1111, 1114 n.1 (1981). It is possible to conclude that the failure to describe the apparently critical importance of the Perlmans is a material omission because, if shareholders were aware of this cost of the transaction to the corporation, they may choose to support another alternative, that of selling the New Jersey operations. n*
The final point on the merits is the failure to disclose the existence of an offer from Resorts International to purchase the Perlmans' shares. In a press release dated December 15, 1981, it was announced that the Perlmans rejected an offer from Resorts because the price agreed upon with Caesars was higher. Defendants' Exhibit 3. The Resorts offer was approximately $ 16.50 per share. Counsel for the Perlmans reported this development to the New Jersey Casino Control Commission on December 15, 1981.
Plaintiffs strenuously argue that this offer should have been disclosed in the proxy statement or correcting materials, to indicate to shareholders that they are not restricted to only two unappealing options: buy out the Perlmans at a high cost to Caesars or lose the New Jersey casino license. The Resorts offer represents a potential third option which shareholders may find the most desirable. Plaintiffs assert that the nondisclosure of the Resorts' alternative is a material omission. Cf. Kohn v. American Metal Climax, Inc., 322 F. Supp. 1331 (E.D.Pa.1971), aff'd, 458 F.2d 255 (3rd Cir.), cert. denied, 409 U.S. 874, 93 S. Ct. 120, 34 L. Ed. 2d 126, 93 S. Ct. 132 (1972) (failure to disclose possibility of alternative plans and creating the impression that the plan presented was the only viable one held materially misleading); U. S. Smelting, Refining & Mining Co. v. Clevite, 1969-70CCH Fed.Sec.L.Rep. P 92,691 (N.D.Ohio 1968) (proxy statement failed to disclose alternative merger proposals. Such alternatives were of great materiality, particularly where "the other definitive proposal or proposals may be of greater advantage to the shareholders than the one submitted by management").
Defendants respond, first, that the defendants are under no obligation to disclose "every conceivable alternative" or the "panoply of possible alternatives," citing Umbriac v. Kaiser, 467 F. Supp. 548 (D.Nev.1979) and Allen v. Penn Central Co., 350 F. Supp. 697 (E.D.Pa.1972). Second, defendants characterize the Resorts offer as a "tentative interest or inquiry," "casual" and "preliminary" discussion, which was not sufficiently concrete as to require disclosure. See, e.g., Scott v. Multi-Amp Corp., 386 F. Supp. 44, 65 (D.N.J.1974). Plaintiffs' authority, U. S. Smelting, supra, defendants argue, is distinguishable because it involved a definitive, firm offer.
At this point in this case, we are unable to determine whether or not the Resorts offer was firm, tentative, or somewhere in between. We can say, however, that if it is found to be a reasonably realistic proposal, the failure to mention it in the proxy statement would be a material omission. We consider that such an offer could be of importance to a shareholder in determining how to vote the proxy.
On the basis of the foregoing, we find that plaintiffs have satisfied the first of the four criteria for temporary injunctive relief. As to the remainder of plaintiffs' arguments, at this point, we do not believe that plaintiff has demonstrated a likelihood of success on the merits. Without prejudging or foreclosing those claims, we do not find it necessary to discuss them in detail at this stage.
II. Irreparable Harm.
But even a strong showing of probable success does not entitle plaintiffs to immediate injunctive relief. There must also be a showing that the corporation, on whose behalf plaintiffs sue, will suffer irreparable harm if the relief requested is not granted. A. O. Smith Corp. v. F.T.C., supra; Joseph Bancroft & Sons Co. v. Shelley Knitting Mills, 268 F.2d 569 (3rd Cir. 1959). It is proper to deny preliminary injunctive relief solely upon a finding that irreparable harm has not been demonstrated. Oburn v. Shapp, 521 F.2d 142, 151 (3rd Cir. 1975), citing Commonwealth of Pennsylvania ex rel. Creamer v. U. S. Dep't of Agriculture, 469 F.2d 1387, 1388 (3rd Cir. 1972).
Irreparable injury is "substantial injury to a material degree coupled with the inadequacy of money damages." Judice's Sunshine Pontiac, Inc. v. General Motors Corp., 418 F. Supp. 1212, 1218 (D.N.J.1976); Tully v. Mott Supermarkets, Inc., 337 F. Supp. 834, 850 (D.N.J.1972). "Mere injuries, however substantial, in terms of money, time and energy necessarily expended in the absence of a stay, are not enough. The possibility that adequate compensatory or other corrective relief will be available at a later date, in the ordinary course of litigation, weighs heavily against a claim of irreparable harm." Judice's Sunshine Pontiac, supra, 418 F. Supp. at 1222, quoting Virginia Petroleum Jobbers Association v. F.P.C., 104 U.S. App. D.C. 106, 259 F.2d 921, 925 (D.C.Cir.1958). Where money damages are sufficient to compensate the injured party, there is no irreparable harm. A. O. Smith Corp. v. F.T.C., supra, 530 F.2d at 525.
The plaintiffs' fundamental objection to the proposed purchase is that the price per share is too high. This dispute is, at bottom, one about money, and a legal remedy of money damages is available and adequate. The action that is expected to be taken at the meeting on December 29, 1981, the approval of the purchase, and the closing on the agreement the following day, do not present a threat of irreparable injury. If the proxies are ultimately found to be defective, the court may set aside the transaction, order a re-solicitation of proxies, or grant any other necessary relief. See, e.g., J. I. Case Co. v. Borak, 377 U.S. 426, 433, 84 S. Ct. 1555, 1560, 12 L. Ed. 2d 423 (1964) (Section 14(a) empowers court to order recission, to secure restitution, and even to "enforce the right of restitution against a third party."). To allow the meeting and vote on the proposal to proceed in the face of misleading proxy materials does not in and of itself work an irreparable injury on the party challenging the materials. So long as the court is able to "unscramble" this transaction, we can foresee no irreparable injury to the corporation. See Plant Industries, Inc. v. Bregman, 490 F. Supp. 265 (S.D.N.Y.1980).
We do not agree with plaintiffs' view that closing on the sale will result in damage to the corporation that cannot be undone. We find most of plaintiffs' predictions of harm to be speculative at best, for example, that the deal will have a "chilling effect" on other, unknown potential buyers of the Perlmans' stock. Likewise, the discussion at oral argument about the creation of a new control situation of the corporation, and an attendant disincentive to potential take-over bidders, if any surface, seems rather remote.
The structure of the proposed sale is an exchange of all of the Perlmans' shares for close to thirty million dollars in cash and the remainder of the purchase price in notes, to be paid in six equal annual installments commencing in January 1983. Plaintiffs' suggestion that the immediate cash payment will "adversely affect the corporation's development prospects" has not been proven to the court's satisfaction. As defendants point out, it is possible that the purchase will enhance the company's borrowing power, by removing the cloud of uncertainty that has hung over Caesars since the Commission's order in October 1980. The argument that the Perlmans may invest the initial payment of thirty million in some irretrievable manner does not dissuade the court from denying the restraining order. This risk is run in every case where plaintiffs seek damages. There are well-established methods for enforcing a judgment, if one is eventually rendered in plaintiffs' favor.
The only real suggestion of possible irreparable harm was made by counsel at oral argument, that if the Perlmans negotiated Caesars' notes to a holder in due course, the corporation would be irrevocably obligated to pay the third party, and the transaction could not be effectively undone. The defendants responded by stating that any potential holder of notes of this magnitude would be of such sophistication as to have knowledge of their disputed status. While there has been no showing that such negotiation will indeed take place, we believe it is prudent to ensure the court's remedial avenues by requiring defendants to notify any such third parties regarding this litigation. In this way, we protect the plaintiffs and foreclose the possibility of a holder in due course whose rights could hamper remedial action or, alternatively, whose rights might be unfairly prejudiced by a final order of recission.
Having reached the conclusion that the request for a temporary restraining order must be denied due to the lack of irreparable harm, it is unnecessary to analyze the remaining criteria for immediate injunctive relief. An order has been entered on December 28, 1981 denying plaintiffs' application and directing that defendants give notice in accordance with this opinion.
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