Full opinion text
MEMORANDUM OF OPINION MANOS, District Judge. On April 5,1982 plaintiffs, Hanna Mining Company, (hereinafter, Hanna), Carl E. Nickels, Jr., Executive Vice President and a member of Hanna’s Board of Directors and John Gurgle, an employee of Hanna and former beneficial., owner of seventy (70) shares of Hanna stock, filed the above-captioned case to enjoin a proposed tender offer by the defendant, Norcen Energy Resources Limited, (hereinafter, Norcen), for fifty-one (51) percent of Hanna’s issued and outstanding common stock because Norcen and defendants, Conrad M. Black, Chairman of Norcen’s Board of Directors and a controlling shareholder, his brother, G. Montegu Black, a member of Norcen’s Board of Directors and a controlling shareholder, Edward G. Battle, Norcen’s President and Chief Executive Officer and Lehman Brothers Kuhn Loeb Inc., (hereinafter, Lehman Brothers), an investment banker hired by Norcen, committed acts in violation of sections 10(b), 13(d), 14(e) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78j(b), 78m(d), 78n(e) and 78t(a); Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5 and OHIO REY.CODE ANN. § 1707.041(B)(2) (Page 1979). On April 12, 1982 the plaintiffs filed an amended complaint adding William T. Kilbourne, Norcen’s Vice President of Administration and Secretary, as a defendant and alleging also that the defendants’ conduct violated Title IX of the Organized Crime Control Act of 1970, commonly known as the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968, (hereinafter, RICO), and the Hart-Scott-Rodino Antitrust Improvements Act, 15 U.S.C. § 18a. Jurisdiction is invoked under 15 U.S.C. § 78aa and 18 U.S.C. § 1964(c). On April 20,1982 the claims against Lehman Brothers were dismissed without prejudice by stipulation. The case is currently before this court on the plaintiffs’ motion for a preliminary injunction on their federal securities claims. On the motion the parties rely on affidavits, depositions and on facts developed at an evidentiary hearing. Hanna is a Delaware corporation with its executive offices located in Cleveland, Ohio. It considers itself as a “leading independent natural resources company involved in ferrous and non-ferrous minerals and metals as well as energy resources such as oil, natural gas and coal.” It is engaged in substantial iron ore mining activities and is the only integrated nickel producer in the United States. Its business activities and customers are located in the United States, Canada, Latin America, Western Europe and Japan. Its securities are registered under section 12 of the Securities Exchange Act of 1934,15 U.S.C. § 78 l and are traded on the New York Stock Exchange. As of December 31, 1981 Hanna had 8,945,050 shares of common stock issued and outstanding which were owned by approximately 4,390 shareholders. Norcen is a Canadian corporation with its executive offices located in Toronto, Ontario. Its primary business is “exploration, development and production of oil and natural gas, principally in Canada and distribution of natural gas in Ontario and Manitoba.” “Norcen is one of the larger Canadian owned and controlled companies operating in the oil and gas exploration and produetion operations of Canada.” Similar to Hanna, Noreen’s securities are registered under section 12 of the Securities Exchange Act of 1934. They are traded on the Toronto and Montreal Stock Exchanges. As of March 31, 1982 Norcen had 26,544,886 shares of common stock issued and outstanding. Carl E. Nickels, Jr., is Executive Vice President and a member of Hanna’s Board of Directors. He has been employed by Hanna since February, 1953 and is a record and beneficial owner of 2,875 shares of Hanna stock. Nickels is a party to this action in his capacity as a Hanna shareholder. John Gurgle is employed by Hanna as a cash manager. On November 13, 1981 he sold thirty-four (34) shares of Hanna stock. On March 29, 1982 he sold thirty-six (36) additional shares. He remains a beneficial owner of other shares. Gurgle is a party to this action in his capacity as a former and current Hanna Shareholder. Conrad M. Black is a Canadian citizen. He is Chairman of Norcen’s Board of Directors and Executive Committee and is a “controlling person” for the purposes of section 20(a) of the Securities Exchange Act of 1934. 15 U.S.C. § 78t(a). In 1967 Black began his business career by purchasing a rural newspaper that was nearly bankrupt. Within two years he purchased two others. These properties prospered and subsequently Black and his associates owned or controlled “a series of other newspapers — dailies, weeklies and bi-weeklies — in Canada, mainly British Columbia and the West Coast, adding up to a total of about 20 newspapers.” Tr., p. 528. During this period, Black, joined by his brother, also invested in a malting company, a securities brokerage firm, “now the largest securities dealer in Canada” and a number of real estate ventures.” Tr., pp. 528, 529. Currently, in addition to his controlling interest in Norcen, Black, directly or indirectly, owns or controls the following companies: (1) 75% of Western Dominion Investment Company Limited; (2) 51% of The Ravelston Corporation Limited; (3) 64% of Argus Corporation Limited, all of which are Canadian investment companies; (4) 49% of Standard Broadcasting Corporation, a Canadian radio and television broadcasting company; (5) 52% of Dominion Stores Limited, a Canadian food merchandising company; (6) 93% of Hollinger Argus Limited, a Canadian mining and investment company; and (7) 67% of Labrador Mining and Exploration Company Limited, a Canadian mining and natural resources exploration company. Tr., pp. 263-267. From 1978 through 1980 Black was a director and Chief Executive Officer of Massey-Ferguson Company, “the only great Canadian manufacturing company.” Presently, he is a director on the boards of a large number of corporations, including but not limited to: (1) Canadian Imperial Bank and Commerce; (2) Eaton’s of Canada Limited; (3) Confederation Life Insurance Company; and (4) Carling O’Keefe Limited. Tr., pp. 530, 269. Although it is apparent that Black is extremely sophisticated in the realm of internal corporate affairs, the essence of his investment philosophy is quite simple — avoid token investments and token control. Tr., pp. 269, 270. G. Montegu Black is a Canadian citizen. He is a member of Norcen’s Board of Directors and of its Executive Committee. He is also President, Chief Executive Officer and a member of the Executive Committee of Argus Corporation Limited; Chairman of the Boards of Directors and member of the Executive Committees of both Standard Broadcasting Corporation and Dominion Stores Limited; Director, President and member of the Executive Committee of Hollinger Argus Limited; and Director, Executive Vice President and member of the Executive Committee of Labrador Mining and Exploration Company Limited. Edward G. Battle is a Canadian citizen. He is a petroleum engineer and has been employed by Norcen and its predecessor since 1957. Currently, he is a Director, member of the Executive Committee and Norcen’s President and Chief Executive Officer. He is also a Director of Labrador Mining and Exploration Company Limited. William T. Kilbourne is an American citizen. He is an attorney, admitted to practice in the United States and has been employed by Norcen and its predecessor since 1972. Currently, he is Norcen’s Vice President of Administration, Secretary and senior legal officer. He has responsibility for all of Norcen’s administrative, legal, human relations and record keeping functions. Tr., pp. 764-768. The parties to this suit are not strangers to one another. Indeed, they currently maintain the following business relationships: (1) Hanna owns 20% of Labrador Mining and Exploration Company Limited; (2) Hanna, 60% and Hollinger Argus Limited, 40%, are partners in Hollinger North Shore Exploration, Inc., a Canadian mining and energy resources company and equal partners in Hollinger Hanna Limited, a Canadian management company; and (3) Hanna, Hollinger Argus Limited and Labrador Mining and Exploration Company Limited are all shareholders of Iron Ore Company of Canada, an iron ore mining company. Because of these relationships, representatives of Hanna and the Blacks sit on some of the same boards of directors. For example, Robert F. Anderson, a Director and Hanna’s President and Chief Executive Officer, Brian Mulroney, a member of Hanna’s Board of Directors and President of Iron Ore Company of Canada and Nickels, along with the Blacks and Battle, are Directors of Labrador Mining and Exploration Company Limited. Another relationship important to this suit is between Hanna and the “Humphrey family.” Until his death in June, 1979, Gilbert W. “Bud” Humphrey, Sr., was Hanna’s President and Chief Executive Officer. He was also a substantial shareholder. His widow, Louise Humphrey, remains a substantial shareholder, having acquired shares not only from her late husband but also from her father. Her brother, R.L. Ireland, III, a member of Hanna’s Board of Directors, is also a substantial shareholder as are her two sons, George M. Humphrey, II, a Director and Hanna’s Senior Vice President of Sales and Gilbert W. Humphrey, Jr., Vice President of Marketing and Sales of National Steel Corporation. Conrad Black first expressed an interest in investing in Hanna during a conversation with Gilbert W. “Bud” Humphrey, Sr., in January, 1979. Black testified that he informed Humphrey “that when we [the Blacks] got our corporate house in order and finished the restructuring of our group, it was certainly my ambition and that of my associates to have a little more presence in the United States.” Tr., p. 563. Soon thereafter, Humphrey died. Undeterred, Black pursued his investment “ambition” in 1980 during a series of conversations that he initiated with George M. Humphrey, II. On June 27, 1980 the first of these conversations occurred when Black appeared at Humphrey’s office at Hanna headquarters. On that date Humphrey was Hanna’s Vice President of Sales but not a member of its board of directors. Regarding the nature of the conversation, Humphrey testified that “[w]hat I recall was [Black] coming into my office and saying that he had noticed that it appeared to him that both me as an individual and my family had been shunted out of the mainstream as far as the management of the Hanna Mining Company was concerned, and he wondered how I felt about that.” Tr., p. 1111. Humphrey responded that he (Humphrey) “did have a deep concern about where my position was in Hanna and where Hanna was going.” Tr., p. 1132. Black expressed confidence in Hanna’s management, inquired about the extent of the Humphrey family’s stock holdings in Hanna and indicated a desire to discuss “some ideas” with Humphrey at some future date. The meeting ended when Humphrey informed Black that he (Humphrey) “would be available to have such discussion.” Id. In August, 1980 Black solicited a second meeting with Humphrey which was held at Humphrey’s home in Gates Mills, Ohio. At this meeting Black indicated that he had an interest in Hanna as a “vehicle” for expanding his interests in the United States because “he wanted to diversify the geographical basis of his assets ... [and] bring money into the United States.” Tr., p. 1140. Humphrey testified that Black also “said that Hanna Mining looked to be an interesting vehicle ... [because] we had been partners or our predecessors had been partners over a long period of time.” Id. Humphrey further testified that Black seemed “enamored” with the prestige “that the Hanna name represented and he mentioned specifically the value of our contacts with Bechtel and the Mellon family.” Id. During the course of this discussion Black also referred to the potential effects his proposed investment would have on the Iron Ore Company of Canada. Humphrey testified that “Conrad ... seemed to have a scheme that he could use the earnings of the Iron Ore Company of Canada to better advantage than the owners themselves ... because he could somehow shelter them in drilling out in Western Canada for oil and gas.” Tr., p. 1116. According to Humphrey, Black also noted that his proposed investment would enhance his image in Canada because “he could, in effect, be seen as repatriating ... some of Iron Ore of Canada’s shares.” Id. After Humphrey was apprised of the reasons for Black’s proposed investment in Hanna, Black mentioned the possibility of a voting trust or some other form of alliance between his investment and the Humphrey family’s interests. Humphrey testified that Black also indicated “that if I or any member of my family had any shares that we wanted to sell, dispose of, he would be a buyer.” Tr., p. 1115. Humphrey did not respond to any of Black’s proposals. Regarding his lack of response, Humphrey testified that ... “[n]one was called for.” Id. “He [Black] was not saying anything but the kindest words about management and about the company.” Id. The meeting terminated without any specific proposals. According to Humphrey, it had been “a very broad-gauged discussion, very little in the way of specifics,” with Black emphasizing “that any ... involvement would only be ... on a friendly basis ____” Tr., pp. 1113, 1115. On May 7, 1981 Black and his brother solicited a private meeting with Humphrey following the annual meeting of Labrador Mining and Exploration Company Limited, which Humphrey attended in his capacity as a Hanna officer. During this meeting, Conrad Black again raised the possibility of an investment in Hanna and “again advised right up front that he would only seek involvement with Hanna Mining Company on an entirely friendly basis.” Tr., p. 1118. As in their earlier meeting, “[h]e was very complimentary to Hanna Mining Company’s management.” Id. Similarly, the meeting ended without any specific proposals. On August 15, 1981 Conrad Black telephoned Humphrey at his vacation home in Maine. At that time Humphrey had become a member of Hanna’s Board of Directors. Black testified “... I told him that we were contemplating now in [sic] a somewhat imminent basis the thought of buying some Hanna shares, and reemphasized that our wishes were entirely friendly, both to the management of the company and to his family____” Tr., pp. 574, 575. Humphrey recalled that Black “started out by saying his interest in Hanna was keener than ever and he was ready to do something.” Tr., pp. 1119, 1120. Humphrey testified that “[d]uring the course of the conversation he [Black] said once again what he had said to me back in August of 1980, namely, that he would be willing to buy shares if my family had any they would be willing to sell.” Tr., p. 1120. Although Humphrey informed Black, “[l]ook, let me have some time to think over what you are saying and I will get back to you as soon as I can,” Tr., p. 1122, he (Humphrey) expressed unequivocal loyalty to Hanna management and to the company. Thereafter, Humphrey discussed the matter with his uncle, R.L. Ireland, III. On August 17, 1981 Humphrey telephoned Black and informed him of his (Humphrey’s) position. Humphrey testified, “I reiterated I was now thoroughly satisfied with my position in the Hanna Mining Company and with the direction of top management ... that I was therefore a completely loyal member of the management and the Hanna Board of Directors and, if he wanted to do anything whatsoever on a friendly basis with Hanna Mining, he should deal with Bob Anderson and leave me completely out of it and I didn’t want anything more to do with it.” Tr., p. 1124. On August 18, 1981 Norcen began making open market purchases of Hanna stock. Battle testified that the short run purpose of these purchases was to acquire 4.9% of Hanna’s stock and that the ultimate purpose was to acquire 51% at a later date. On August 21, 1981 Battle authorized the Canadian Imperial Bank of Commerce to establish a 20 million dollar line of credit to enable Norcen to purchase 4.9% of Hanna’s stock. The account was exclusive of normal operating lines of credit extended to Norcen by the bank, maintained confidentially, (neither bank statements nor debit advices were delivered to Norcen’s offices) and was assigned a secret account number. Tr., pp. 325, 326. By September 9, 1981 Norcen had made eighteen (18) open market purchases of Hanna stock at prices ranging from $34.50 to $36.00 per share for a total of 58,000 shares. On September 9, 1981 the Executive Committee of Norcen’s Board of Directors met and discussed the Hanna stock acquisition program. The formal minutes of that meeting contain in pertinent part: U.S. Acquisition — Mr. Battle stated that the Company, subsequent to telephone contact with the members of the Executive Committee, had initiated through stock market transactions the acquisition of a 4.9% stock interest in a U.S. company listed on the New York Stock Exchange with the ultimate purpose of acquiring a 51% position at a later date. This strategy would achieve an important entry into the U.S. market and simultaneously broaden the Company’s operations and geographic locations. He then described the asset, book and market values of the target company and briefly summarized its current operations and the impact on Norcen’s structure and Canadian operations if the stock purchase program is successful. A discussion of the proposed acquisition then followed. The Executive Committee ratified the prior stock purchases and supported the proposed U.S. stock acquisition program. (Emphasis added). The “U.S. company” described in the minutes is Hanna. Tr., p. 786. When Battle was asked, “[s]o that to the best of your knowledge and recollection, at the meeting of September 9, 1981 there was a discussion and support by the executive committee for a program which would permit Norcen to eventually acquire a 51 percent position at a later date in Hanna, but there was no specific discussion of by what point in time you would achieve that position or the means and methods that you would use to achieve a 51 percent position in Hanna?”, he responded, “[t]hat would be my recollection, yes.” Battle’s answer was corroborated by Black’s testimony. Tr., pp. 305, 306, 309. Between September 9, 1981 and October 27, 1981 Norcen continued making open market purchases of Hanna stock so that by the latter date Norcen owned between 200.000 and 205,000 shares. On October 28, 1981 Black was offered and Norcen purchased, a block of 580,000 shares of Hanna at $37.00 per share for a total of $21,460,000. This purchase raised the total Norcen holdings of the outstanding Hanna stock to 8.8%. Although it is unquestioned that the purchase brought Norcen’s holdings above 4.9%, increased its net carrying cost of the investment to over 2.5 million dollars per year (assuming a purchase of 800.000 shares and subtracting Hanna's dividend of $2.00 per share from the debt service cost of $3.40 per share, Tr., p. 329) and required an increase in Norcen’s credit line from the Canadian Imperial Bank of Commerce, Black neither obtained authorization from Norcen’s Board of Directors nor its Executive Committee to make the purchase and the Executive Committee did not ratify the purchase after it was made. Tr., p. 814. The manner in which Black made the purchase establishes conclusively the extent of his personal control over Norcen’s internal affairs. When Battle was questioned regarding the relationship of the purchase to the stock acquisition program previously approved by Norcen’s Executive Committee, Battle responded that the purchase “was made as per the resolution at the executive committee meeting of September 9.” Following the purchase Black telephoned Anderson, who was out of the country. He then spoke to Nickels and informed him of Norcen’s stock purchases. Nickels testified that Black “wanted to immediately assure me that the stock was acquired by him, or by his company, Norcen, for investment purposes only, and that they had no ulterior motive whatsoever in making this purchase, and he was particularly keen ... that I call Mr. Robert Anderson and make sure Mr. Anderson understood that this was the case, because he was very concerned about what Mr. Anderson’s attitude might be.” Tr., pp. 37, 38. When asked whether he believed Black’s statement that Norcen had acquired the stock for investment only and with no ulterior motive, Nickels responded, “[y]es I did, because he [Black] went on to elaborate that he didn’t want to upset anyone by this investment ... [and] that if Hanna’s management or Hanna’s Board was upset with this and if they were going to go public with that feeling, he would find a way to back away____” Tr., p. 39. On November 3, 1981 Hanna’s Board of Directors convened to consider Norcen’s purchases of Hanna stock. Nickels testified that the directors “... took the position that [Black] was not someone that would be welcome into the Hanna Mining Company; that we could see a serious problem by having him as an investor, and that we should arrange for a meeting with Mr. Black and convey to him the unanimous view of the Board that [it was] against his investment and that [it] wanted him out.” Tr., p. 46. On November 4, 1981 Black and Battle met with Anderson and Nickels at the Sheraton Hopkins Hotel in Cleveland. At the outset of the meeting Black reaffirmed his earlier statement to Nickels that Norcen had purchased Hanna stock for investment purposes only. Tr., p. 49. Anderson and Nickels informed Black of Hanna’s opposition to Norcen’s purchases. Black testified that they also “expressed concern [over how Norcen’s purchases would affect] the relationship that they had with some joint venture partners____” Tr., p. 610. When Black was apprised of Hanna’s opposition to Norcen’s purchases he proposed a stock “swap.” Nickels testified that “[a]t one point during the meeting when the position of our Board was made completely clear to Mr. Black, he threw out some ideas, one of which was perhaps, and as he expressed it at that time, without any prior thought, perhaps Hanna might be interested in looking at a swap of Labrador Mining shares, where we hold a 20 percent position, in exchange for the shares they had acquired in the Hanna Mining Company.” Tr., p. 54. Anderson reacted negatively to this proposal and the meeting concluded when Black stated that he would “have to review his investment in light of these discussions____” Tr., p. 55. Norcen’s purchase of 580,000 shares of Hanna had an unquestioned impact on the market. On October 28, 1981, the date of the purchase, the price of Hanna stock rose $3.25 per share. From October 29, 1981 until November 9, 1981 Hanna stock traded between $35.50 and $39.25 per share at a volume averaging 110,000 shares per day, which was well above the normal volume. On November 6, 1981 Norcen announced its purchases of Hanna stock in the following press release: NORCEN PURCHASES INVESTMENT POSITION IN THE HANNA MINING COMPANY Norcen Energy Resources Limited purchased for investment 783,700 shares or approximately 8.8% of the outstanding common stock of The Hanna Mining Company through market purchases on the New York Stock Exchange. Norcen intends to review its investment position from time to time. Depending on such review, market and business conditions and other factors, Norcen may seek to acquire further shares of common stock or may sell shares of common stock. (Emphasis added). On November 9, 1981 Norcen filed a Schedule 13D pursuant to 15 U.S.C. § 78m(d), with the Securities and Exchange Commission, (hereinafter, SEC), regarding its purchases of Hanna stock. Item 4 of the Schedule, entitled “Purpose of the Transaction” provides as follows: Norcen’s purpose in purchasing the shares of Common Stock was to acquire an investment position in Hanna. Norcen intends to review its investment position from time to time. Depending on such review, market and business conditions and other factors, Norcen may seek to acquire further shares of Common Stock or may sell shares of Common Stock. (Emphasis added). Before filing, the Schedule was approved by Black, Battle and Kilbourne. Although the Schedule does not refer to the September 9, 1981 “resolution” of Norcen’s Executive Committee regarding acquisition of “a 51 percent position” in Hanna, when Battle was asked, “[n]ow at the time you signed [the Schedule] ... neither the executive committee of Norcen nor its board of directors had taken any action to revise the program with respect to the acquisition of a 51 percent interest in Hanna at a later date ... had they?”, he responded, “[n]o.” As Norcen’s senior legal officer Kilbourne was responsible for drafting and filing the Schedule 13D. Prior to November 9, 1981 he, with the aid of Norcen’s United States counsel, prepared several drafts. Comparing these with the Schedule that was filed reflects the removal of specific disclaimers by Norcen regarding any present “plan” or “intention” to acquire a “significant” investment position in Hanna, “to increase its investment on Hanna,” “to seek representation on Hanna’s Board of Directors” and/or “to seek control of Hanna.” Black testified that on advice of Norcen’s United States counsel that “... [the ‘Purpose of the Transaction’] section should reveal exactly what plans and purposes we had but that it should not reveal anything other than that ... ”, the section was written to be “as short and antiseptic as possible.” Tr., pp. 337, 338, 624. Following the filing of Norcen’s Schedule 13D with the SEC, the market price of Hanna stock began to decline from a closing price of $34.00 per share on November 9, 1981 to a closing price of $26.00 per share on March 30, 1982. During this period, had Norcen announced an intent or purpose to gain control of Hanna, it is undisputed that Hanna stock would have traded at a higher price. Perry J. Lewis, the plaintiffs’ expert witness, testified, “... I think that that type of announcement would have set in motion a series of events that would bring in — first, it would bring in arbitrage activity, and the market would anticipate that there could be other bidders for this, and the market would anticipate that the company, Hanna itself, would take a position as to whether this was desirable or how they regarded this, and I think generally the effect would have been strongly positive on the market.” Tr., pp. 423, 424. Similarly, Eric J. Gleacher, the defendants’ expert witness, testified , “I think that the bottom line of my opinion is that the price of Hanna stock at the end of March, 1982 would have been $1.00 or $2.00 higher than it would be under normal market factors.” Tr., p. 1047. Had Norcen announced an intent to acquire “ ‘a significant portion of Hanna’s stock’ ... [defined as] 20 to 30 percent,” Lewis testified that, “[i]n my opinion an announcement of an intention to acquire 20 to 30 percent, or a significant portion, would not be interpreted differently than if they stated they were going to seek control, because I think the market assumes that 20 or 30 percent, a 20 or 30 percent interest, or a “significant portion” of a company like Hanna does constitute control unless there is known to be an even larger block which would serve to balance this out,” and Gleacher testified that, “[m]y opinion is that the stock would have jumped up at the beginning of that period almost identically to what it would have under the prior assumptions, the main reason in this case being that the market would have assumed Hanna would have gone out and tried to find a White knight so they would not end up in a position where Norcen would have a minority interest like that.” Tr., pp. 428, 429, 1051. Shortly after November 9, 1981 Kilbourne determined that certain legal research should be undertaken regarding Norcen’s purchases of Hanna stock. Although the research conducted pertained to many aspects of Norcen’s stock purchases, including a subsequent sale, when Kilbourne was asked whether “... the research that you requested ... [United States counsel] to perform at that time was research concerning State and Federal law applicable to the acquisition of a controlling interest in the Hanna Mining Company ... ”, he responded in the affirmative. Tr., p. 905. Indeed, in a November, 1981 response to Kilbourne’s request, Norcen’s United States counsel produced a memorandum, the introduction to which provides in pertinent part as follows: This memorandum reviews certain Federal and state laws which may apply to the acquisition by a foreign corporation (“the Purchaser”) of a controlling interest in a Delaware corporation (“the Company”). The acquisition may be made by open market and privately negotiated stock purchases for cash, or by a cash tender offer, or by such purchases followed by a cash tender offer. The Company is a Delaware corporation with offices in Ohio. Kilbourne identified “the Purchaser” ' as Norcen and “the Company” as Hanna. At the time the memorandum was prepared Kilbourne knew that contact had been made with the Humphrey family and that Norcen was considering the possibility of acquiring its Hanna stock. In late November, 1981 Kilbourne received two other memoranda from Norcen’s United States counsel. The first, dated November 23, 1981, and entitled “Ownership of Stock in Natural Resources Company,” identifies Hanna shareholders who owned 1,000 shares or more as revealed by Hanna’s proxy and other SEC filings of record. With respect to the holdings of R.L. Ireland, III, the memorandum provides that, “[i]n light of ... the fact that he is the uncle of G.M. Humphrey, II ... [he] would be worth contacting as to the possibility of acquiring a block of over 100,000 shares of [Hanna] stock.” The second memoranda, dated November 29, 1981, was a preliminary timetable for a tender offer. By December 16,1981 draft materials for a filing under the Hart-Scott-Rodino Antitrust Improvement Act, 15 U.S.C. § 18a, had also been prepared. In mid-December, 1981 Norcen representatives began contacting investment bankers. Those eventually contacted included the following nationally prominent firms: (1) The First Boston Corporation; (2) Morgan Stanley and Co., Incorporated; (3) Smith Barney, Harris Upham & Co., Incorporated; (4) Solomon Brothers; (5) Blythe Eastman Paine Webber Incorporated and (6) Lehman Brothers. Some of these firms were not hired by Norcen because of conflicting representations but, at least two of the firms, The First Boston Corporation and Morgan Stanley and Co., Incorporated, declined to represent Norcen because they would not participate in a hostile tender offer. Tr., pp. 942, 943. In late November, 1981 Black telephoned Louise Humphrey at her vacation home in Florida. Black testified that, “I said to her that we had bought some shares in Hanna, that we were very interested in knowing whether the Humphrey family as a group considered itself to be continuing shareholders on such a scale, to be, as they had been perceived in the past, proprietors of the company or whether they were as a group intending to withdraw as shareholders; that we were entirely supportive of management; that we wanted to avoid anything that would be thought antagonistic toward management or to her family and that we had been very strenuously advised by the management that if we bought any more shares, they would consider that to be unfriendly and that we had undertaken not to buy any more shares without speaking to them and that we were just quite passive with our shareholding, we were immobilized with it and we were wondering what to do with it ... in the context of making the review of the shareholdings, that we had mentioned in our filing with the Securities and Exchange Commission; that I was curious as to what her family might do with their shares or what their attitude to the company was.” Tr., pp. 629, 630. Black testified that he also “... went to very great length to explain that I was not, I could not be construed as being conspiratorially minded here and I asked if she saw any impropriety in my presenting that question.” Tr., p. 630. Humphrey responded by informing Black that her son, Gilbert W. Humphrey, Jr., was the “principal fiscal advisor to her and her family” and that she would ask him to return Black’s telephone call. Id. On the following day Humphrey complied with his mother’s request and telephoned Black. Humphrey testified that “[Black] indicated that he was interested in discussing with me the Hanna Company and the future interests of the Humphrey family in relationship [sic] to the Hanna Company.” Tr., p. 180. Black testified that he “... recapitulated pretty much what ... I had said to his mother the day before, that we were reviewing this investment, we had no plans at all with it, we were somewhat flabbergasted at the militancy of Mr. Anderson’s request that we not buy any more shares but we had undertaken not to buy any more shares and we were reviewing the investment; we had been urged to sell our shares, we were reluctant to do that, but we were completely uncertain as to what we were going to do; and we were very supportive of management, we were very respective [sic] of the Humphreys as the traditional principal element of ownership along with their relatives in ownership of the company, we didn’t want to rock the boat and we just sincerely didn’t know what to do, and on that basis did he, I asked ... see any utility in our meeting.” Tr., pp. 631, 632. Humphrey responded that he did and he and Black agreed to determine a date that would be mutually convenient. On December 21,1981, Black, his brother and Battle met with Humphrey at his home in Pittsburgh, Pennsylvania. Humphrey identified the members of the Humphrey family for whom he was authorized to speak but declined to divulge any specific information about the size of their holdings in Hanna. Conrad Black reemphasized his desire not to create an unfriendly situation with Hanna and related Hanna management’s negative attitude toward Norcen’s stock purchases. In hypothetical terms, various possibilities were discussed through which the Norcen and Humphrey family’s stockholdings could be combined so as to achieve control of Hanna. Included among these was a Norcen-Humphrey tender offer for 51% of Hanna’s outstanding shares. The meeting ended without any “commitments to do anything.” Tr., p. 638. Humphrey told Black that he would consult “such members [of his family] as he judged appropriate and with Paul Mellon, a significant Hanna shareholder. Humphrey also requested some information regarding Norcen, including annual reports and Form lOKs because he “wanted to understand more about the Blacks and their investment philosophies.” Tr., p. 232. Following the December 21, 1981 meeting with Humphrey, Norcen’s United States counsel prepared two draft tender offers for Hanna stock. Dated January 8 and January 15, 1982, both drafts contemplated a tender offer by Norcen for an unspecified amount of Hanna stock and a “Stock Purchase Agreement” under which members of the Humphrey family, described as the “Z family,” would purchase an unspecified amount of stock tendered under the terms of the tender offer. Battle had directed Kilbourne to have these documents prepared. Gilbert W. Humphrey, Jr., was not advised that such drafts had been prepared, Tr. pp. 244, 245, 826, 827, and, although Black testified that “extensive preparations for tender offer[s] of major public companies don’t take place around [Norcen] without [his] knowing [of it]”, he claimed to be unaware of their preparation. Tr., pp. 355, 356. On February 5, 1982 a second and final meeting with Gilbert W. Humphrey, Jr., took place in Pittsburgh, at which Battle and G. Montegu Black represented Norcen. Although Conrad Black did not attend, Battle and G. Montegu Black had spoken to him that morning by telephone and “he was aware of what exactly was transpiring or about to transpire____” Tr., p. 199. Soon after the meeting began Battle informed Humphrey that Norcen was interested in making a tender offer for Hanna and that it (Norcen) was “ready to go” and “set to go” regardless of Humphrey’s reaction or opposition from Hanna’s management. Tr., p. 204. Humphrey testified that he "... regarded Mr. Battle to be quite anxious.” Id. Battle also informed Humphrey that Norcen was willing to accept the Humphrey family’s participation in the tender offer by giving them an option to purchase a percentage of the stock acquired under the offer. Once again, the meeting ended with no firm commitments. On February 8, 1982 Gilbert W. Humphrey, Jr., after consulting with his brother George, telephoned G. Montegu Black and informed him that the Humphrey family was not interested in participating with Norcen in its proposed tender offer. Humphrey testified that he made this decision for the following four reasons: (1) “... we did not understand in any way, shape or form how this [tender offer] could be beneficial to [Hanna] shareholders,”; (2) “... we felt that Hanna had a series of programs going that were addressing several of their problems and that the worst thing that could happen to the company at this point in time, given the overall economy and problems facing all of us in any industry and especially our industry, would be to have to spend time away from the programs they were trying to implement to solve their problems fighting a tender offer,”; (3) “... I still did not understand and therefore felt there must be a gap between the philosophies of the Humphreys as investors — the Humphreys being me and those I could speak for — and the Blacks, that being Conrad and Montegu, in terms of how they invested,”; and (4) “... we — me—did not want at any point in time, and especially at this point in time, to be in opposition to the existing [Hanna] management.” Tr. pp. 209, 210. On February 16,1982 a meeting attended by Anderson, Nickels, George M. Humphrey, II, the Blacks and Battle was held in Toronto. At this meeting Anderson disclosed that he had been recently apprised of the meetings with Gilbert W. Humphrey, Jr., and that he (Anderson) knew “... that the reason these discussions took place was because of Norcen’s desire to acquire additional shares in Hanna and, in fact, to acquire control of Hanna.” Tr., p. 60. When so informed, Conrad Black responded “that Norcen would be interested in acquiring a 20 percent interest in Hanna so it could equity account for the earnings of Hanna Mining Company.” Tr., pp. 60, 61. According to Humphrey, Black, “... went to what seemed to me to be rather extreme lengths to say how superb he thought the management of the Hanna Mining Company was and how much he would enjoy working with them.” Tr., p. 1127. Humphrey testified further: ... what [Black] was basically saying is, “why don’t you people welcome me as a shareholder? I could be the greatest friend you ever had. All I want is to be an investor with you. I am not seeking to manage the company.” Id. Nickels testified that he, Anderson and Humphrey, informed Black “... that our position, the company’s position, had not changed one bit with respect to [Norcen’s] investment, and that the [Hanna] Board had continued to be opposed to it, and that we were still looking for him to dispose of his interest...”. Tr., pp. 64, 65. The “stock swap” idea, originally proposed by Black on November 4, 1981, was also mentioned. Anderson informed Black that Hanna was now willing to consider such a “swap” but Battle was critical of the proposal. Battle testified that, “[o]ur reaction, and mine in particular, was that [the stock swap proposal] did not do too much, if anything, for the Norcen shareholder body as a whole, and that was when I suggested that perhaps Hanna should give some consideration to Norcen increasing its interest in Hanna up to between 20 and 30 percent with proportional board representation, and that we would be prepared to consider entering into a standstill agreement.” Nickels’ contemporaneous notes regarding this discussion, however, indicate that “Conrad agreed to give the swap further consideration and get back to us.” Soon thereafter, the meeting was terminated. Norcen’s 1981 Annual Report, dated February 16, 1982, the same date as the Toronto meeting, provides in pertinent part as follows: Investment In the fall of 1981, Norcen acquired 783,-700 shares, or approximately 8.8% of the outstanding common stock of The Hanna Mining Company through open market purchases. This investment will be reviewed from time to time. Depending on market and business conditions and other factors, Norcen may seek to acquire further shares of the company or dispose of its present holdings. Norcen Energy Resources Limited, Annual Report 1981, p. 3. Both Lewis and Gleacher testified that had Norcen announced in its annual report an intent or purpose to gain control of Hanna, Hanna stock would have traded at a higher price. Tr., pp. 425, 426, 1050, 1051. On March 3, 1982, at a special meeting, Hanna’s Board of Directors authorized Anderson and Nickels to make a specific proposal to Norcen regarding a “swap” of Norcen’s Hanna shares for Hanna’s shares in Labrador Mining and Exploration Company Limited. Accordingly, on March 12, 1982 they met with Black and Battle in Palm Beach, Florida and proposed the following “swap”: (1) “Norcen purchases Hanna’s 800,000 shares of Labrador”; (2) “Price of $81.00 per share Canadian-1980 Reorganization Plan evaluation (equivalent to $67.00 per share U.S.)”; (3) “$53.6 million U.S. purchase price payable by Norcen’s transfer to Hanna of its [Norcen’s] 783,700 shares of Hanna stock at a credited value of $28.6 million U.S. (Norcen’s cost basis of $36.51 U.S. per share) with balance of $25.0 million U.S. payable to Hanna in cash”; and (4) “Norcen et al [sic] to sign a ten-year standstill agreement, effective following the swap.” The “swap” proposal met with a mixed response. Anderson recalled that “Ed Battle said that as far as he was concerned he was not interested in the Labrador Mining stock [and] that he was still very much interested in Hanna as an investment ...”, and that “Conrad did not necessarily agree with that, but he felt that there may be someway [in which] the swap of Labrador stock might fit into some of their other plans.” Nickels’ testimony confirms that “... Battle pretty much disdained the proposal, and that he said this was not of interest to him,” while, “[o]n the other hand ... Black did indicate some interest ... ”. Tr., pp. 72, 73. Nickels testified further that “[b]oth Mr. Battle and Mr. Black never deviated from the stated purpose of making the investment for investment purposes,” and that the meeting concluded after “... Black indicated that he would take [the stock swap proposal] under consideration and ... be back to us in a week.” Tr., pp. 78, 79. On March 22, 1982 Norcen representatives met with representatives of Lehman Brothers. Kilbourne testified that “... they [Lehman Brothers] made their recommendation [regarding Norcen’s purchases of Hanna stock] on four scenarios,”: (1) “[t]he first ... was a 30 percent public offer,”; (2) “[t]he second ... was a 30 percent purchase of treasury shares to the maximum extent allowed by law”; (3) “[t]he third ... was a 51 percent tender offer and [4] the fourth ... was a 100 percent tender offer.” Tr., p. 836. Within this context, Lehman Brothers concluded that Norcen’s most appropriate action was to make a tender offer for fifty-one (51) percent of Hanna’s issued and outstanding stock at a price of $45.00 per share. This conclusion was reached notwithstanding Norcen’s valuation of Hanna stock at $74.00 per share, Tr., p. 1036, Lehman Brothers’ “conservative” valuation of Hanna stock at “somewhere in the 50’s,” Tr., p. 1037, and characterization of Hanna as a “high quality company.” Tr., pp. 1061, 1105. On March 29, 1982 Norcen’s Board of Directors convened to discuss Norcen’s purchases of Hanna stock. Kilbourne’s handwritten notes of the events which took place at the meeting are as follows: Hanna, EGB[attle] A, Background 2/16/82, Toronto. B, swap proposal of H[anna] March 12, 1982. C, H[anna] buy Norcen shares. D, 3/12/82, Florida. H[anna] Board authorized to pursue swap by R[obert] A[nderson]. N[orcen] indicated interest in increasing holdings in Hanna. E, Lehman [Bros., Kuhn, Loeb] 3/22/82, recommendation. 51 percent tender offer preliminary. White knight not likely. Likely success. EGB[attle] willing to seek 30 percent and standstill if possible. W 3/24/ Florida. C[onrad] B[lack] M[ontegu] B[laek] EGB[attle] and mgmt — Review Schedule A, April 2nd, 1982, Cleveland meeting. B, board approval. C, tender offer, 51 percent authforized], April 5, 1982. • D, would consider 30 percent public or private, equal board representation [marginal note, Norcen preferred route.] E, further strategy, week, New York City, April 1, 1982. F, push button, April 2,1982 by Executive Committee, call off if standstill agreement achieved. C[onrad] B[lack], March 12, 1982. A swap appealing to H[ollinger]A[rgus], and L[abrador] Mpning] and E[xploration] B, [ditto marks referring to the word above ‘swap’] not appealing to Norcen. Dilution of Norcen net income. C, H[humphrey family] relationship and Norcen. H[anna] management and Norcen [marginal note C[onrad] B[lack] hope for balance.] Lehman persuaded to believe we would take less than 51 percent control, i.e. our preference of all possibilities. Scenario, standstill less than 10 percent, L[ehman,] therefore bid. C[onrad] B[laek], standstill greater than 10 percent and therefore worth try with R[obert] A[nderson]. Also C[onrad] B[lack] concerned for U.S. economy, L[abrador] Mpning &] E[xploration] debt ($368 million) Interruption of IOC c[ash] F[low] to L[abrador] Mpning &] E[xploration] c[ash] f[low] to L[abrador] Mpning &] E[xploration] c[ash] f[low] for royalty noted. We are in a strong position — Foreign] I[nvestment] R[eview] A[gency]— etc. — existing investment. NCN [Norcen] putting money out of Canada to bring back Canadian control of Canadian assets. Tr., pp. 830-834. (emphasis added). When Kilbourne was asked, “[n]ow, it’s true, is it not, that Mr. Conrad Black indicated that [the March 29, 1982 directors meeting] that he thought the existing investment which Norcen had in Hanna put Norcen in a stronger position vis-a-vis other potential suitors for [Hanna’ and would make it more difficult for Hanna to resist any of the possibilities you had in mind?”, he responded, “Mr. Black considered [the] existing investment as an advantage, yes, sir.” Tr., p. 972. Indeed, Kilbourne also responded in the affirmative when asked whether “... Norcen still enjoys that advantage today ... by reason of its 8.8 percent [interest] in Hanna Mining Company?” Tr., p. 973. On March 31, 1982 Norcen filed its Form 10K with the SEC. In pertinent part it provides as follows: In 1981 Norcen acquired an 8.8% interest in The Hanna Mining Company for $34.6 million____ The investment in The Hanna Mining Company will be reviewed from time to time. Depending on market and business conditions and other factors, Norcen may seek to acquire further shares of The Hanna Mining Company or to dispose of the present holdings. Norcen Energy Resources Limited, Form 10K, p. 26, March 31, 1982. As with its annual report, had Norcen announced in its Form 10K an intent or purpose to gain control of Hanna, Hanna stock would have traded at a higher price. Tr., pp. 427, 428, 1050, 1051. On April 2, 1982 Norcen’s Executive Committee met at 9:00 a.m., during which Battle reviewed Norcen’s efforts to negotiate with Hanna’s management and reported that such efforts failed. The Executive Committee authorized Norcen to make a tender offer for 3,800,000 shares of Hanna stock so that, if successful, Norcen would own approximately fifty-one (51) percent of Hanna. The tender offer price was to be determined at a subsequent meeting. The Executive Committee also instructed Battle and G. Montegu Black to inform Anderson of Norcen’s decision to make a tender offer. Accordingly, late that afternoon, Battle and G. Montegu Black met with Anderson and Nickels in Cleveland, Ohio. At the start of the meeting Battle announced: “I am here today to tell you, number one, that on Monday morning [April 5, 1982] the Board of Directors of Norcen has authorized me to go for a tender offer for 51 percent of Hanna Mining stock.” Tr., p. 83. As an alternative, he proposed a “standstill agreement.” Tr., pp. 84, 85. That agreement provided: (1) Norcen would acquire thirty (30) percent of Hanna by combining a direct purchase of 1,600,000 shares from Hanna with open market purchases; (2) Norcen would not purchase any additional shares until after December 31, 1985; (3) Hanna’s Board of Directors would be increased from thirteen (13) to eighteen (18) members with Norcen electing five (5); (4) an eighty (80) percent vote of Hanna’s enlarged Board of Directors would be required for spending the proceeds from Norcen’s direct purchase of Hanna stock, for any amendment to Hanna’s certificate of incorporation or by-laws, for the issue of any shares of common stock at a price less than the current market price and for the approval of any merger or consolidation with or, tender offer for, any shares of common stock by any person or, any sale of a material portion of Hanna’s assets in any single transaction or group of transactions, (thereby giving Norcen and Conrad Black a veto power over many significant actions of Hanna’s management); and (5) Norcen would not solicit proxies or become a participant in any election contest. Nickels’ and Andersons’ reactions to Battle’s comments can be characterized only as shock. Nickels called Battle’s proposal an “ultimatum.” Tr., p. 84. Anderson testified: “... we were amazed that they would put us in a corner like that with such little time to act ... it was certainly contrary to the spirit of all the previous meetings ... we couldn’t understand it ... it is unbelievable to us that there are people like this who can sit around and say certain things and then turn around and do what they did.” No agreement was reached at this meeting but another was scheduled for Sunday, April 4, 1982. On April 3, 1982 Norcen’s Executive Committee set a tender offer price of $40.00 per share and authorized continued negotiations with Hanna’s management. On April 4, 1982 Battle and G. Montegu Black met with Anderson and Nickels. Battle informed them that Norcen’s Executive Committee had set a tender offer price of $40.00 per share. Anderson presented an outline of a “standstill agreement” prepared by Hanna’s management which had not, as yet, been approved by Hanna’s Board of Directors. Under the proposal Norcen would acquire a twenty (20) percent interest in Hanna by purchasing newly issued common stock and be precluded from further purchases for ten (10) years. Anderson’s proposal did not provide for an eighty (80) percent vote of Hanna’s Board of Directors for approval of certain major transactions, including the spending of the proceeds received from Norcen’s proposed stock purchase. Battle summarily rejected the proposal and informed Anderson and Nickles that, “there is no point in our pursuing these discussions any further and we have no choice but to go with our tender offer on Monday [April 5, 1982] morning.” Tr., p. 102. Later that evening, because of a breakdown in negotiations with Hanna’s management and upon Lehman Brothers’ recommendation, Norcen’s Executive Committee increased the tender offer price to $45.00 per share. On April 5, 1982 Norcen announced that on April 6, 1982 it intended to commence a tender offer for up to 3,800,000 shares of Hanna at a price of $45.00 per share. The 3,800,000 shares represent as of December 31, 1981, approximately 42.7 percent of Hanna’s issued and outstanding stock and together with the 783,700 shares Norcen currently owned, would bring its holdings to approximately 51.5 percent. The plaintiffs filed this action within an hour of Norcen’s announcement and this court issued a temporary restraining order the same day. On April 9, 1982 Norcen filed an amendment to its original Schedule 13D with the SEC. The amendment discloses the pertinent provision of the minutes of Norcen’s Executive Committee’s meeting of September 9, 1981, identifies the “U.S. Company” as Hanna and provides that “[t]he ‘ultimate purpose of acquiring a 51% position at a later date’ was intended by E.G. Battle, President and Chief Executive Officer of Norcen, as a corporate goal consistent with Norcen’s long range planning to be achieved by Norcen over a period in excess of five years.” Section 13(d)(1) of the Securities Exchange Act of 1934, 15 U.S.C. § 78m(d)(l), provides that “[a]ny person who, after acquiring directly or indirectly the beneficial ownership of any equity security ... is directly or indirectly the beneficial owner of more than 5 per centum of such class shall, within ten days after such acquisition, send to the issuer of the security at its principal executive office by registered or certified mail, send to each exchange where the security is traded, and file with the Commission, a statement containing such of the following information, and such additional information, as the Commission may by rules and regulations, prescribe as necessary or appropriate in the public interest or for the protection of investors...”. The disclosures required in a Schedule 13D statement are contained in sections 13(d)(l)(A)-(E), 15 U.S.C. §§ 78m(d)(l)(A)-(E), which provide as follows: (A) the background, and identity, residence, and citizenship of, and the nature of such beneficial ownership by, such person and all other persons by whom or on whose behalf the purchases have been or are to be effected; (B) the source and amount of the funds or other consideration used or to be used in making the purchases, and if any part of the purchase price is represented or is to be represented by funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, holding, or trading such security, a description of the transaction and the names of the parties thereto, except that where a source of funds is a loan made in the ordinary course of business by a bank, as defined in section 78c(a)(6) of this title, if the person filing such statement so requests, the name of the bank shall not be made available to the public; (C) if the purpose of the purchases or prospective purchases is to acquire control of the business of the issuer of the securities, any plans or proposals which such persons may have to liquidate such issuer, to sell its assets to or merge it with any other persons, or to make any other major change in its business or corporate structure; (D) the number of shares of such security which are beneficially owned, and the number of shares concerning which there is a right to acquire, directly or indirectly, by (i) such person, and (ii) by each associate of such person, giving the background, identity, residence, and citizenship of each such associate; and (E) information as to any contracts, arrangements, or understandings with any person with respect to any securities of the issuer, including but not limited to transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or guaranties of the profits, division of losses or profits, or the giving or withholding of proxies, naming the persons with whom such contracts, arrangements, or understandings have been entered into, and giving the details thereof. The plaintiffs claim that “[t]he Schedule 13D filed by defendants on November 6, 1981 and the amendment filed by defendants on April 9, 1982 fail to state material facts, contain misstatements of material facts, are materially false, misleading, and deceptive, contain material omissions and constitute devices for defrauding Hanna’s stockholders, potential buyers and sellers of Hanna stock, and Hanna in order to induce them to make uninformed investment decisions with regard to Hanna stock and to take or fail to take other actions, all to enable Norcen to obtain control of Hanna at an artificially low and grossly inadequate price.” Specifically, the plaintiffs’ amended complaint alleges that: The Schedule 13D, contrary to fact, stated that the purchases of Hanna stock to which it related were solely “for investment.” In fact, Norcen fully intended those purchases as the first step to enable it to obtain control of, or to exercise management influence over, Hanna pursuant to an actual or threatened tender offer or other transaction. Amended Complaint, p. 16,1142. The plaintiffs claim that the April 9, 1982 amendment to the Schedule 13D is “materially false and misleading” in the following particulars: (a) While disclosing for the first time the minutes of the September 9, 1981 meeting of Norcen’s Executive Committee, which confirm defendants’ intent to acquire control of Hanna, defendants falsely state that their plan to acquire control of Hanna was to have taken place over a period of more than five years; (b) Defendants did not disclose that during meetings in late 1981 and early 1982 with representatives of Hanna, defendants repeatedly and falsely stated that they had purchased stock of Hanna for an investment only and that they did not intend to acquire control of Hanna; (c) Defendants did not disclose material facts concerning their ongoing efforts to make a tender offer for Hanna stock, including, inter alia, the fact that they had drafted tender offer documents by not later than January 8, 1982 and their disclosure of a forthcoming tender offer to a stockholder of Hanna; (d) Defendants did not disclose that they had filed and disseminated to the public materially false and misleading statements concerning their efforts to obtain control of Hanna; and (e) Defendants did not disclose that they had intentionally manipulated the market for Hanna stock and that the price for such stock was artificially low as a result of such manipulation. Id., pp. 12, 13, 1132. In response to the plaintiffs’ claims, the defendants contend that “[w]hatever the merits of [the plaintiffs’] allegation^] — and [they are] merit-less — plaintiffs have no standing to raise any such claims in this Court.” (footnote omitted). The thrust of the defendants’ contention is that “[r]ecent decisions by the United States Supreme Court and by district courts ... compel the conclusion that there is no private right of action under section 13(d) generally and, more specifically, that there is no private right of action in favor of a target company.” Since it is unquestioned that section 13(d) does not provide for a private right of action, any such right must be judicially implied. Therefore, the initial question presented is whether the plaintiffs have standing to bring this action. Although neither the United States Supreme Court nor the Sixth Circuit Court of Appeals have ruled on this issue, most courts which have, ruled that there is an implied private right of action under section 13(d). In General Aircraft Corp. v. Lampert, 556 F.2d 90 (1st Cir.1977), the First Circuit Court of Appeals held that when a Schedule 13D is incomplete, inaccurate or false the target corporation has standing to maintain a private right of action for injunctive relief “until the Schedule 13D is amended to reflect accurately their [the officers’] intentions.” 556 F.2d at 97. In GAF Corp. v. Milstein, 453 F.2d 709 (2d Cir.1971), cert. denied, 406 U.S. 910, 92 S.Ct. 1610, 31 L.Ed.2d 821 (1972), the Second Circuit Court of Appeals held “that the obligation to file truthful statements is implicit in the obligation to file with the issuer, [i.e., target