## Facts

- Hallwood Realty Partners, L.P. was a limited partnership whose units traded publicly and that operated commercial real estate.
- Various investment entities and individuals acquired Hallwood units; Hallwood alleged they acted together to obtain control.
- Hallwood had a shareholder-rights plan (“poison pill”) that imposed dilutive consequences if an “Acquiring Person” accumulated units above a 15% threshold.
- Hallwood alleged the defendants formed a coordinated “group” under Exchange Act § 13(d) to acquire and hold Hallwood units, triggering disclosure duties once the group exceeded statutory thresholds.
- Hallwood claimed the defendants failed to disclose the group’s existence and intentions in required filings, frustrating both § 13(d) disclosure and the poison pill’s protective function.
- Hallwood sought injunctive and declaratory relief, monetary damages, and demanded a jury trial.
- The district court struck the jury demand and, after a bench trial, found Hallwood failed to prove a § 13(d) group and dismissed the § 13(d) claims.

## Issues

1. Whether the district court legally erred by rejecting or improperly discounting circumstantial evidence in concluding the defendants did not form a § 13(d) “group.”
2. Whether § 13(d) implies a private cause of action for money damages in favor of an issuer, creating a right to a jury trial.

## Decision

- The Second Circuit affirmed.
- The court held the district court did not clearly err in finding no § 13(d) group; it considered direct and circumstantial evidence and reasonably found it insufficient to show an agreement to act together.
- The court held § 13(d) does not imply a damages remedy for issuers; therefore, Hallwood had no legal claim entitling it to a jury trial.
- The district court properly struck the jury demand and resolved the remaining equitable claims in a bench trial.

## Legal Principles

- A § 13(d) “group” requires a formal or informal agreement among persons to act together for purposes of acquiring, holding, or disposing of securities; the agreement may be inferred from circumstantial evidence.
- Whether a § 13(d) group exists is a fact question evaluated under the totality of circumstances; appellate review of the district court’s finding is for clear error.
- Implied private rights of action turn on congressional intent; the absence of an express issuer damages remedy in § 13(d), alongside express damages remedies elsewhere in the Exchange Act, weighs strongly against implying issuer damages.
- The Williams Act’s focus is investor protection through disclosure and neutrality in control contests; construing § 13(d) to provide issuer damages would risk converting disclosure rules into an anti-takeover damages tool.
- When an issuer’s § 13(d) claim is limited to equitable relief, there is no right to a jury trial.

## Conclusion

The Second Circuit upheld dismissal of Hallwood’s § 13(d) claims because the evidence did not establish an agreement forming a disclosure-triggering group, and it held that issuers may not recover monetary damages under § 13(d), leaving only equitable remedies and no jury-trial entitlement.


Hallwood Realty Partners, L.P. v. Gotham Partners, L.P., 286 F.3d 613 (2d Cir. 2002)