Opinion ID: 588840
Heading Depth: 3
Heading Rank: 3

Heading: Howing II: The Second Appeal to the Sixth Circuit

Text: 18 After the district court's second judgment in favor of the Nationwide Defendants, the Plaintiffs again appealed to this court. See Howing Co. v. Nationwide Corp., 927 F.2d 263 (6th Cir.1991) (hereinafter Howing II). We first considered the district court's conclusion that the omission of the disclosures required by Rule 13e-3 did not meet the TSC standard of materiality. Agreeing with the district court that the TSC standard of materiality applied to Rule 13e-3 transactions, we held that: 19 the clear and specific language of the instructions to Item 8 creates in effect a presumption that a discussion of book, going concern and liquidation value in the proxy statement would be material to a reasonable shareholder. The presumed fact--that the investor would likely find disclosure of such information significant--follows from Item 8's insistence that the information be stated. 20 Howing II, 927 F.2d at 265. We then held that the Defendants had not rebutted this presumption, and therefore, we reversed the district court's grant of summary judgment in their favor. 21 Additionally, we considered the Plaintiffs' state-law breach-of-fiduciary-duty claims. We first held that the only arguable Ohio-law claim is against Nationwide Mutual in its capacity as majority shareholder of Nationwide Corporation. 2 We next noted that, under Ohio law, although a majority shareholder may have a right to cash out the minority shareholders for any reason, the majority shareholder has a fiduciary duty to pay a fair price and fully disclose all relevant facts about the value of the corporation whose stock it is buying. The Defendants' failure to disclose all relevant information regarding valuation, we held, supports a state-law breach-of-fiduciary-duty claim against Nationwide Mutual. We, therefore, also reversed the district court's grant of summary judgment for the Defendants on the state-law breach-of-fiduciary-duty claim. We remanded the case to the district court for trial of both claims. 22