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plan." In seeking to recover the additional amounts
paid to its shareholders, FMC overlooks one important
circumstance: because the excess amounts inured to the
benefit of FMC's shareholders, FMC cannot claim that it
was injured thereby.
FMC's restructuring involved, on the one hand, a
pro rata distribution of corporate assets to the public
shareholders in return for their surrender of a portion
of the publicly held equity. The management
shareholders, in contrast, would maintain their current
equity holdings with "the result being, of course, that
management would end up with a larger proportionate
share of the reduced total equity investment in FMC."
FMC, 825 F. Supp. at 633. Aside from the purpose of
discouraging takeover bidders by simultaneously
increasing the percentage of shares held by management
and FMC's debt-to-equity ratio, the economic effect of
the transaction essentially was a wash--a zero sum
transaction in which there were no special preferences
afforded or profits to be made. By design every
shareholder was supposed to receive identical
consideration for each share given up in an amount
equal to the value of each share. [Id. at 260-261.]
The court did note initially that FMC cannot claim injury
because the additional cash payment inured to the benefit of its
shareholders. Id. at 261. This was the basis for the District
Court's dismissal of FMC's securities law claims. FMC Corp. v.
Boesky, 727 F. Supp. at 1190. However, the Court of Appeals for
the Second Circuit's decision did not rest, as alleged by
petitioner, on a legal theory of equivalence between a
corporation and its shareholders. The court explained:
FMC's duty was to provide FMC public shareholders with
consideration equal in value to that received by the
management shareholders, and to disclose fully all
information relevant to the public shareholders'
evaluation of the deal. As Judge Pollack put it, FMC
had no legitimate interest "in short-changing the
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