Jacobson

Plaintiffs James Jacobson and Arthur Fury (Jacobson and Fury), shareholders of Siliconix, Inc., appeal the district court’s dis- ■ missal of their securities fraud action which alleged that AEG Capital Corporation (AEG) and two AEG directors had violated section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. § 78j(b)). Jacobson and Fury allege that AEG used Siliconix’s Chapter 11 reorganization to fraudulently divest the ownership interests of non-AEG shareholders of Siliconix. We affirm the district court’s dismissal as a valid entry of summary judgment in favor of AEG and its directors.

*1495 I. FACTUAL AND PROCEDURAL BACKGROUND

Siliconix manufactures semiconductors. In the late 1980s a burdensome combination of large capital expenditures, increased competition, and decreasing government contracts narrowed Siliconix’s profit margins. In 1989 Siliconix suffered a $28 million loss.

One of Siliconix’s large capital expenditures was an expansion in 1984 into the production of circuits known as Power MOS-FETs. Power MOSFETs became an important part of Siliconix’s product line. In 1986 International Rectifier Corporation (IR) sued Siliconix for willful patent infringement,…