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the Second Circuit began its analysis with a general overview of
the case:
At its heart, this appeal is about injury. FMC
claims it spent $220 million more on its restructuring
than it should have, and seeks to shift that cost to
Goldman because of the illegal conduct of Goldman's
employees, Brown and Brosens. FMC alleges that it is
entitled to four types of relief: first, consequential
damages based on the entire $220 million differential
between the original restructuring plan and the
consummated plan caused by Goldman's violations;
second, compensatory damages for the lost value of its
confidential information that was misappropriated and
prematurely disclosed; third, disgorgement of Boesky's
profits on the grounds that Goldman aided and abetted
his violations of Rule 10b-5; and fourth, restitution
of Goldman's $17.5 million fee because of Goldman's
breach of its contractual and fiduciary duties.
We agree with the combined decisions of district
judges Williams and Pollack that FMC has either not
alleged or is unable to prove a compensable injury.
* * * We agree that under the undisputed facts of this
case, the $220 million differential, the cost of
creating the confidential financial projections and
Goldman's fee cannot be recovered by FMC. In addition,
because FMC has failed to state a claim against Goldman
under Rule 10b-5, it cannot recover Boesky's profits.
[Id. at 260.]
The Court of Appeals for the Second Circuit discussed in
detail its reasoning for rejecting petitioner’s claim for damages
as to the $220 million differential. The court stated:
FMC seeks to recover the $220 million difference
in the amounts it paid out to shareholders under the
plan originally proposed and the one eventually
accomplished. It claims that Judge Pollack erred in
granting summary judgment because "[t]he jury could ...
reasonably conclude that Boesky's trading was a
substantial factor in the rise of the price of FMC
stock, and that the rise in the price of the stock
forced FMC to abandon its original recapitalization
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