Winning Cases
Lennon, et al. v. CS First Boston Corporation
Partners of the firm won an award of approximately five million dollars for several doctors
who claimed that a major investment banking firm issued a misleading "fairness
opinion" in connection with the merger of two medical companies, one of whose shares
the doctors owned. The investment banking firm rendered a formal opinion that the proposed
merger was fair to shareholders, including the doctors represented by Page Gard Smiley
& Bishop. However, immediately following the merger, the price of the resulting
company's stock dropped by 50% on news that operating results would be much lower than
projected. The Claimants in this NYSE arbitration contended that the investment bankers
violated Section 11 of the Securities Act of 1933 by failing to disclose information about
the anticipated revenue shortfall and its probable impact on the merged company's share
price. The NYSE arbitration award, the first of its kind,
drew immediate attention in the investment banking community and was the subject of an
article in the August 25, 1995 Wall Street Journal, "Big Board Panel Orders CS First
Boston To Pay $5 Million Over Fairness Report." In their award, a panel of New York
Stock Exchange arbitrators ordered First Boston to pay damages of $4,474,197.00, as well
as $500,000.00 in attorney's fees and costs.
Return to
Winning Cases
|
