Gibson v. Ps Group Holdings, Inc

2000 WL 77818 (S.D. California 2000)

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Nature of the Case

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Facts

Gibson (P) sued on behalf of himself and a class of shareholders in investors in PS Group Holdings, Inc. (D). P alleged that D, its directors, and officers breached their fiduciary duties with a proposal by Integrated Capital Associates, Inc. to purchase all outstanding shares of D’s common stock at a price of $12 per share or $73 million. P alleges that Ds failed to disclose material facts in connection with the maximization of shareholder value and by excluding competitive case offers. On February 11, 2000, D filed a Proxy Statement with the SEC, which set a shareholder vote on the acquisition of D. P contends that the proxy statement contains various misrepresentations and omissions over the fairness of the proposed acquisition. On February 18, 2000, P filed an amended complaint, which added a breach of duty of candor based largely on what was contained in the proxy. On February 22, 2000, Ds removed the action to federal court pursuant to the Uniform Standards Act based on the fact that the amended complaint specifically alleged a violation of state law based in misrepresentations or omissions made in connection with the purchase or sale of D’s stock. D’s stock was traded on the New York Stock Exchange. P moved for remand to state court. P contends that this action falls outside the Uniform Standards Act because P seeks only equitable relief and not an award of damages and that even if removal is satisfied, the Act specifically exempts breach of fiduciary duty claims alleging fraud in connection with a vote on a merger or acquisition.