Kennecott Copper Corp. v. Curtiss-Wright Corp.

584 F.2d 1195 (2nd Cir. 1978)

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Nature of the Case

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Facts

P sought to diversify by acquiring Peabody Coal Company. The Federal Trade Commission disagreed, and Peabody was sold. P received $ 809 million in cash and some five percent subordinated income notes due in 2007, for a face amount of $400 million but a present value of $ 171 million. P got ambitious and purchased the Carborundum Company for $567 million in cash. D decided to acquire an interest in P. D acquired 9.9 percent of the outstanding P shares at a cost of approximately $77 million. D suggested the nomination of a joint slate of candidates for P's board which would give D's nominees a minority position on the board. This was rejected, and D announced its own slate and a campaign platform to sell Carborundum at or above the $567 million and use the proceeds and other Kennecott funds to make either a tender offer for half the outstanding P shares at $ 40 per share, or a $20 per share cash distribution. P induced Utah to obtain an ex parte temporary restraining order enjoining D from purchasing any additional P shares or soliciting proxies anywhere in the United States. P then sued in New York. D counterclaimed, alleging improper proxy solicitation by P. The court permitted P to amend its complaint to allege improper proxy solicitation by D. Each party sought injunctive relief. The district court held that P's proxy solicitations had violated section 14(a) and Rule 14a-9(a). It held that D also violated sections 7 and 8 of the Clayton Act and that D's acquisition of P stock, prior to the filing of its Schedule 13D, was not a 'tender offer' for purposes of the Williams Act. D was enjoined from voting its shares and proxies. D appealed.