Opinion ID: 437628
Heading Depth: 2
Heading Rank: 2

Heading: Issuance Price of Voting Stock

Text: 25 The proxy statement revealed that the non-voting shares had originally been issued for $5.00 per share, but did not disclose that the issuance price of the voting shares had been $2.50 per share. Appellants argue that the issuance price of the voting shares was material in light of the fact that Sullivan subsequently purchased the voting stock at prices in excess of $100 per share, while he offered only $15.00 per share for the nonvoting stock. In support of this argument, appellants point to an internal memorandum from Sullivan's attorneys asking that the aggregate initial prices paid for the different classes of stock be deleted from the draft of the proxy statement because Sullivan was concerned about disclosing the gain made by the voting stockholders. The district court's finding that [b]oth classes of shares were originally issued for $5.00 a share is clearly erroneous. We remand to the district court to consider whether the issuance price of the voting shares was material and should have been disclosed in the proxy statement.