Business 8th Edition by Marianne Jennings

Exercise 18

Marshall Field Co., a Delaware corporation with its principal office in Chicago, has operated retail department stores since 1852 and is the eighth largest department store chain in the United States, with 31 stores. Carter Hawley Hale (CHH), a California corporation that owned Neiman-Marcus, attempted several times to merge or take over Field's. During this time, Field's also received merger offers from Federated Department Stores and Dayton-Hudson. Still another retailer- Gamble-Skogmo-offered to acquire a 20 percent block of Field's stock to prevent a takeover. Field's turned down all offers. CHH finally offered a last-effort deal that Field's refused. CHH then began an unfriendly takeover.
In its information to shareholders, Field's suggested that independence was best, growth would continue, and stock prices would increase. These statements were doubtful, but shareholders rejected the takeover offer. CHH withdrew, and Field's stock declined dramatically. A Field's shareholder has sued for misrepresentation. Can he win? [ Panter v Marshall Field Co., 646 E2d 271 (7th Cir. 1981)]