CORPORATIONS - PROXY STATEMENT - NECESSITY FOR DISCLOSURE OF ALTERNATIVE PLANS AND OF MOTIVE IN SOLICITATION

The management of a corporation solicited proxies to support a proposed recapitalization plan, submitting data from which the inference could be drawn that the plan was designed to perpetuate the management. A stockholder sued to enjoin the holding of a special meeting and the use of the proxies obtained, on the grounds that failure to present possible alternatives to the proposed plan and failure to state that its purpose was to perpetuate the management were violations of Rule X-14A-5 of the Securities and Exchange Commission. Held, injunction denied. Doyle v. Milton, (D.C. N.Y. 1947) 73 F. Supp. 281