Hatfield

BACKGROUND

Hatfield was a member of HBS, a United Kingdom-based building society. In January 1997, HBS sent a voting packet and a “Transfer Document” to its nine million existing mem- bers, including Hatfield, informing them that the building society was converting into a publicly traded company called Halifax. The Transfer Document provided that, if the conver- sion was approved, each “qualifying member” would receive free shares in Halifax. The Transfer Document also outlined the conditions for member qualification, including the requirement that a member needed to have a registered address1 in the United Kingdom or a “permitted territory.” The United States was not considered a “permitted territory.”2 Approxi- mately 8,000 members, including Hatfield, who resided in Santa Barbara, California, had registered addresses in the United States, which disqualified them from receiving the free Halifax shares. On February 24, 1997, a majority of HBS members, including Hatfield, voted in favor of the conver- sion. The conversion then took place on June 2, 1997, at which point the qualified members’ rights to the free shares vested. The disqualified members received no shares.

On June…