Griggs v. Pace American Group, Inc.

In this case, we examine the issue of whether a former shareholder who exchanges his stock for contingent rights to receive stock, has standing to sue as a purchaser of stock for purposes of § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Exercising our jurisdiction under 28 U.S.C. § 1291 , we determine that standing does exist under such circumstances. We therefore reverse the decision of the district court and remand the ease for further pro- . ceedings.

Factual and Procedural Background

Plaintiff-appellant H. James Griggs (“Griggs”) appeals the district court’s grant of the motion for summary judgment made by defendant-appellee Coopers & Lybrand, L.L.P. (“Coopers”), and the court’s denial of his own motions, one for leave to file a third amended complaint, the other for reconsideration. These motions all relate to a putative class action securities fraud lawsuit, which Griggs brought on behalf of the class of persons who were former shareholders of Bancroft Holdings, Inc. (“BHI”), an insurance holding company that merged with Pace American Group, Inc. (“PAG”).

PAG acquired BHI on March 15, 1993, pursuant to a written merger agreement. As provided by that…