Schreiber v. Burlington Northern, Inc.

Burlington (defendant) launched a hostile tender offer for El Paso Gas at $24 per share; after El Paso's management came around to supporting it, Burlington rescinded that offer and made a new one to buy shares directly from both El Paso and its shareholders at the same price, this time disclosing golden-parachute agreements with El Paso managers, resulting in heavy oversubscription and proration of the per-share payout. Schreiber (plaintiff), representing similarly situated shareholders, sued Burlington, El Paso, and its board, alleging their conduct across the two tender offers was manipulative and that they failed to disclose the golden parachutes, in violation of § 14(e) of the Securities Exchange Act; the district court dismissed for failure to state a claim, and the Third Circuit affirmed.