- 21 -
involve any adjustment, renegotiation, or revision of the
original selling price of the assets. The restrictions simply
prevented Conner Malaysia from selling the shares during the
lockup period. The restrictions did not in any way change the
value of the assets, or the aggregate consideration as stated in
the Asset Purchase Agreement, that the parties agreed upon.
Once the assets were sold, any fluctuations in the Read-Rite
stock during the restricted period were due to the fortunes of
Read-Rite and market forces and had nothing to do with the value
of the assets sold. The two transactions were not tied
together. For example, if the Read-Rite shares became worthless
during the restricted period, it would not then follow that the
assets became worthless as well. The assets had an agreed upon
value, and any subsequent gain or loss on the Read-Rite shares
had no effect on such value. As such, the fact that the
consideration for the assets was restricted stock does not
provide the requisite link for the application of the relation-
back doctrine.
Petitioner also contends that the fact that the assets were
purchased for stock, rather than cash, also provides the
requisite link to apply the relation-back doctrine. While it is
true that Read-Rite shares were ultimately received in exchange
for the assets, it is also true that a purchase price was agreed
upon and then paid in stock. The parties initially agreed to
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011