Opinion ID: 515453
Heading Depth: 2
Heading Rank: 3

Heading: Matters for Consideration in the Remanded Proceeding

Text: 69 Because we hold that Polaroid does not have standing to raise a claim under the All Holders Rule, we do not determine the merits of the district court's denial of Polaroid's motion for a preliminary injunction on this issue. The All Holders issue is, however, unlikely to disappear from this case for long. The case will perforce return to the district court for further proceedings, and since the Polaroid ESOP, as a shareholder of the target corporation, has standing to raise an All Holders claim, see discussion supra, at 997, and since it may well have not done so on the assumption that Polaroid's litigation would vindicate its interest, it seems likely that the Polaroid ESOP (or an ESOP shareholder with a vested right) may seek leave to intervene as a party plaintiff asserting a violation of the Rule as a basis to enjoin Shamrock's tender offer. We thus believe that it will be useful to make several observations for the benefit of the district court that bear upon the contention that Shamrock's tender offer violates the All Holders Rule. 70 The district court held that the particular facts of this case allow Shamrock to exclude the Polaroid ESOP shares from its tender offer. 698 F. Supp. at 1174. The particular circumstances to which the district court was referring are the litigation in the Delaware Chancery Court and the stated intention to amend the Offer. This strikes us as a frail reed upon which to rest a decision. Particularly in view of the strength of Polaroid's All Holders Rule violation claim, the district court's exception would swallow the rule. 12 71 For Polaroid to obtain a preliminary injunction, it must show that it will be irreparably injured pendente lite if the preliminary injunction is not granted. 13 But as we have explained supra, at 997, if Shamrock completes the tender offer and the ESOP shares were subsequently declared valid, the owners of these shares would be able to sue (presumably through the ESOP trustee) for money damages arising out of their exclusion from the tender offer. The district court would thus have to consider, even assuming a violation of the All Holders Rule, why legal relief for damages would not be an adequate remedy at law barring injunctive relief. Polaroid intimates that a suit for damages will be inadequate because the damages will be so high that Shamrock and any other defendants in such a suit will not be able to satisfy the judgment. It will have to prove this point. Its assertion that the damages would be in excess of $480 million plus interest, a figure which it arrives at by multiplying the number of ESOP shares by $42 per share, would seem inaccurate, as it assumes that but for a Shamrock tender offer for $42 per share for the ESOP shares, the ESOP shares are worth $0 per share. 72 Polaroid also argues that a damage remedy would be inadequate because Shamrock, if it amends its tender offer to include the Polaroid ESOP shares, might choose to keep the offer open for only ten days, in accordance with the Rule 14e-1(b) minimum, rather than the twenty days that Rule 14e-1(a) requires for initial tender offers. 17 C.F.R. Sec. 240.14e-1. If the point is engaged, the district court should consider whether an extra ten days would be of sufficient utility to the ESOP shareholders in this case to justify an injunction, since the ESOP shareholders, as employees of Polaroid, have undoubtedly been following the progress of Shamrock's bid with close scrutiny. The district court should also consider whether the contingency that Shamrock may amend its tender offer to include the ESOP shares (and then keep the offer open for fewer than twenty days) is too speculative to support the grant of equitable relief. 14