The opinion of the court was delivered by: Laura Taylor Swain, United States District Judge
Plaintiff Norman Salsitz ("Plaintiff") alleges that defendants Nelson
Peltz ("Peltz"), Peter W. May ("May") and Triarc Companies, Inc.
("Triarc" or the "Company") (collectively, "Defendants") violated the
Williams Act, Section 14(e) of the Securities Exchange Act of 1934
("Section 14(e)"), 15 U.S.C. § 78t, 78n(e) in connection with
Triarc's March 1999 "Dutch Auction" self-tender solicitation. Plaintiff's
claims are asserted pursuant to Section 14(e) of the Securities Exchange
Act of 1934. Defendants move for summary judgment pursuant to Federal
Rule of Civil Procedure 56(b). The Court has considered thoroughly all
submissions and arguments related to the motion. Defendants' motion for
summary judgment is granted, for the reasons explained below.
Peltz and May withdrew their Going Private Offer on March 10, 1999,
stating "we believe it is not in the best interests of the shareholders
at this time." (Compl. ¶ 36). On that same day, Triarc announced
that it would commence a Dutch auction self-tender offer ("Dutch Auction"
or "Self Tender") to acquire up to 5.5 million shares of Triarc Class A
and Class B common stock from the public at a price between $16.25 and
$18.25 per share. Triarc also announced that WPC would serve as Triarc's
investment advisor and dealer/manager for the Self Tender. Triarc issued
disclosure materials in connection with the Dutch Auction on or about
March 12, 1999 and, following the March 23, 1999 commencement of this
litigation, supplemental materials on April 8, 1999. Plaintiff did not
tender his Triarc shares into the Dutch Auction and did not rely on the
allegedly deficient disclosure materials in reaching his decision not to
tender. Plaintiff's relative equity interest in Triarc increased as a
result of the Dutch Auction, and the value of his Triarc stock has
increased since the Dutch Auction.
Defendants assert that Plaintiff cannot satisfy any of the elements of
a claim under Section 14(e), and that Defendants are therefore entitled
to summary judgement. Defendants argue that Plaintiff has not identified
any material fact that Triarc did not disclose and that, as a matter of
law under both applicable SEC regulations and relevant jurisprudence,
Triarc was not required to disclose any internal opinions relating to the
value of Triarc's stock. Defendants further contend that Plaintiff has
not adduced any evidence that Defendants had any intent to deceive.
Finally, Defendants argue that Plaintiff cannot show detrimental reliance
on any alleged non-disclosure because Plaintiff did not tender any of his
stock in the Dutch auction.
Plaintiff argues that numerous facts were omitted from the disclosure
documents in question and that the materiality of the omissions must be
decided by a finder of fact. The allegedly material omitted facts include
information regarding (i) the reasons Peltz and May withdrew the Offer,
(ii) Cowen's analysis of Triarc's value as a stand alone company, (iii)
Cowen's analysis of Triarc's internal financial data, (iv) a statement by
WPC to Triarc's Board of Directors that quick implementation of the Dutch
Auction would permit Triarc to obtain shares from the public at
then-current undervalued prices, (v) WPC's compensation for its work on
the Going Private Offer, (vi) the meaning and basis of a statement
contained in Triarc's supplemental disclosure, that the members of the
Special Committee believed the value of the Triarc stock was "in the low
mid twenties," and (vii) identification of "large shareholders" who
allegedly suggested that Triarc conduct the Dutch Auction. Plaintiff
further contends that intent to deceive can be inferred from Defendants'
alleged motive to increase their control of Triarc through self-tender
transactions, and that he was damaged by the alleged misstatements and
omissions by being forced to make a decision as to the Dutch Auction in
the absence of complete and accurate information.
Summary Judgment Standard
Summary judgment is to be granted in favor of a moving party where the
"pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled to
judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears
the burden of establishing the absence of any genuine issue of material
fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). The
non-moving party then must meet a burden of coming forward with "specific
facts showing that there is a genuine issue for trial," Fed.R. Civ. P.
56(e), by "a showing sufficient to establish the existence of [every]
element essential to that party's case, and on which that party will bear
the burden of proof at trial." Celotex Corp., v. Catrett, 477 U.S. 317,
322 (1986); see also Western World Ins. Co. v. Stack Oil, Inc.,
922 F.2d 118, 121 (2d Cir. 1990), quoting Fed.R.Civ.P. 56(e); National
Union Fire Ins. Co. v. Turtur, 892 F.2d 199, 203 (2d Cir. 1989). A court
faced with a summary judgment motion does not make credibility
determinations or weigh the evidence; all inferences must be construed in
a light most favorable to the nonmoving party. Anderson, 477 U.S. at
255; see Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150
(2000); Carlton v. Mystic Transportation Inc., 202 F.3d 129, 133 (2d
Cir. 2000). If there is evidence in the record as to any material fact
from which an inference could be drawn in favor of the non-movant,
summary judgment is inappropriate. Rattner v. Netburn, 930 F.2d 204, 209
(2d Cir. 1991). "Conclusory allegations, conjecture and speculation" will
not, however, create a genuine issue of fact. Kerzer v. Kingly
Manufacturing, 156 F.3d 396, 400 (2d Cir. 1998).
Section 14(e) prohibits the making of untrue or misleading statements
of material fact and the omission of material facts in connection with
any tender offer. See 15 U.S.C.A. § 78n(e) (West 1997). In order to
prevail on a claim under Section 14(e), a plaintiff must prove the
following elements: (i) a misrepresentation or omission of material
fact; (ii) the requisite intent to deceive; and (iii) detrimental
shareholder reliance. In re PHL Corp. Securities Tender Offer
Litigation, 700 F. Supp. 1265, 1268 (S.D.N.Y. 1998) (citing Chris-Craft
Indus., Inc. v. Piper Aircraft Corp., 480 F.2d 341, 362-63 (2d Cir.),
cert. denied, 414 U.S. 910 (1973)).
The undisputed facts show that Plaintiff cannot establish the reliance
element of his Section 14(e) claim. Summary judgment in favor ...