(Download) "Portnoy v. Kawecki Berylco Industries Inc." by Seventh Circuit United States Court of Appeals * eBook PDF Kindle ePub Free
eBook details
- Title: Portnoy v. Kawecki Berylco Industries Inc.
- Author : Seventh Circuit United States Court of Appeals
- Release Date : January 01, 1979
- Genre: Law,Books,Professional & Technical,
- Pages : * pages
- Size : 66 KB
Description
The sole issue in this appeal is whether the plaintiff, a shareholder of both Cabot Corporation (Cabot) and Kawecki Berylco Industries, Inc. (KBI), has standing to bring an action under Section 16(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78p(b), for recovery of profits allegedly obtained by International Mining Corporation (IMC) from short-swing trading of shares of KBI.1 The structure and relationship of the corporations involved and the changes in that structure and relationship are critical to the outcome. At the time the plaintiff filed his complaint on May 26, 1978, he was a shareholder of KBI and of Cabot.2 Cabot was the parent of Cabot Special Metals Corporation (CSMC), which in turn owned Tuckerton Corporation (Tuckerton). Five days later, on May 31, 1978, Tuckerton merged into KBI. The plaintiff and other premerger shareholders of KBI received cash in exchange for their shares of KBI common stock, and CSMC became KBI's sole shareholder. Thus, KBI became a wholly owned subsidiary of CSMC which was a wholly owned subsidiary of Cabot. After the merger, the plaintiff amended his complaint to state that it was brought on behalf of Cabot in addition to KBI. As a result, the standing issue is really a bifurcated one. First, we must determine whether the plaintiff lost his standing when, because of the merger, he lost his status as a shareholder of KBI, and second, we must determine whether his status as a shareholder of Cabot confers standing.
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