Field v. Trump
United States Court of Appeals for the Second Circuit
850 F.2d 938, cert. denied 109 S.Ct. 1112 (1988)
- Written by John Caddell, JD
Facts
Julius and Eddie Trump (the Trumps) (defendants) proposed to acquire Pay’n Save, Inc. through a two-step merger. On September 7, 1984, the board of Pay’n Save accepted the Trumps’ offer and announced that the Trumps would commence a tender offer at $22.50 per share to be followed by a cash-out merger at the same price. Two Pay’n Save directors, Samuel Stroum and Stuart Sloan, dissented from the proposal and issued a statement criticizing the board. On September 12, the Trumps informed the Pay’n Save board that they were withdrawing their tender offer in order to negotiate with Stroum and Sloan. The same day, the Trumps reached an agreement to purchase Stroum and Sloan’s holdings for $3.3 million, a rate of $23.50 per share. Additionally, the Trumps agreed to pay $900,000 for Stroum and Sloan’s expenses. The total sum equaled a price of $25 per share. On September 13, Pay’n Save’s board announced that the Trumps would soon open a new tender offer for shares of Pay’n Save at a price of $23.50 per share. A Pay’n Save shareholder (plaintiff) who tendered shares at $23.50, sued the Trumps, Pay’n Save, and Pay’n Save’s directors and officers on behalf of a purported class of shareholders. The complaint alleged that the Trumps made a discriminatory tender offer that granted Stroum and Sloan a better price in violation of Securities and Exchange Commission (SEC) Rule 14d-10. The trial court granted the defendants’ motion to dismiss, holding that because the Trumps had withdrawn their initial tender offer, the best price rule did not apply to the transaction with Stroum and Sloan. The plaintiff appealed.
Rule of Law
Issue
Holding and Reasoning (Winter, J.)
What to do next…
Here's why 804,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 46,300 briefs, keyed to 988 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.
