Opinion ID: 478360
Heading Depth: 2
Heading Rank: 6

Heading: The District Court's Decision in Mayer III

Text: 36 Upon the parties' cross-motions for summary judgment, the district court reviewed these undisputed facts and dismissed the complaint. It found that by October 12, 1981, three days prior to the consummation of the transaction, Mayer had knowledge of each of the facts which the complaint alleges to have been concealed. Mayer III, 611 F.Supp. at 640. With respect to the misstatement in OFS's May 7 Letter that Bache was underwriting the Integrated shares and the prediction that the share price would zestily rebound, the court found (a) that in light of the statements in the Prospectus and Prospectus Supplement and subsequent OFS letters, which Mayer acknowledged having read, Mayer knew that Bache was acting as dealer manager and that the $10 price was arbitrary and might bear no relationship to the ultimate value of the shares, and (b) that OFS' zestily rebound prediction was not made with an intent to defraud. See id. at 641. Finding no deception by defendants, and finding actual knowledge by Mayer of each of the facts alleged to have been withheld from the Prospectus and Prospectus Supplement, the court held that Mayer had no valid claim under either the 1933 Act or the 1934 Act. Id. 37 The court noted that OFS's use of the $10 figure to determine payout appeared to violate both the partnership agreements and OFS's fiduciary duty to the limited partners, but it declined to exercise pendent jurisdiction to decide these state law claims. Id. 38 Mayer moved for reconsideration, arguing that her knowledge of all the material facts on October 12 was irrelevant because the reconfirmation of tender by OFS on September 22 had eliminated any right she had to seek an injunction against consummation of the exchange. The court denied the motion, finding that Mayer's state remedies did not become unavailable until the closing of the transaction which could not have occurred before the October 15 cutoff date for reconfirmations ... and did not actually occur until November 10, 1981. Mayer IV, 620 F.Supp. at 77. 39 Judgment was entered dismissing the complaint, and this appeal followed.