Fed. Sec. L. Rep. P 98,745 Joseph D. Feldman, on Behalf of Himself and All Others Similarly Situated v. Simkins Industries, Inc.

This is an appeal from the dismissal by summary judgment and directed verdict against Plaintiffs’ claims that Defendant violated federal and state securities laws. We affirm.

FACTS

Between 1974 and 1977 Simkins Industries, Inc. (Simkins) acquired Fibreboard Corporation (Fibreboard) stock representing 14% of Fibreboard’s outstanding shares. It paid an average price of approximately $15.25 per share. By late 1977, however, Simkins had become dissatisfied with its investment in Fibreboard. Fibreboard appeared to Simkins to be poorly managed; its stock was trading at low market prices; and the company often failed to pay dividends. Moreover, the relationship between Leon Simkins, the president of Simkins Industries, and Fibreboard management had become one of open hostility. Simkins had been denied a seat on the Fibreboard board of directors, and his suits against the company’s management had been widely-publicized.

During late 1977 and early 1978, rumors began circulating in the financial community that Fibreboard was a merger candidate.

On January 26, 1978, without Leon Simkins’ knowledge or participation, Fibreboard and Louisiana-Pacific Corporation (L-P) prepared and…