Kahn v. Tremont Corp. et al.

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In this case involving a related-party transaction, the plaintiff alleged that a stock repurchase plan inflated the price Tremont paid for stock in NL Industries.

Retained by Bartlit Beck Herman Palenchar & Scott and by Thompson & Knight

In this case involving a related-party transaction, the plaintiff alleged that a stock repurchase plan inflated the price Tremont paid for stock in NL Industries. The plaintiff further alleged that the Tremont Board of Directors Special Committee set up to review the transaction should not have approved it.

The court found that “the evidence establishes the entire fairness of the transaction to the Tremont shareholders.”

Cornerstone Research worked with defense experts, Stanford University professor William Beaver and Harvard University professor Jay Lorsch. Professor Beaver’s testimony focused on the stock market reaction to the transaction announcement and the stock repurchase program’s effect on the price of the repurchased stock. Professor Lorsch testified about the role and performance of the Board of Directors Special Committee. The court found that “the evidence establishes the entire fairness of the transaction to the Tremont shareholders,” and denied “plaintiff’s request for equitable rescission of the stock purchase transaction and rescissory damages.”

Case Expert

William H. Beaver

Joan E. Horngren Professor of Accounting, Emeritus,
Stanford Graduate School of Business