June 12, 2008

The CSX Opinion is In!

Yesterday, in CSX Corp. v. The Children’s Investment Fund Management, Judge Lewis Kaplan of US District Court (SDNY) delivered his anxiously awaited opinion finding that the two plaintiff activist funds violated the securities laws by not disclosing their positions and intentions many months before they did.

However, Judge Kaplan also ruled that there was nothing effective that he could do and he didn’t bar the funds from voting their shares at CSX’s upcoming annual meeting. And in his fine analysis, Professor Steven Davidoff notes that its unlikely the SEC will pursue an enforcement action given the letter submitted to the court from Corp Fin. Here is a NY Times article – and here is a WSJ article.

Here is an additional tidbit – the NY Times’ Andrew Ross Sorkin wrote his column Tuesday about how CSX is a case study in how not to respond to a proxy fight…