logo
DMCA.com Protection Status

Donovan v. Bierwirth

680 F.2d 263 (1982)

Case BriefRelatedOptions
From our private database of 33,600+ case briefs...

Donovan v. Bierwirth

United States Court of Appeals for the Second Circuit

680 F.2d 263 (1982)

Facts

In the fall of 1981, LTV Corporation attempted a hostile takeover of the Grumman Corporation. Grumman’s board of directors unanimously adopted a resolution to oppose LTV’s tender offer, and John Bierwirth, chairman of Grumman’s board, sent a letter to the company’s shareholders requesting their help in defeating the offer. Bierwirth’s letter argued that the price offered by LTV of $45 per share was inadequate and that LTV’s pension fund was severely underfunded. Bierwirth, Robert Freese, and Carl Paladino (trustees) (defendants) were the trustees of the Grumman Corporation Pension Plan (plan). Freese was also a Grumman officer, and Paladino was an officer of a Grumman affiliate. The trustees voted not to tender the plan’s Grumman shares and decided to purchase additional Grumman stock on behalf of the plan up to the limit of 10 percent of the plan’s assets permitted under the Employee Retirement Income Security Act of 1974 (ERISA). The plan purchased 958,000 shares at an average price of $38.61 and an additional 200,000 shares at an average price of $36.62, for a total cost of $44.3 million. Before LTV’s tender offer, Grumman’s stock had been trading at approximately $24–$27 per share. In a separate action, the LTV offer was temporarily enjoined, drastically reducing its chances for success and causing the price of Grumman’s common stock to drop. The value of the plan’s newly purchased shares fell to $32.5 million. The United States secretary of labor, Raymond Donovan (plaintiff), brought an action against the trustees, arguing that they breached fiduciary duties owed to the plan’s participants under ERISA. The district court preliminarily enjoined the trustees from buying, selling, or exercising any rights with respect to Grumman securities, and the trustees appealed.

Rule of Law

Issue

Holding and Reasoning (Friendly, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 602,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 602,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 33,600 briefs, keyed to 984 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 602,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 33,600 briefs - keyed to 984 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership