REALTY ACQUISITION CORPORATION, Plaintiff v. PROPERTY TRUST OF AMERICA, et al., Defendants, 1989 U.S. Dist. LEXIS 16790

Summary

Plaintiff, a realty acquisition corporation, made a partial tender offer for shares in defendant corporation, with the ultimate goal of acquiring complete ownership. Anticipating obstacles to the attempted takeover and subsequent merger, plaintiff conditioned the partial tender offer on the court invalidating defendants' poison pill provision, that is, defendants' 9.8 percent limit on stock ownership, and two Maryland corporate statutes. The court denied plaintiff's motion for partial summary judgment, and held that defendant's plan was not discriminatory in that all of defendant's shareholders were given equal protection from takeovers, including plaintiff. The business judgment rule protected the decision not to waive the limit on ownership. There was no evidence that defendants' trustees acted with gross or culpable negligence in refusing to exempt plaintiff from the ownership limit or that the trustees' conduct was in any way fraudulent.