Santa Fe Industries, Inc. v. Green
United States Supreme Court
430 U.S. 462 (1977)
Santa Fe Industries, Inc. (Santa Fe) (defendant) controlled 95 percent of Kirby Lumber Corp.’s (Kirby) stock. Santa Fe sought to own 100 percent of the stock, so it filed for a merger under the Delaware short-form merger statute, which allows a parent corporation owning at least 90 percent of the subsidiary to merge with the subsidiary and make a cash payment to the minority stockholders. The statute does not require approval of the minority stockholders, only notice within 10 days of the merger. The statute provides that if the minority stockholders are unhappy with the merger, they can petition the Delaware Court of Chancery to attempt to obtain fair value for their shares. Santa Fe followed the statute and completed the short-form merger, giving the minority stockholders of Kirby $150 per share, a value based on an appraisal by Morgan Stanley. The minority stockholders (plaintiffs), rather than petitioning the state court as called for by the statute, brought suit in federal court seeking to set aside the merger on the grounds that the appraisal was fraudulent in violation of SEC Rule 10b-5. The district court dismissed the Rule 10b-5 complaint for failure to state a claim because it did not allege a material misrepresentation or nondisclosure. The United States Court of Appeals for the Second Circuit agreed that the complaint did not allege a material misrepresentation or nondisclosure, but reversed, holding that neither misrepresentation nor nondisclosure was an essential element of Rule 10b-5. The United States Supreme Court granted certiorari.
Rule of Law
Holding and Reasoning (White, J.)
What to do next…
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 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
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. Read more about Quimbee.
Here's why 169,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 13,800 briefs, keyed to 187 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.