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March 10, 1982

Carl C. ICAHN et al., Defendants

The opinion of the court was delivered by: LEVAL

On Renewal of Motion For Temporary Restraining Order

Marshall Field renews its motion for a temporary restraining order enjoining the Icahn group from making further purchases of Marshall Field stock pending hearing on the preliminary injunction motion.

 On February 16, 1982 I granted a temporary restraining order upon a finding of substantial questions as to whether the 13-D filing of the Icahn group adequately disclosed proposals for extraordinary transactions in the event the group acquired control. On February 19, 1982 a modified schedule 13-D was filed that in my view adequately disclosed such proposals as the evidence proved were being entertained by the Icahn group. I therefore lifted the temporary restraining order.

 During the period when the questionable 13-D was on file, the Icahn group purchased nearly 900,000 shares of Marshall Field stock, or about 8.7% of the outstanding stock. Since the lifting of the temporary restraining order, the group has apparently increased its ownership to approximately 23%.

 Marshall Field argues that the temporary restraining order should be reimposed because the group's possession of so large a portion of the company's shares effectively dissuades any other potential offeror from making competing offers to its shareholders. It contends that the group has acquired an effective blocking position, absent a grant of restraint.

 Marshall Field also contends that the present filing by the group fails to disclose adequately the group's intention to acquire control and to force the company to make extraordinary transactions.

 I find that the current 13-D is adequate, measured against the evidence submitted, in disclosing that the group may persevere to acquire control and, if so, that it may cause the company to engage in extraordinary transactions to realize what it perceives to be a value in real estate assets which far exceeds the book and market value. The evidence seems to show that the group also is maintaining an open option to sell its position if offered a sufficient profit. In my view, based on the existing evidence, to require a more firm statement of intentions may be to require a false statement, and might well mislead the investing public.

 Nor do I accept Marshall Field's argument that the Marshall Field shareholders are irreparably harmed by the discouragement of prospective white knights if further buying is not enjoined. It is arguable that the Field shareholder would be equally harmed if the principal existing bidder for their shares were barred from making further offers. Furthermore, if the Icahn group were barred, management might well lose its urgency in seeking competing bidders. It is far from clear that such an injunction would benefit the existing shareholders.

 I conclude there is no basis for granting the order now sought to restrain further purchases by the Icahn group.

 The argument is also advanced that failure to grant relief permits Icahn to benefit from his violation of law by permitting him to use, for blocking purposes, the large number of shares which were acquired under the allegedly fraudulent misleading 13-D statement. It is true that the further discovery called to my attention tends to confirm the accuracy of my earlier judgment that the initial 13-D was deficient.

 If this is so, it may well be appropriate in time to grant relief which bars the Icahn group from voting the shares acquired under the allegedly misleading 13-D. They may also be subject to suits for damages or rescission brought by uninformed or misled sellers. Additionally it is possible that they may face regulatory action if it should be found that the disclosures were intentionally misleading.

 These possibilities do not, however, support the conclusion that further buying by the Icahn group should now be enjoined.

 For the reasons stated above, the temporary restraining order is hereby denied.


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