Field v. Trump

Julius and Eddie Trump (defendants) agreed to acquire Pay'n Save through a tender offer at $22.50 per share followed by a merger at that price. When two dissenting directors, Stroum and Sloan, criticized the deal, the Trumps announced they were withdrawing the tender offer to negotiate with them directly, and the same day, struck a deal to buy Stroum and Sloan's shares for the equivalent of $25 per share (a $23.50 nominal price plus expense payments). The next day, Pay'n Save's board announced the Trumps would open a new tender offer at $23.50 for everyone else. A shareholder (plaintiff) who tendered at $23.50 sued, alleging this scheme violated the SEC's tender-offer best-price rule by effectively paying Stroum and Sloan more than other shareholders. The trial court dismissed the claim, reasoning the best-price rule stopped applying once the original tender offer was withdrawn. The shareholder appealed.