KEVIN B. KIMBERLIN, INNO CO., SPENCER TRASK HOLDINGS, INC., LAURA M. MCNAMARA, and KEVIN KIMBERLIN L.P., Plaintiffs, - against- CIENA CORPORATION, PATRICK H. NETTLES, JON W. BAYLESS, MICHAEL J. ZAK, and BERRY CASH, Defendants., 1998 U.S. Dist. LEXIS 14366

Summary

The initial investors claimed that the corporation breached its contractual duties and that the corporation and the newer and larger investors (newer investors) violated the federal securities laws, §§ 10(b) and 20(a) of the Securities Exchange Act of 1934, codified at 15 U.S.C.S. §§ 78j and 78t, by misrepresenting or withholding material information. The initial investors also claimed a breach of fiduciary duty against the newer investors. The corporation filed two counterclaims against the initial investors claiming that their purchase of Series C stock needed to be rescinded. The initial investors filed a motion for summary judgment on liability as to the contract claims. The newer investors filed a cross-motion for summary judgment. The court held that: 1) its role on a motion for summary judgment was not to resolve disputed issues of fact but to assess whether any factual issues needed to be tried; and 2) the validity of a waiver of first refusal rights precluded the initial ...