Rondeau v. Mosinee Paper Corp.

Francis Rondeau (defendant) bought up shares of Mosinee Paper Corp. (plaintiff) in his own name or through businesses or a foundation he owned. He quickly acquired more than 5 percent of Mosinee’s outstanding shares but failed to file a Schedule 13D disclosure as required under the Williams Act. Rondeau continued buying Mosinee stock until Mosinee’s chairman sent him a letter noting the disclosure problem. Rondeau consulted an attorney, then filed a Schedule 13D disclosing that he believed Mosinee’s stock was undervalued and a good investment, intended to obtain control of the company and was considering making a public cash tender offer to buy out other shareholders, and might make management changes upon obtaining control of the company. Mosinee sued, alleging that Rondeau, his companies, and banks that helped finance his acquisitions were engaged in a scheme to defraud the company and its shareholders, and that shareholders had sold shares without material information Rondeau was required to disclose under the Williams Act. Mosinee requested an injunction preventing Rondeau from voting his stock or acquiring more and requiring him to return the stock he had purchased. Rondeau claimed he did not know he was supposed to file the disclosure and that neither Mosinee nor its shareholders had suffered any harm because of his late filing. The court agreed and entered summary judgment for Rondeau. The appellate court reversed, reasoning that the late filing delayed the company’s efforts to respond to Rondeau’s takeover attempt and that the Williams Act does not require irreparable harm to enter injunctive relief. As a result, the appellate court enjoined Rondeau from voting his shares for five years. Rondeau appealed. Noting a split on the issue among the circuit courts, the Supreme Court granted review.