Opinion ID: 408092
Heading Depth: 2
Heading Rank: 1

Heading: Tender Offer

Text: 3 The facts, though lengthy, are not in dispute. National is a Delaware corporation engaged in the businesses of trucking, truck terminal leasing, and energy and real estate developments. LLC is a Delaware corporation with subsidiaries engaged in the businesses of convenience food, credit insurance and finance. 4 One of its subsidiaries, Personal Life Insurance Company (Personal), is organized and operated under the insurance laws of Missouri. 5 4 On September 8, 1981, National announced its intention to make a cash tender offer for any or all shares of LLC common stock. On that same day, National filed a complaint in federal district court seeking to invalidate and enjoin enforcement of several provisions of the Missouri Takeover Act on the basis that they violated the Supremacy and Commerce Clauses of the Constitution. 5 A hearing was held on September 9, 1981, before Judge Elmo B. Hunter. Judge Hunter indicated his intention to transfer the case to Judge Scott O. Wright and deferred issuing a temporary restraining order after securing the parties' commitment to maintain the status quo. The hearing before Judge Wright was set for September 11, 1981. 6 On September 10, 1981, the General Counsel of Missouri's Division of Insurance advised National that he believed the Insurance Act was applicable to the tender offer because LLC held securities of Personal, a domestic insurer. 7 On September 11, 1981, Personal filed a complaint in state court based on the Insurance Act. Judge Byron Kinder issued an ex parte temporary restraining order forbidding National from completing its tender offer until it complied with the Insurance Act. A hearing on a preliminary injunction was set for September 24, 1981. 8 Also on September 11, 1981, National filed an amended complaint in federal district court seeking to invalidate and enjoin enforcement of specific provisions of the Insurance Act for the same reasons it alleged in its challenge to the Takeover Act. The district court entered a temporary restraining order (TRO) declaring the Takeover and Insurance Acts unconstitutional as applied to National's tender offer and temporarily restraining LLC, the state's securities director and insurance commissioner from enforcing either Act against National. A hearing on the preliminary injunction was set for September 29, 1981. 9 On September 14, 1981, National commenced its tender offer by filing a Schedule 14D-1 with the Securities and Exchange Commission (SEC) pursuant to § 14(d)(1) of the Williams Act and Regulation 14D promulgated thereunder. The offer was scheduled to expire on October 9, 1981. 10 On September 28, 1981, the state court granted LLC's motion for a preliminary injunction and enjoined National from purchasing tendered shares until it complied with the Insurance Act. The court limited its order by inserting, except to the extent that such relief is precluded by a then presently outstanding order of either the United States District Court ..., the Eighth Circuit or the United States Supreme Court. Personal Life Insurance Co. v. National City Lines, Inc., No. CV181-734CC (Mo.Cir.Ct. Sept. 28, 1981), slip op. at 5. The court also expressly abstained from considering National's constitutional challenges to the Act. Id. 11 On September 30, 1981, the district court granted National's motion for a preliminary injunction declaring that the challenged provisions of the state acts conflicted with and were preempted by the Williams Act. The court, however, stayed National's right to commence purchasing tendered shares until midnight October 6, 1981. National City Lines, Inc. v. LLC Corp., 524 F.Supp. 906 (W.D.Mo.1981). 12 On October 9, 1981, this court denied LLC's request for a continuance of the district court's stay pending appeal, thereby permitting National to purchase tendered shares. However, we enjoined National's voting of those shares pending appeal. We also enjoined LLC from disposing of any corporate assets other than in the ordinary course of business pending appeal. National City Lines, Inc. v. LLC Corp., No. 81-2044 (8th Cir. Oct. 9, 1981). 13 National subsequently extended its tender offer until October 23, 1981, at which time it announced that the offer had not been successful. The record does not indicate whether National intends to make another tender offer for LLC's shares. Nevertheless, National faces both criminal and civil liability under state laws for making its September 14, 1981, offer without first complying with the Takeover Act, Mo.Rev.Stat. §§ 409.540, 409.545, and the Insurance Act, Mo.Rev.Stat. §§ 382.270, 382.290. Therefore, the issues relating to National's tender offer are not moot.