Full opinion text
OPINION SWEET, District Judge. Defendants Dale J. Offenbecher (“Offen-becher”), John B. Davies (“Davies”), and Sidney W. Smith, Jr. (“Smith”) (collectively, the “Defendants”) have moved pursuant to Rule 56, Fed.R.Civ.P., for an order dismissing the amended complaint of plaintiffs Estate of Grace A. Detwiler, et al. (collectively, the “Plaintiffs”). For the reasons set forth below, the motion is granted, and the amended complaint is dismissed. By virtue of the skill of counsel for both sides — as well as their care and diligence — a thorough and professional autopsy of a complicated corporate transaction has been presented for diagnosis. This dispute has been driven by the differing views of well advised, ably represented shareholders and executives of a closely held corporation as to the proper course of the corporation’s affairs. Despite the inherent complications surrounding an almost $100 million transaction, these factors have made this motion a case study in the propriety of pretrial resolution. The Parties and Players Ferro Manufacturing Corporation (“Fer-ro” or “the Company”) was a closely held Michigan corporation with its principal place of business in Detroit, Michigan. Since the early 1980s, Ferro had been organized as a corporate holding company that owned three businesses, each operating independent of one another, with a separate President, Vice President of Finance or Controller, and other officers. The Automotive Division (“Automotive”) manufactured equipment for cars and trucks. Automotive included Ferro Plastics Products, Inc. (“Plastics”), which produced custom injection molded plastic products for Automotive and automotive original equipment manufacturers. In 1978, Ferro acquired the Von Weise Gear Company (“VWG”), which manufactured fractional horsepower gear motors for industrial and other applications. Ferro acquired the Aerospace Division (“Aerospace”) in 1983. That division was comprised of two subsidiaries, Gentz Industries, Inc. (“Gentz”) and Johnson Technology, Inc. (“JT”), that manufactured commercial and military aircraft parts. For the fiscal year ended August 31, 1984, Ferro earned $11,698,000 on net sales of $195,200,000 — $134,800,000 for Automotive, $37,800,000 for VWG, and $22,600,000 for Aerospace. In 1980, the Company had sales of $69 million. During 1984 and 1985, various individuals and trusts owned Ferro’s stock, distributed among Ferro’s management and descendants of the Company’s four founding families in the following proportions: Family Number Percent Rollo W. Detwiler 184,356 16.4% William C. Devereaux 747,840 42.5% Ward A. Detwiler 193,920 17.3% John A. Bryant 206,856 18.4% Management 60,000 5.3% The Plaintiffs are members of the Ward A. Detwiler and John A. Bryant families and trusts benefitting members of those families. The parties connected to the Ward A. Detwiler family include Estate of Grace A. Detwiler, Grace A. Detwiler Trust for George A. Detwiler and his family, Grace A. Detwiler Trust for Peter M. Det-wiler and his family, Grace A. Detwiler Trust for Frederic B. Detwiler and his family, Grace A. Detwiler Trust for Children of Frederic B. Detwiler, Grace A. Detwiler Trust for Phyllis S. Detwiler and her family, George A. Detwiler Trust, Estate of George A. Detwiler, Peter M. Detwiler, Frederic B. Detwiler, and Phyllis D. Henderson. The parties connected to the John A. Bryant family include the Helen S. Bryant Trust, John A. Bryant, II, and William R. Bryant, Jr. Ferro had a nine-person board of directors. The four representatives of the founding families included Warren F. (a/k/a Rick) Kendall (“Kendall”), grandson of William C. Devereaux and Vice President Manufacturing of Automotive; Philip B. Detwiler (“Philip Detwiler”), son of Rol-lo W. Detwiler and a retired senior construction engineer; plaintiff Peter M. Det-wiler (“Peter Detwiler”), son of Ward A. Detwiler and Vice-Chairman of the board of E.F. Hutton & Co., Inc. (“Hutton”); and plaintiff John A. Bryant III (“Bryant”), grandson of John A. Bryant and a manufacturer’s representative. The Company’s three outside directors included Richard E. Fister (“Fister”), who was President of Fister and Associates, a management consulting firm, and who had served as Professor of Finance at St. Louis University, director of a number of companies, and Chief Executive Officer of VWG before Ferro acquired it; William R. James (“James”), who was Vice President of Capital Cities Communications, Inc. and had served as a Touche Ross & Co. (“Touche Ross”) partner in charge of the firm’s national manufacturing consulting practice, and who held a Masters in Business Administration from Harvard University; and Paul S. Mirabito (“Mirabito”), a retired Chairman and Chief Executive Officer of Burroughs Corporation who served as director of various companies, including Uni-sys, Bendix, Warner Lambert, Consumers Power, and Detroit Bank & Trust. None of the three outside directors held Ferro shares or participated in management. The management representative on the board was defendant Dale J. Offenbecher (“Offenbecher”), who served as Ferro’s Chairman, President, and Chief Executive Officer and owned 3.2% of its voting shares. Defendant Sidney W. Smith, Jr. (“Smith”), a senior partner in the Detroit law firm of Clark, Klein & Beaumont (“Clark Klein”), served as legal counsel on the board. Smith and his firm had been Ferro’s general counsel since the Company’s inception. Smith also represented Adelyn and Leslie Devereaux on the board and served as legal counsel to members of the Devereaux, Kendall, and Rollo Detwiler families and as legal counsel and/or co-trustee of several trusts holding Ferro stock. In addition to Offenbecher, Ferro’s senior management included defendant John B. Davis, Jr. (“Davies”), the Company’s Senior Vice President for Finance and Administration, Secretary, and Treasurer, who owned approximately one percent of Ferro’s shares. Offenbecher and Davies ran the Ferro holding company, without primary operational responsibilities for any of its three businesses. James E. Stewart (“Stewart”) was President of Automotive, and he owned approximately one percent of Ferro’s shares. James E. Grimes (“Grimes”) served as President of Aerospace, and Edward M. Kruske (“Kruske”) was President of VWG. Neither Grimes nor Kruske owned any Fer-ro shares. Ferro’s investment banker was Dillon, Read & Company, Inc. (“Dillon Read"), a firm experienced in the mergers and acquisitions field. In 1985, for example, the firm acted as investment advisor to the purchaser or seller in over thirty transactions. The twenty-one transactions in which price information was disclosed amounted to $10.6 billion. Significantly, the transaction the Plaintiffs challenge in this lawsuit did not involve a publicly-held company with widely-dispersed shareholders having varying degrees of sophistication and knowledge about the company. Ferro’s shareholders included a small number of sophisticated individuals and trusts whose extensive involvement with the company provided them substantial knowledge about its products, operations, and financial structure. Prior Proceedings A majority of Ferro’s shareholders voted on July 25, 1985 to sell the Company to Hoover Universal, Inc. (“Hoover”) for $87.59 per share. The Plaintiffs include the shareholders in the minority who voted against the sale. On September 17, 1986, the Plaintiffs filed a complaint against Offenbecher, Davies, and Smith, alleging violations of Rule 10b-5 and breaches of fiduciary duties arising out of the events surrounding the sale. They filed an amended complaint on January 10, 1989. The parties have conducted extensive discovery during the course of this action. More than eighty deposition notices or subpoenas for parties, non-parties, and experts have been issued, and thousands of pages of documents have been produced. On January 13, 1989, the Defendants moved pursuant to Rule 56, Fed.R.Civ.P., to dismiss the amended complaint in its entirety. Oral argument was held and the motion was considered fully submitted on March 24, 1989. Findings of Fact A. Early Efforts to Sell Ferro On June 28, 1977, Ferro’s board voted unanimously to investigate a possible merger or sale of Ferro. Toward this end, the Company interviewed several investment banking firms, including Hutton, and retained Dillon Read on November 23, 1977. Dillon Read advised Ferro regarding a possible sale or merger in 1977 and performed services for Ferro in connection with the acquisition of VWG in 1978. After Warren F. Kendall, Sr. died and W. Robert Bryant became terminally ill in 1978, both of whom had been directors favoring the merger or sale, Ferro discontinued its efforts to find a buyer for the Company. At that time, Mrs. Shirley D. Kendall determined that she would not vote in favor of a sale as long as the Ward Detwiler family opposed it. When Shirley Kendall died on October 6, 1983, her children inherited her stock, and they did not share her opposition to the sale of Ferro. B. Management’s Initial Approach to Dillon Read in 1983 In December 1983, Offenbecher telephoned Dillon Read to arrange a meeting to discuss a possible sale of Ferro. Offen-becher met with Dillon Read on January 6, 1984, and on January 9, 1984, Offenbecher sent Dillon Read financial information relating to Ferro. An internal Dillon Read memorandum dated January 11, 1984 set forth the results of its meeting with Offen-becher as follows: The desire of certain stockholders to sell and the advanced age of other stockholders has created a potentially unstable situation from management’s point of view. As a result, we have been asked to evaluate the following alternatives: 1. Management buy-out of the Company. 2. Sale of the Company to a third party. 3. Initial public offering, including secondary shares. Please note that the situation is very sensitive, as the Company’s Board of Directors is not yet aware that discussions with Dillon Read are taking place. At his deposition, Offenbecher testified that he did not recall whether he told any member of Ferro’s board that he had met with Dillon Read to discuss alternatives for selling the Company. On January 19, 1984, Offenbecher and Davies met with Dillon Read representatives. At that meeting, Dillon Read distributed a report concerning Ferro (the “January Report”). That report summarized Ferro’s recent financial results, identified companies similar to Ferro to determine Ferro’s value, analyzed how to arrange a management leveraged buy-out (“LBO”), and tabulated the financial results of recent initial public offerings (“IPOs”) and mergers. On January 25, 1984, Davies forwarded additional financial information to Dillon Read. From mid-January through mid-February 1984, Dillon Read prepared various analyses identifying prospective purchasers and examining a possible LBO of Ferro. On February 14, 1984, Offenbecher, Davies, and Smith met with Dillon Read representatives. Dillon Read distributed a report (the “February Report”) analyzing each of Ferro’s divisions and discussing four alternative transactions regarding Ferro: the sale of the Company to a third party, a management buyout of the Company, the sale of Automotive, and a public offering of shares. C. The Directors’ Involvement in the Decision to Sell Ferro On January 23, 1984, Davies sent Ferro’s directors a letter notifying them of a special board meeting scheduled for February 29, 1984 regarding “Corporation Philosophy and Actions to Implement.” The letter added: “Since this is a very important topic, you should plan to be available for the entire business day.” As scheduled, the Ferro board met on February 29,1984. According to the board minutes, the board had a lengthy discussion, and then a motion was made to retain an independent investment banker “to review and make recommendations as to the future directions available to the Company and its shareholders in realizing the value of their equity interests.” When Peter Detwiler questioned the legality of this resolution, the board resolved to retain independent counsel to determine the resolution’s legality. According to Peter Detwiler, he sought permission to bring his lawyer into the meeting and into future board meetings, but Offenbecher stated that he thought this was improper. The minutes of the February 29, 1984 board meeting contain no indication that Offenbecher, Davies, or Smith disclosed their ongoing contacts with Dillon Read or the fact that Dillon Read had prepared two reports regarding Ferro. On March 1, 1984, Philip Detwiler sent Smith a letter discussing the February 29, 1984 meeting. In that letter, he stated, among other things: I wish to commend you for your calm response to Peter’s remarks. His personal attack on you was out of order and I was close to assailing him (verbally). I will not let it pass a second time. I don’t see how there could be any legal objection to the motion you made but perhaps there could be some improvement in its wording with a little more time to think about it. I found it hard to reason clearly with the pressure but thought you performed admirably. It’s just a stalling effort by Peter to deter us. I have lost all respect for Paul Mirabito. His defense of Peter’s position in my mind is not through a reasonable thought process. I am beginning to feel we could do without him as a board member for several reasons. I rode to the airport with Dick Fister and our talk reinforced my favorable opinion of him and his logic. He told my about his background and it seems his experience makes him a very valuable member of the board. I am sure he is 100% his own man. He thinks Peter’s questioning the legality is ridiculous but would probably like to see some compromise made. I had the unforeseen pleasure to ride to Chicago with Dale in side by side seats.... He has no doubt about my confidence or support of him. He dislikes Peter’s tactics as much as we do.... We really had a great talk and I consider it invaluable to me. I also consider him invaluable. Well, round # 1 is over. You warned me it would not be an easy or always a pleasant job to be on the Board. I found out rather promptly. But I am not discouraged and have already started training for round # 2. See you in about 2V2 weeks. In early March 1984, Offenbecher and Davies retained the Detroit law firm of Dickinson, Wright, Moon, Van Dusen & Freeman (“Dickinson Wright”) to prepare and deliver “some opinions.” Offenbecher and Davies told Dickinson Wright that Peter Detwiler had asserted a right to have his counsel present at board meetings, and they sought an opinion from the firm whether directors had this right under Michigan law. Notes from that meeting indicate that Offenbecher and Davies told the firm that Smith represented the Dever-eaux, Kendall, and Philip Detwiler families on the board. On March 14, 1984, Dillon Read prepared a fee approval form regarding Ferro that described its engagement as to prepare a presentation for the May board meeting discussing “what the company could expect in a sale, a public offering and what the impact on shareholders would be of the alternatives compared to remaining a private company.” The form noted that “a substantial amount of work has already been performed on this presentation.” At the time Dillon Read prepared this form, the board had not decided formally to hire Dillon Read or any other investment banking firm. Ferro’s board met on March 20, 1984. At that meeting, the board appointed a special committee of its outside directors— Fister, James, and Mirabito — “to investigate the interests of the Company’s stockholders concerning their ownership in the Company and the needs of the Company.” The board authorized the committee “to employ independent investment bankers, special counsel, and such other experts as the Committee deemed necessary.” Peter Detwiler and Bryant aver that they did not know that the Special Committee’s purpose was to arrange Ferro’s sale when they voted in favor of this resolution. At the time of the March 20, 1984 meeting, Offenbecher intended to recommend Dillon Read to the board because the firm had previous knowledge of the Company, management, and stockholders, it had performed due diligence for VWG, and Offen-becher believed the board and management could work effectively with Dillon Read. Offenbecher did not recommend Dillon Read to the board, however, because the board resolved to appoint a special committee. Offenbecher and Davies did not inform the board that they had met with Dillon Read in January and February 1984 and that Dillon Read had prepared two reports about Ferro. During a recess in the board meeting, Offenbecher recommended Dillon Read to Fister and James, two of the outside directors who were to serve on the special committee. The special committee later voted to retain Dillon Read as its investment banker. In his affidavit, James stated: At the time the committee retained Dillon Read, I knew that Dillon Read had been in contact with Dale Offenbecher earlier that year regarding the same or similar subjects as to which the committee sought their advice and was aware that Dillon Read had performed work in that regard in consultation with Dale Of-fenbeeher. Dillon Read’s prior work in 1984, as well as Dillon Read’s prior work for Ferro in the 1977-78 time frame, were positive factors in my determination to recommend Dillon Read be retained by the committee. As a result of my contemporaneous discussions with the other members of the committee and Dillon Read, the other committee members were also aware of the foregoing facts at the time we determined to retain Dillon Read. Fister testified at his deposition that he knew that Dillon Read had worked for Fer-ro in 1977 and that Offenbeeher had kept the firm up to date about the Company since then. He did not recall whether Of-fenbeeher told him the services Dillon Read had performed in this connection. At his deposition, Mirabito testified that he did not recall whether Dillon Read disclosed to the committee that it previously had performed services for Ferro’s management. The special committee also retained Fred W. Freeman (“Freeman”) of Dickinson Wright. On April 6, 1984, the special committee met with Dillon Read representatives and Offenbeeher to discuss the services the committee wanted Dillon Read to perform for it. Dillon Read presented a report (the “April Report”) to a meeting of the special committee on April 25, 1984. Offenbeeher also was present at that meeting. The report analyzed three options available to the shareholders: maintaining the status quo, selling the Company (either to a third party or in an LBO), or making an IPO. Dillon Read’s analysis of a third party sale assessed a range of values for each of Ferro’s three divisions based upon the price/earnings ratios achieved in acquisitions of comparable companies. Its analysis of an LBO involved a discounted cash flow valuation model based on optimistic and pessimistic ten-year scenarios. Dillon Read assessed the IPO by looking at the implied market value for each of Ferro’s three divisions based upon price/earnings ratios of comparable publicly traded companies. The April Report omitted information contained in the January and February Reports, including an analysis of the “Acquisition Premium Over Target’s Market Price 4 Weeks Prior to Announcement” for acquiring comparable manufacturing companies (the January Report), an analysis of the option of selling Automotive alone (the February Report), and a conclusion that Ferro’s value in an IPO exceeded its value in a straight sale (the February Report). On May 9, 1984, the special committee met with Offenbeeher, Freeman, and Dillon Read representatives to review further the April Report and to discuss the meetings the special committee had conducted with various shareholders. The Ferro board held a meeting on May 14, 1984, at which James advised the board about the special committee’s progress in conducting shareholder interviews. Also at that meeting, Dillon Read representatives presented a summary of the April Report (the “Summary”). The Summary discussed six problems with maintaining the status quo, then reviewed the advantages and disadvantages of selling the Company to a corporate buyer, selling it in an LBO, or offering the shares to the public. It described the timing for a sale to a corporate buyer as “excellent,” and it valued a sale to a corporate buyer at $58 to $67 million, an LBO at $60 million, and an IPO at $54 to $63 million. These valuations differed from the January Report’s conclusion that valued the Company higher in an IPO than a sale. Shortly after the May 14, 1984 board meeting, Peter Detwiler, through his attorney, Alan Schwartz (“Schwartz”), asked Freeman for a copy of Dillon Read’s April Report. Freeman advised Schwartz that the special committee had restricted distribution of the report, but that Schwartz was free to view the April Report at Freeman's office. James, the special committee’s chairman, subsequently authorized Freeman to deliver a copy of the April Report to Peter Detwiler. On June 13, 1984, Freeman sent Schwartz the report, asking him to forward it to Peter Detwiler. D. The Management Equity Plan At the same time the Ferro board was considering a sale of the Company, it reviewed the Company’s Management Equity Plan (the “Equity Plan”). Pursuant to the Equity Plan, Offenbecher had acquired 12,-000 Ferro shares, Davies 4,000 shares, and Stewart 4,000 shares as of September 1, 1980, subject to certain restrictions. These included no full ownership rights unless they remained Ferro officers until 1987 and Ferro achieved stated financial results for fiscal year (“FY”) 1981 through FY 1987. A three-to-one stock split in 1988 increased Offenbecher's holdings to 36,000 shares, Davies’s to 12,000 shares, and Stewart’s to 12,000 shares. On February 20, 1984, Ferro’s Compensation Committee, consisting of the Company’s three outside directors, met. At Of-fenbecher’s request, Touche Ross made a presentation concerning the possible tax consequences of the Equity Plan and the actions available to the Company to alleviate these consequences. One of the alternatives discussed involved paying management a bonus to cover taxes they would incur when restrictions on their stock lapsed. Offenbecher had discussed that alternative with Touche Ross prior to the February 20, 1984 meeting. The committee directed Mirabito, its chairman, to prepare a report for the full board, and it requested Touche Ross to analyze the Equity Plan between Ferro and Offenbecher, Davies, and Stewart as it then was constituted. Touche Ross concluded that Ferro would have to pay bonuses totaling $891,682, including $535,010 for Offenbecher and $178,336 each for Davies and Stewart to eliminate the tax consequences to management resulting from removing the restrictions on their stock. Touche Ross’s report on the Equity Plan was presented to the Ferro board at a meeting on March 20, 1984. Mirabito recommended that the board adopt the bonus proposal contained in that report. At Peter Detwiler’s request, the board agreed to involve Jack B. Salwen (“Salwen”), the attorney who prepared the Equity Plan in 1981. With Offenbecher abstaining, the board passed a resolution directing Mirabi-to to contact Salwen to review Touche Ross’s report. In late March and early April 1984, Sal-wen reviewed the Touche Ross report. In a memorandum dated April 19, 1984, Sal-wen recommended that the Compensation Committee reject the proposed bonus, reasoning that a bonus would cost Ferro almost $1 million more than Touche Ross had estimated. At its May 14, 1984, the Ferro board revised the Equity Plan in the following respects: (1) all restrictions on stock owned by management would be eliminated as of November 7, 1983; (2) Ferro would loan Offenbecher $250,000 and Davies and Stewart $83,000 each to help them pay income taxes resulting from the lapse of the restrictions; (3) Ferro would provide Offenbecher, Davies, and Stewart additional bonuses to back these loans; and (4) if Ferro were sold, the Company would pay bonuses to Offenbecher, Davies, and Stewart in amounts equal to these loans plus additional taxes. E. Shareholders’ Involvement in the Decision to Sell Ferro Throughout 1984, the special committee met with representatives of the various shareholder groups, including Warren Kendall and Lynne Devereaux on April 6, 1984, two Bryants and three members of the Duffield family on April 16, 1984, Peter Detwiler, his attorney, Schwartz, and other members of the Ward A. Detwiler family on May 9, 1984, Philip Detwiler as spokesperson for the Rollo Detwiler family on May 14, 1984, John Bryant on September 28, 1984, and a representative of the National Bank of Detroit, as trustee for certain Devereaux and Rollo Detwiler family trusts, on October 9, 1984. The spécial committee set forth its findings in a report dated November 1984 (the “November Report”). Apart from contacts with the special committee, some of the shareholders discussed the available options among themselves in the summer of 1984. For example, Philip Detwiler contacted members of his family to solicit their views. Similarly, Warren Kendall met with James D. Kendall, Patricia Boyd, William Kendall, Ade-lyn Devereaux, and Leslie Devereaux regarding their opinion about selling the Company. Peter Detwiler discussed a possible sale with representatives from the National Bank of Detroit, as trustees of certain Rollo Detwiler and Devereaux trusts. Some shareholders also met with management, Smith, and/or Dillon Read. In August, 1984, the Kendall and Dever-eaux families met with a Dillon Read representative, Offenbecher, and Smith. According to an agenda prepared for that meeting, Dillon Read described Ferro’s present and future value, the type of transaction (including a sale of the entire business or a sale of Automotive), the potential purchasers (including a company listed on the New York Stock Exchange, a closely held company, an LBO, and a public offering), the role dissenting shareholders might play, and Dillon Read’s recommendations. Offenbecher reviewed the Company’s background, financial information, management and board of directors, and prospects. Smith discussed various tax effects, legal matters (regarding a sale of the Company, a spin-off, a sale of Automotive, and the shareholders’ liability), and estate planning. When Ferro’s board met on September 18, 1984, neither Offenbecher, Davies, nor Smith disclosed that they had met with Dillon Read and the Kendall and Dever-eaux families to discuss a possible sale of Ferro. Philip Detwiler met with Kendall and Smith in the Fall of 1984 to discuss the sale of Ferro, Philip Detwiler testified that “we discussed how the votes might go, what people would be in favor and what people would not be and the process of how we could get ... it on the agenda for the directors to take action on getting a financial firm to study it and to find possible buyers.” At his deposition, Kendall testified that he also had several discussions with Offen-becher and Smith in October 1984 regarding “how to proceed with getting something in front of the Board to see if we could move the process along or possibly getting an offer for the company.” On October 31, 1984, Smith met with Jonathan Walton (“Walton”), the head of the Trust Department at the Detroit National Bank. Handwritten notes Walton made shortly after that meeting state: [Smith] still believes need for liquidity overrides all other considerations and Board should proceed with sale. [Smith] can count on about sixty-four percent of stock including [National Bank of Detroit] to support a sale. Peter [Detwiler] will oppose, delay, obstruct.... We will set up meeting with Phil[ip] Detwiler.... Smith’s diary entries for early September through mid-November 1984 reveal that he met at various times with Kendall, Philip Detwiler, Offenbecher, Dillon Read, Freeman, and others. The entries do not indicate the substance of those meetings, however. On November 6, 1984, Smith sent Kendall a resolution to introduce at the Ferro board meeting scheduled for November 13, 1984. The resolution provided: RESOLVED, that the notice of the Annual Meeting of the Shareholders of Ferro include as part of the agenda the following: To consider options for the future course of the Company including its possible sale or merger. In his letter, Smith told Kendall: “This resolution should be presented to the Board following the report of the special committee created for the purpose of determining the needs of the corporation and the wishes of the shareholders.” The Ferro board held a meeting on November 13, 1984 at which James presented the results of the special committee’s discussions with shareholders. He stated that three families wanted to sell the Company, one did not, and one was split. At Peter Detwiler’s request, the board minutes did not refer to the November Report. The board determined that the November Report would be given to Ferro’s shareholders directly. By letter dated November 16, 1984, the special committee circulated the November Report to all directors. Kendall decided not to introduce the resolution regarding the shareholders’ Annual Meeting at the November 13, 1984 board meeting. The night before, Kendall had discussed the situation with Philip Detwiler, who left him with the impression that the Detwiler family was not sufficiently committed to a sale to go through the “stress and turmoil” Kendall knew it would create. After the November 13,1984 board meeting, Smith wrote Philip Detwiler, noting Kendall’s decision not to place a sale or merger on the agenda for the shareholders’ Annual Meeting and asking Philip Detwiler to “review this very carefully with members of your family to reaffirm their desire to sell the stock or understand that they will not give this assurance.” Philip Det-wiler replied to Smith on November 19, 1984. He expressed frustration at the request, stating: This whole matter of reviewing my family’s position is a delay that was quite uncalled for in my opinion. I do not think, nor have I ever thought, there is any likelihood any of us will reverse our position. If I had such doubts I would have made them known. When I advised my niece there were doubts as to her position ..., her indignant reply was “Do they want it in blood?’ I feel a little the same way. * * * * * * I will say it again. Peter [Detwiler] may be right. That’s an honest admission .... But only a few years down the road will provide the answer and we’ve chosen before to think otherwise. Smith’s diary entries for late November and early December 1984 indicate that Smith met at various times during that period with Offenbecher, Kendall, Smith, Crenshaw, Leslie Devereaux, Philip Detwiler, and Adelyn Devereaux. The entries contain no indication of the substance of those meetings. F. The Shareholders’ Annual Meeting Ferro held its shareholders’ Annual Meeting on December 11, 1984 (the “Shareholders’ Meeting”). In preparation, Smith drafted a script for the Shareholders’ Meeting that he sent to Offenbecher on November 30, 1984. The script called for Kendall to introduce a motion regarding the sale or merger of Ferro and for Philip Detwiler to second the motion. The day before the meeting, Offenbecher and Smith met with Kendall, Philip Detwiler, and four members of Philip Detwiler’s family. Offenbecher testified at his deposition that the meeting’s purpose was to “get a feeling for the degree of resolve that that family had in possibly pursuing the options that were available to them,” particularly regarding the sale of the Company. At the Shareholders’ Meeting, Warren Kendall presented, and Philip Detwiler seconded, the following resolution: RESOLVED, that the Board of Directors is requested and urged to authorize the President of the Company to negotiate an agreement for a transaction which would result in a favorable sale of the stock of the Company or merger of the Company, which agreement shall be subject to the approval of the Board of Directors and the stockholders. The Board is further requested to employ the services of an investment banker, preferably Dillon Read, to assist the President and the Board in this matter. Peter Detwiler spoke against the resolution, and Fred Detwiler, his nephew, questioned the resolution’s legality. Despite Peter Detwiler’s opposition, the resolution passed by a vote of 704,796 shares to 384,258 shares. The shareholders who supported this resolution included Philip Detwiler (on behalf of his family), Warren Kendall (on behalf of the Dever-eaux/Kendall family), Offenbecher, as well as Davies and Stewart (whose shares were voted by Offenbecher pursuant to proxy). Peter Detwiler and Bryant voted their family’s shares against this resolution. In his affidavit explaining his vote, Kendall stated: The family’s decision [to sell Ferro] was made because of concerns about the cycl-icality and long-term future of the Automotive division and because of our concern about having the bulk of our investments in one liquid asset. I was particularly concerned that Ferro’s Automotive division would, as a result of the trend towards systems purchases by the automobile manufacturers, become a second-tier supplier, which would put downward pressure on earnings in the future; and I expressed that view to the others. In arriving at our decision, we evaluated and considered the opinion of [Dillon Read], as stated in their report dated April 25, 1984, and summarized in their report on August 15, 1984, as well as statements of Peter Detwiler that Ferro was worth far more than Dillon Read thought it was worth. Philip Detwiler offered a similar explanation in his affidavit: [Our family] discussed [selling Ferro] approximately four times prior to the December 1984 shareholders’ meeting. Our conclusion was that if a favorable price could be obtained, we would be in favor of a sale. In arriving at that decision, my family and I considered not only the report of [Dillon Read], dated April 25, 1984, but also statements made by Peter Detwiler to the effect that the Company was worth up to $100 million, had a bright future, and should not be sold. I, and other members of my family, were concerned about the long-term security of our investment in Ferro. The Company had a history of cyclical results that carried with it certain risks. For example, following the failure to sell the Company in 1978, the shareholder families risked the loss of all or most of their investment during the downturn that occurred during the late 1970s and early 1980s. In addition, we were aware of changes in the markets which Ferro served, particularly the automotive market, which could well have made the future of the Company more of a gamble than previously. The Plaintiffs note that Philip Detwiler did not consult with his family members at the annual meeting itself before voting his family’s shares. Immediately following the Shareholders’ Meeting, the Ferro board met. At that meeting, Philip Detwiler proposed, and Warren Kendall seconded, the following resolutions: RESOLVED, that the President is authorized to proceed with negotiations for the sale or merger of the Company and to enter into a letter of intent which he deems to be in the best interest of the Company and its shareholders. Such letter of intent shall provide that it shall be subject to the approval of the Board of Directors of Ferro. RESOLVED, that the President is authorized to enter into an agreement to employ Dillon Read as financial advisor in connection with such possible sale or merger of the Company. The President is authorized to enter into a fee arrangement with Dillon Read which shall provide for a fee not to exceed lVi percent of the sales price or the fair market value of the securities received. Such arrangement may also provide for a downpayment not to exceed One Hundred Thousand Dollars ($100,000) plus out-of-pocket expenses. In the event of the consummation of a transaction, the downpayment and amount paid in reimbursement of out-of-pocket expenses shall be applied to the fee arrangement. On December 20, 1984, Peter Detwiler prepared a memorandum that he either sent to Ferro’s directors or discussed with them at a subsequent board meeting. The memorandum stated: While the Detwiler family did not agree with the decision to sell the company, once the decision has been taken by the majority of the shareholders we will strongly support that decision and work vigorously along with the Bryants to attain the highest and best deal for the company. Obviously now everyone has an identity of interest. The Bryant family shared this view. G. Retaining Dillon Read Following the December 11, 1984 board meeting, Offenbecher verbally retained Dillon Read to market Ferro. Ferro and Dillon Read executed a formal agreement on January 2, 1985. Paragraph 2 of the letter agreement provided: For Dillon Read’s services pursuant to this Agreement, the Company agrees to pay Dillon Read fees in cash as follows: a) upon execution of this Agreement, a fee of $100,000, and b) if on or prior to December 31, 1985 any person ... acquires the Company ..., a fee equal to one and one-quarter percent (1.25%) of the aggregate amount of the consideration paid to the company and/or its shareholders (the “Consideration”), less the amount paid pursuant to paragraphs 2(a) or 2(c).... c) If a Transaction is not consummated, the Company will reimburse Dillon Read, upon demand from time to time, for the expenses reasonably incurred by Dillon Read in entering into and performing this Agreement.... H. Hutton’s Initial Involvement in Selling Ferro In January 1985, Hutton prepared an analysis of Ferro (the “Hutton Report”). Based upon the “Market Valuation of Comparable Public Companies with 50% Acquisition Premium,” the “Price/Earnings Paid in Acquisitions of Comparable Companies,” and the “Multiple of Book Value Paid in Acquisitions of Comparable Companies,” Hutton valued Ferro at between $110 million and $188 million. By letter agreements dated January 23, 1985 and January 24, 1985, the Ward Det-wiler family and some members of the Bryant family hired Hutton as their financial advisor for a flat fee plus a percentage of the transaction price over $80 million. Also on January 24, 1985, Bryant met with three members of the Duffield family to persuade them to retain Hutton. Although Bryant indicated that Ferro’s estimated sale price was $150 million and that he expected many of the Kendalls and Dever-eaux to support him, the Duffields declined to retain Hutton. Using the Hutton Report, Peter Detwiler and Bryant also attempted to have Ferro retain Hutton to work with Dillon Read in selling the Company. On January 9, 1985, Bryant prepared a draft memorandum to the Ferro board proposing that the board “add E.F. Hutton to Ferro’s team by a ‘non-exclusive’ contract with the same % commission offered Dillon Read.” In addition, Peter Detwiler met with attorneys and Hutton representatives on January 23, 1984 to discuss the possibility of the Ward Detwiler and Bryant families contacting the other Ferro shareholders about retaining Hutton along with Dillon Read to sell Ferro. A draft letter prepared in January 1985 for signatures of Bryant, William Bryant, Jr., Peter Detwiler, Fred Detwiler, and George Detwiler challenged Dillon Read’s April 1984 valuation estimating Ferro’s worth at approximately $60 million. It noted that representatives of the Ward Detwiler, Bryant, Duffield, and Clark families holding thirty-six percent of Ferro’s stock had retained Hutton as their financial ad-visor and that Hutton had valued the Company at $120 to $150 million. The plaintiffs discussed the substance of this letter with other Ferro shareholders. During late January and early February the Hutton Report was distributed to, or discussed with, Philip Detwiler, Sr., Philip Detwiler, Jr., a representative of the National Bank of Detroit, Warren Kendall, Offenbecher, Davies, Dillon Read, and Fer-ro’s outside directors. On February 11, 1985, Offenbecher and Davies met with Kendall, Bryant, and Hutton representatives to discuss the Hutton Report. Offen-becher and Davies stated that the companies Hutton identified as “comparable” to value Ferro in fact were insufficiently “comparable.” In his affidavit, Philip Detwiler stated: “At the request of Peter Detwiler and John Bryant, I considered having the Company retain Peter’s firm, E.F. Hutton, to assist in the sale, but rejected that proposal because of my belief that Peter, being an officer of E.F. Hutton, would have a potential conflict of interest in connection with any representation by the Company of E.F. Hutton.” Moreover, Kendall stated in his affidavit: “Based on my own knowledge of Ferro, its markets and prospects, as well as the discussions that I personally had with Messrs. Good and Finger of E.F. Hutton, I believed that the report substantially overstated the true value of Ferro.” Ferro never retained Hutton. In the course of representing some of Ferro’s shareholders, Hutton approached several companies about purchasing Ferro. I. The 1985 Budget and the Five-Year Sales Forecasts Ferro’s 1985 Budget and five-year sales forecasts played a significant role in the selling process. i. The 1985 Budget For each of the years 1980 through 1984, Offenbecher and Davies directed Ferro’s divisions to prepare a budget reflecting sales and expenses (the “Operating Budget”) for the following fiscal year, which began September 1. The divisions prepared the budgets from May through August. Offenbecher and Davies participated in the process by touring the divisions, talking with the persons involved, and reviewing the budgets and their backup documents. Upon receiving the Operating Budgets from the divisions, Offenbecher and Davies used those budgets to prepare a budget to present to the board (the “Directors’ Budget”). The figures contained in the Directors’ Budget usually differed from those in the Operating Budget because Offen-becher and Davies found that the divisions tended to be too optimistic regarding sales. The board reviewed the Directors’ Budget, neither approving nor disapproving it. At their depositions, Offenbecher and Davies testified that the board knew the figures in the Operating and Directors’ Budgets differed, but Peter Detwiler and Bryant denied this in their affidavits. As actual results became available during the fiscal year, each division submitted those results to Ferro’s headquarters where the Accounting Department prepared monthly financial statements comparing actual results against the Operating Budget. Davies and Offenbecher reviewed these statements, then Offenbecher’s secretary sent copies to the directors. Pursuant to this process, the 1985 Operating Budget had been prepared during the summer of 1984, and the Ferro board reviewed the resulting Directors’ Budget at meetings held on September 18, 1984 and November 13, 1984. When six-month results became available, Ferro revised its budget figures. Monthly memoranda from Kruske, VWG’s president, to Offenbecher reveal that VWG’s actual sales exceeded its forecast in December 1984, January 1985, and February 1985. 2. The Five-Year Sales Forecast During 1984, management for each of Ferro’s divisions worked with H. Vincent Nelson (“Nelson”) to prepare five-year divisional marketing plans (the “Marketing Plans”) containing five-year sales forecasts (the “Division Sales Forecasts”). Nelson was a former Vice-President of Operations of Ferro who worked as a consultant for the Company in 1983 through 1985. Nelson advised division management regarding the methodology and format for the Marketing Plans, but management alone determined the numbers to include in the Division Sales Forecasts. While they were preparing the Marketing Plans, division management reported to Offenbecher regarding the plans’ progress and the types of items covered in the plans. When they were finished, Offenbecher conducted a detailed page-by-page review of the Marketing Plans. According to Kruske, this review resulted in no changes to VWG’s Division Sales Forecast. In late 1984, Offenbecher asked Nelson to analyze the Marketing Plans and Division Sales Forecasts and prepare a five-year sales forecast for each division and consolidated for the Company as a whole for FY 1985 through FY 1989 (the “Sales Forecast”). According to Nelson, Offen-becher told him to use his best judgment, and neither Offenbecher nor Davies suggested particular numbers to Nelson nor informed him of the project’s purpose. Nelson completed this project by January 15, 1985. Both Offenbecher and Davies reviewed the figures in the Sales Forecast, but deny influencing or reducing the numbers. Offenbecher presented the Sales Forecast to the Ferro board at its January 15, 1985 meeting. In response, the board passed a resolution stating: RESOLVED: That the Board of Directors review the five year forecasts, as promptly as possible, which will include sales projections, forecasted balance sheets, forecasted statements of net income, and forecasted statements of sources and applications of funds. Peter Detwiler and Bryant were critical of the Sales Forecast. In his affidavit, Kendall stated: “Based on my experience with the Company, I considered the forecasts to be optimistic.” Peter Detwiler testified that Offenbecher agreed not to distribute the forecasts to Dillon Read or any prospective purchaser, although the minutes contain no reference to this discussion. J. The General Motors Contract In early 1985, General Motors (“GM”) began searching for a supplier to design, prototype, and manufacture “total seats” for a Camaro/Firebird replacement car it planned to introduce in or after 1990 (the “GM80”). At the time, Ferro had built two total seat prototypes, one for a Cadillac and one for a Jeep. Although it had never sold a total seat to an automobile manufacturer, Ferro competed for the GM80 contract. On February 5, 1985, Ferro and GM met to discuss the GM80. Ferro included in both the Sales Forecast and the Supplemental Forecast the “total seat” sales it anticipated from the two prototypes it had developed — $6 million in 1988 to AMC Jeep and $17.9 million in sales in 1989 to AMC and one or more GM car lines. Ferro did not include in its forecasts sales attributable to the GM80 contract. Stewart, the head of Automotive, believed Ferro had little chance of being selected as the GM80 supplier. Eugene Goodson of Hoover testified that Ferro had “zero chance” of getting the GM80 contract and that Ferro’s inclusion of GM80 sales in a sales forecast would have been a “pipe dream.” In May 1985, GM selected several companies — including Hoover, Lear Siegler, and Inland — to make presentations regarding the GM80. Ferro was not among this group, but it contacted GM and GM allowed it to make a presentation. GM’s evaluations of the various presentations reveal that Hoover was the leading contender for the GM80 and that Ferro was not highly rated. Subsequently, Offenbecher decided not to pursue the GM80 contract. Hoover obtained the GM80 project, and — when GM subsequently cancelled the GM80 project — Hoover gained no sales under the program, received no replacement business from GM, and was reimbursed only half its expenses. K. The Selling Process 1. Implementation of a Controlled Auction After Ferro retained it, Dillon Read implemented a controlled auction to sell Fer-ro. Dillon Read consulted with Ferro’s board, then confidentially contacted over seventy potential purchasers that it believed might want to acquire one or more of Ferro’s divisions. Hoover’s and Hutton’s interest in acquiring Ferro developed early in the process. In a November 15, 1984 memorandum to the file, Peter Detwiler discussed the possibility of Hutton sponsoring an LBO in which Peter Detwiler’s family would participate: I have now spoken to Bob Fomon [Hutton’s CEO] through Harvey Spear an attorney working with our LBO group. E.F. Hutton may be interested in coming in and participating in putting this LBO together. We need an entity like this to sell the deal and Hutton invests its own capital in these deals to help glue the package together. Fomon seemed quite interested and I am going to talk to him as soon as I get into the office. I would try to get approximately 12% more of the company out for the family to compete for the higher tax that would be paid by “re-pricing” the stock by the Buy Out. In December 1984, after the Ferro shareholders resolved to obtain bids at the Shareholders’ Meeting, Smith — who was a Hoover director at the time — contacted Hoover to suggest that it consider buying Ferro as part of its diversification efforts. Hoover’s principal business involved manufacturing automobile seat cushions, and Hoover hoped to expand its operations to include automobile seat tracks and recliners, which Automotive manufactured. In late January or early February 1985, Of-fenbecher and Jack Daly, Hoover’s President and CEO, met over lunch to discuss Ferro. Dillon Read sent a standard confidentiality agreement and an executive summary to any prospective purchaser who expressed interest. The executive summary’s first page stated: “The management of the Company should not be contacted under any circumstances. All inquiries or requests for additional information should be addressed to Dillon Read.” Dillon Read also began a six-week due diligence review of Ferro in January 1985. This consisted of internal research regarding the Company and its markets, as well as plant visits and interviews with Company personnel, including visits to Automotive (where Dillon Read interviewed Stewart), Aerospace (where it interviewed Grimes), and VWG (where it interviewed Kruske). At Ferro’s January 15, 1985 meeting, Offenbecher discussed the prospective purchasers Dillon Read had contacted and “pertinent information concerning Dillon Read’s assignment.” On February 6, 1985, Offenbecher and Davies received copies of a draft report Dillon Read was preparing to send to prospective purchasers (the “Selling Memo”). They reviewed the draft and gave Dillon Read detailed comments concerning the draft. In its final form, the Selling Memo incorporated both the 1985 Budget and the Sales Forecast. When prospective purchasers executed the confidentiality agreement, Dillon Read sent them the Selling Memo. The Selling Memo stated: The information contained in this Memorandum has been supplied by [Ferro] and is furnished solely for use by prospective purchasers in considering their interest in acquiring the Company_ No representation or warranty is made with respect to the accuracy or completeness of this Memorandum by the Company or by [Dillon Read], nor has Dillon Read independently verified the information contained herein. At the direction of Ferro’s board, Dillon Read limited the information it disclosed to the Company’s direct competitors, such as Magna and I.T.T. Hancock, prior to gauging their interest. In addition to the Selling Memo, Dillon Read provided other information, depending upon the needs of the particular prospective purchaser. For example, Dillon Read furnished actual results for the current year. It also told those who wanted to buy less than the entire company that tax considerations required that bids for components would have to total more than a bid for the entire company to be accepted. Some of the companies who received the Selling Memo expressed interest in acquiring only one or two of Ferro’s divisions, rather than the entire company. For example, in February 1985, Ametek expressed interest in acquiring VWG and Aerospace, Fruehauf sought to acquire Automotive and Aerospace, IFI International wanted only Automotive and/or Aerospace, and SKF Industries indicated an interest in VWG and Aerospace. In early March 1985, Dillon Read required bidders to submit confidential written indications of value so it could reduce the number of prospective purchasers to five or six. It sent possible buyers further business and financial information regarding Ferro (the “Detailed Memo”), along with a form “Indication Letter” requiring the companies to indicate the amount they “would be prepared to [pay to] acquire all of the capital stock of Ferro....” Dillon Read also advised prospective purchasers that it intended to use the Indication Letters “to qualify companies for in-depth investigation of Ferro (plant tours, meetings with management, etc.)_” This request elicited fourteen indications of value for the entire company and seven indications of value for components. Dillon Read then contacted marginal bidders about increasing their indications of value, as well as other prospective purchasers to determine whether they wanted to submit an indication of value. Because the indications of value it was receiving for the entire company were the same or higher than those it was receiving for components, Dillon Read began focusing on those interested in buying the entire company, although it also maintained contact with the others in case the situation changed. Dillon Read also told those companies who wanted to buy only part of Ferro that bids for the Company as a whole had a better chance of succeeding because of the tax implications of selling the Company piecemeal. 1.T.T. Hancock, which manufactured and sold automobile seat systems, was one of the companies interested in acquiring only part of Ferro. At his deposition, Edmund M. Carpenter (“Carpenter”), head of that Company's Automotive Group, testified that he contacted Dillon Read about acquiring Automotive and to obtain further information. According to Carpenter, Dillon Read told him Ferro was “for sale in total” and declined to provide further information. Because I.T.T. Hancock was one of Automotive’s direct competitors, this refusal complied with the board’s directive that Dillon Read limit the information it distributed to direct competitors. Throughout March 1985, Ferro’s board convened frequently to review Dillon Read’s selling process and to analyze and update the Sales Forecast. The board met on March 1, March 6, March 14, March 22, and March 29 (collectively, the “March Board Meetings”). 2. Reviewing Dillon Read’s Selling Process Dillon Read representatives attended the March 1, 1985 board meeting to discuss the procedures followed, the timetable, and the status of companies contacted. At that meeting, Peter Detwiler distributed and discussed a document the law firm of Cad-walader, Wickersham & Taft (“Cadwalader”) had prepared called “Excerpts from the January 29, 1985 Decision of the Supreme Court of Delaware in the Trans Union Corporation case.” At its March 6, 1985 meeting, the board adopted resolutions to involve its outside directors in the sale process: RESOLVED: That as he proceeds to carry out the December 11, 1984, mandate of the Board of Directors to negotiate an agreement for the sale of the stock or the merger of the Company, the President shall consult with and furnish key information to a Committee consisting of R.E. Fister, W.R. James, and P.S. Mirabito, the Company’s outside Directors, or any of them where the circumstances so require, concerning those negotiations; and RESOLVED FURTHER, that each of the other Directors of the Company is urged to utilize the Committee as the medium through which his individual views and recommendations relating to the President’s negotiations are conveyed to the President. The Ferro board also considered selling the Company piecemeal. Peter Detwiler proposed the following resolution: That the President of the Corporation be and he hereby is directed to request Dillon Read and Company to advise the Corporation as to the best procedure to follow to obtain the highest possible price for the sale of the three divisions of the Corporation, either separately or together, and either for cash, securities or a combination thereof, and the likely period of time required to obtain such price. Five directors, including Philip Detwiler, James, Kendall, Offenbecher, and Smith, voted against the resolution, and it was defeated. Offenbecher and Smith opposed the resolution because they believed the term “highest possible price” was unclear. Fister abstained because he found the resolution “superfluous” — he believed Dillon Read already was attempting to obtain the best price for Ferro. The board then passed unanimously a resolution proposed by Smith that “Touche Ross & Co., Clark Klein & Beaumont, and Dillon Read advise the Board of the practical and price considerations to be considered by the Board in the sale of the Company’s operating divisions and whether it can be carried out in a reasonable time frame.” Pursuant to the board’s March 6, 1985 resolution, representatives from Touche Ross, Clark Klein, and Dillon Read met several times in mid-March to discuss the tax implications of selling Ferro’s divisions separately and to prepare a presentation to the board. In addition, Davies met with Pat Mansfield and Harvey Schatz of Touche Ross regarding Touche Ross’s presentation to the board planned for March 14, 1985. From these discussions, Touche Ross prepared a schedule showing the amount of tax recapture for depreciation and investment tax credits (“ITCs”) involved in a sale of Ferro’s separate components. On March 13,1985, the special committee met with Peter Detwiler, two Hutton representatives, and Offenbecher at Hutton’s New York office to hear Hutton’s opinion regarding Ferro’s value. At that meeting, Peter Detwiler and Hutton presented a document dated March 13, 1985 called “Ferro Marketing Strategy” setting forth various opinions as to how to sell Ferro and amend its projections. The Ferro board met again on March 14, 1985. The meeting began with a presentation by representatives from Dillon Read, Clark Klein, and Touche Ross regarding the sale of Ferro’s components. Dillon Read told the board they were identifying possible purchasers for the Company as a whole as well as its divisions and that some companies had expressed interest in acquiring one or more of the divisions. Touche Ross presented a memorandum to the board entitled “Analysis of Tax Liability From Depreciation Recapture, LIFO Reserve Recapture and ITC Recapture.” Also distributed at the March 14, 1985 board meeting was a document entitled “Factors to Consider in Sale or Merger of Ferro Manufacturing Under Various Alternatives.” The latter document — which formed the basis of the board’s discussion — identified the problems with selling the Company piecemeal as including: 1. Recapture of ITC, depreciation and LIFO reserves by Ferro prior to liquidation (estimated tax liability of approximately $13 million on a consolidated basis). 2. Must be completed in 12 months; if not, taxable at corporate level at corporate rates, then taxed to shareholders on distribution. Liquidating trust not available for operating assets. 3. Difficult to allocate debt, liabilities and LIFO reserves among divisions and subsidiaries. Any debt not assumed by purchasers must be repaid, causing cash flow difficulties. 4. Unavailability to purchaser of pooling of interest accounting treatment. 5. Significant additional accounting and legal costs (will need separate restated and audited financials). 6. Shareholder liability for residual claims. 7. Possibility that aggregate price may not be higher than would have been paid by a purchaser who could sell off unwanted parts at a favorable price. 8. If distributions are stretched over two shareholder tax years, capital gains treatment could change under a new tax bill. Offenbecher told the board that he believed Automotive would be more difficult to sell than the other divisions. At the time, he knew prospective purchasers, including United Te