## Facts

- Florida Commercial Banks, Inc. (the issuer/target) alleged that Hugh F. Culverhouse, Sr. accumulated more than 5% of its common stock beginning in 1981 and filed a Schedule 13D, later filing multiple amendments as he continued purchasing shares.
- In August 1984, Culverhouse commenced a tender offer seeking enough shares to obtain control (approximately 54.8%) and filed a Schedule 14D-1 tender offer statement.
- The Bank alleged Culverhouse acted with an unidentified “John Doe Group” in a plan to acquire control and later resell the Bank or effect a transaction with another financial institution.
- The Bank claimed Culverhouse’s Schedule 13D filings and tender offer materials contained material misrepresentations and omissions, including failure to disclose non-investment intentions and negotiations for resale, and numerous additional alleged misstatements in tender offer documents distributed to shareholders.
- The Bank sought injunctive relief requiring corrective disclosures and halting the tender offer until compliant disclosures were made.

## Issues

1. Whether Exchange Act §§ 13(d), 14(d), and 14(e) permit an implied private cause of action by a target/issuer corporation to seek injunctive relief compelling corrective disclosures for allegedly false or misleading tender offer and related filings.
2. Whether the issuer/target corporation has standing to sue under those provisions when the alleged injury concerns shareholder disclosure during a tender offer.

## Decision

- The Eleventh Circuit reversed the district court’s dismissal.
- The court held that a target/issuer corporation has standing under §§ 13(d), 14(d), and 14(e) to seek injunctive relief and corrective disclosure for materially false or misleading tender offer materials and related filings.
- The case was remanded for further proceedings consistent with recognition of the issuer’s ability to pursue this disclosure-focused relief.

## Legal Principles

- The Williams Act disclosure provisions (including §§ 13(d), 14(d), and 14(e)) are aimed at ensuring timely, truthful information to shareholders faced with significant accumulations of stock and tender offers.
- An implied private right of action for injunctive relief and corrective disclosure may be recognized to further the statutory disclosure objectives when timely enforcement is necessary.
- A target/issuer corporation can be an appropriate plaintiff to police disclosure violations affecting its shareholders because it is positioned to identify inaccuracies and to seek prompt relief during a tender offer timeframe.
- Injunctive relief compelling corrective disclosures is consistent with the statutory design when the goal is informed shareholder decision-making rather than post hoc damages.

## Conclusion

The Eleventh Circuit concluded that a target issuer may sue under Exchange Act §§ 13(d), 14(d), and 14(e) for injunctive relief requiring corrective disclosures during a tender offer, reversing dismissal for lack of standing and remanding for further proceedings.


Florida Commercial Banks, Inc. v. Culverhouse, 772 F.2d 1513 (11th Cir. 1985)