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February 16, 1982

Carl C. ICAHN et al., Defendants

The opinion of the court was delivered by: LEVAL

Schedule 13D, Item 4, of the Securities Exchange Commission's Regulations requires reporting persons who have acquired the requisite amount of securities of the issuing corporation to state in their filing under Section 13D the purposes of the acquisition. Among the possible purposes that must be reported are

(b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the issuer or any of its subsidiaries; (c) A sale or transfer of a material amount of assets of the issuer ...; (f) Any other material change in the issuer's business or corporate structure ....

 20 C.F.R. § 240.13d-101 (1981); see GAF Corp. v. Milstein, 453 F.2d 709, 717 (2d Cir. 1971), cert. denied, 406 U.S. 910, 92 S. Ct. 1610, 31 L. Ed. 2d 821 (1972). In this case the only statement of such purpose set forth in the 13D filing is a disclaimer of any plans or proposals "to liquidate the Issuer, sell its assets, merge it with any other person or persons, or make any other major change in its business or corporate structure."

 There is some substantial proof in the evidence submitted after a few days of hasty discovery to the effect that the defendants have formulated tentative purposes which would include extraordinary corporate transactions, material sales of assets and material changes in Marshall Field's business. The evidence, although sketchy and incomplete, suggests that the motivation for the sudden attempt to acquire effective control of Marshall Field (involving the investment of what may well run to $ 70,000,000) may be a perception that the real estate assets of the company are worth far more on a liquidation basis than the going business value of the retailing concern. This is the conclusion expressed in a study prepared for Mr. Icahn last year. There is also sketchy evidence that the purchasing group has already formulated some tentative plans as to how cash raised in the liquidation of certain real estate assets might be invested, including the acquisition of undervalued companies.

 Although mindful of the Court of Appeals' warning that Congress did not intend "to impose an unrealistic requirement of laboratory conditions that might make (the Williams Act) a potent tool for incumbent management to protect its own interest against the desires and welfare of the stockholders," Electronics Specialty Co. v. International Controls Corp., 409 F.2d 937, 948 (2d Cir. 1969), and of the warning of the Fifth Circuit that a registrant should not be required to make predictions of future behavior which may result in unjustified reliance by the public investor, Susquehanna Corp. v. Pan American Sulphur Co., 423 F.2d 1075, 1083-84 (5th Cir. 1970), I nonetheless question whether an acquirer of control whose acquisition is motivated primarily by plans, however tentative, which would seriously alter the structure and business of the acquiring company, is not obligated under the statute and regulations to inform the marketplace of the kind of plans being considered. Such advice can and should when appropriate be written in properly tentative language to avoid creating unjustified reliance.

 A comparison of the evidence of such purposes with the broad disclaimer in the 13D statement of any plans or proposals suggest that there are "sufficiently serious questions going to the merits to make them a fair ground for litigation." Jackson Dairy Inc. v. H. P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir. 1979) (per curiam).

 I conclude also that irreparable harm is present if the investing public and the present shareholders of Marshall Field are trading in a market place which is deprived of important and legally required information as to the acquiring group's intentions which may affect their judgment as to whether the stock should be sold, bought, or held.

 I find also that the balance of hardships, at least for a brief period, tips decidedly in favor of the grant of relief. The hardship to the investing public and the issuer's shareholders is that mentioned in the preceding sentence. The defendants have submitted no proof of hardship which they would suffer by reason of a brief court-imposed restriction on further purchases.

 I have therefore concluded that a temporary restraining order should be imposed on further acquisition by the defendants of shares of Marshall Field. This Order is based solely on the question whether the Schedule 13D filing has adequately disclosed the intentions of the acquiring group with respect to the issuer's assets, corporate structure and business. It is not in any part based on the allegations made by the plaintiff company under 18 U.S.C. § 1962.

 It is also contemplated that this order may be of very brief duration. The filing of an amended 13D statement which gives the public adequate information may well justify a lifting of this order so as to permit continued purchases in a properly informed market place. The order is also intended to give the plaintiff some further opportunity to conduct discovery to develop proof that would justify continuation of the restraint or entry of further orders as appropriate.

 As mentioned above, I am mindful that such litigation can be misused by management for self-perpetuation in a manner which is contrary to the interest and welfare of their stockholders. I recognize the possible validity of defendants' allegations that the present application is such an abuse. The court accordingly will remain available to both sides on short notice to modify or lift the present order as circumstances indicate.

 An order giving effect to the purposes of this Memorandum is being entered simultaneously.


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