Case Detail

CSX Corp v. The Children's Investment Fund
On July 18, 2011, the U.S. Court of Appeals for the Second Circuit overturned a district court injunction that sought to require corporate raiders to carry out their activities in compliance with federal securities laws designed to protect shareholders. It held that the district court had interpreted those protections too broadly. Left unanswered by the appeals court was whether raiders who acquire an interest in a target company through purchase of “total-return equity swaps” are subject to restrictions imposed by the Williams Act. The decision was a partial setback for WLF, which filed a brief urging that the district court injunction be upheld. At issue was whether the raiders had complied with Williams Act requirements that they make a public disclosure as soon as their aggregate holdings exceed 5% of a publicly held corporation. WLF argued unless those rules are strictly enforced, investors will lose out because raiders will be able to purchase shares at artificially low prices.
Case Status:
Partial loss.
More Information and Downloads:
7/18/2008: Download the Brief

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