Howing Co. v. Nationwide Corp.
United States Court of Appeals for the Sixth Circuit
927 F.2d 263 (1991)
Facts
Nationwide Corporation (defendant) solicited the proxy votes of Howing Company (plaintiff) and other minority shareholders to approve Nationwide’s merger with its corporate parent. Such going-private and freezeout-merger transactions were governed by Securities and Exchange Commission (SEC) Rule 13e-3. Howing sued Nationwide for failing to comply with Rule 13e-3’s disclosure requirements. A federal district court dismissed the case, and Howing appealed. The Sixth Circuit reversed on the grounds that Nationwide had failed to adequately disclose its net book, going-concern, and liquidation values, all of which was information clearly and specifically called for by the instructions to Item 8 of SEC Schedule 13E-3. The appellate court remanded the case for the district court to consider the materiality of the undisclosed information. On remand, the district court found that no reasonable shareholder could have considered the undisclosed information to be material. The district court granted summary judgment for Nationwide. Howing appealed once more to the Sixth Circuit.
Rule of Law
Issue
Holding and Reasoning (Merritt, C.J.)
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