Opinion ID: 407618
Heading Depth: 1
Heading Rank: 3

Heading: Adequate Disclosure

Text: 16 Having determined that disclosure can cure the Williams Act violation diagnosed by the district court, the remaining issue is whether APC made adequate disclosure. Because the record and arguments on appeal do not enable us to make this determination, we remand for further consideration by the district court. 17 In addition to objecting to APC's handling of the bylaw, PacTrust presented a number of Williams Act claims which the district court did not reach. It sought the disclosure of (1) the poor financial condition of APC and related parties, (2) APC's past practice of acquiring corporations through tender offers failing to make material disclosures, and then selling the target corporation's assets to finance the offer, (3) conflicting financial interests that may cause APC to mismanage PacTrust, (4) the fact that APC's ownership is pledged to another corporation, and (5) the possible loss by PacTrust of its special tax status should the tender offer be successful. The supplemental disclosure proffered by APC does not address these allegations. The alleged facts appear to be material. See TSC Industries v. Northway, Inc., 426 U.S. 438, 449, 96 S.Ct. 2126, 2132, 48 L.Ed.2d 757 (1976) (measuring materiality by whether fact's disclosure would have been viewed by a reasonable investor as having significantly altered the 'total mix' of information made available). Because the record does not reveal whether the allegations are true, we must remand to allow the district court to make this determination. 18 Since a remand is necessary, we also instruct the district court to review and entertain objections to the supplemental disclosure about the possible effects of the bylaw that APC presented previously to the court. We have read the proposed supplement, and it seems to explain fairly what could happen if APC proceeds with the tender offer in the face of the bylaw. PacTrust may have suggestions that would improve the disclosure, however, which the district court can best evaluate.