The opinion of the court was delivered by: SWEET
Defendants Magten Asset Management Corp. ("Magten"), Talton R. Embry ("Embry"), General Motors Hourly Rate Employees Pension Plan, General Motors Retirement Program for Salaried Employees, L.A. Fire & Police Pension Systems-Fund 2525, Western Union Pension Trust, The Bakal Company, The Core Investment Limited Partnership, Levi Family Trust, H. Allen Luray, Pearlstone 54 Trust, Ellen's Trust U/W J.H. Pearlstone, and Jennifer Russell (collectively, the "Magten Defendants," and excluding Magten and Embry, the "Magten Advisory Clients" or the "Clients") have moved for summary judgment pursuant to Fed. R. Civ. P. 56 to dismiss this action. For the reasons set forth below, the motion is granted.
Plaintiff Margaret Gwozdzinsky ("Gwozdzinsky") is a Pennsylvania resident who is the owner of common stock of Revco D.S., Inc. ("Revco"). She is bringing this suit as a derivative action on behalf of Revco under section 16(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. § 78p(b), to recover "short-swing" insider profits earned as a result of purchases and sales of the common stock of Revco.
Defendant Magten is a New York corporation which is a registered investment advisor with its principal place of business at 35 East 21 Street, New York, New York.
Embry is Magten's sole officer and director and is a registered investment advisor. The Amended Complaint in this action states that he is the chairman of Revco's board of directors.
The remaining defendants are alleged to be investment advisory clients of Magten and Embry who bought and sold stock in Revco as described below.
The original complaint in this action was filed on April 28, 1995, naming Magten, Embry and John Does 1-20. Limited discovery proceeded and the amended complaint (the "Complaint") was filed on September 11, 1995 which added allegations and named the John Doe defendants.
The present motion was filed on October 23, 1995. Oral argument was heard on December 6, 1995 and the motion was considered fully submitted at that time.
On March 14, 1994, Magten and Embry filed Amendment No. 7 to schedule 13D, reporting a collective beneficial ownership of 7,409,137 shares of Revco common stock which represented approximately 14.8% of the approximately 50,530,000 shares of the common stock of Revco believed to be outstanding on January 31, 1994. Of this ...