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This section contains the nature of the case and procedural background.

Emerson (P) owned 13.2% of D corporation shares. This resulted from P's attempted acquisition of Dodge Manufacturing Co. The purchase price of the stock was $63 per share. A short time thereafter, the shareholders of Dodge approved a merger with Reliance Electric Co (D). P then sold 37,000 shares of Dodge common stock at $68 per share. This sale reduced holdings under the 10% mark for liability under section 16(b). The remaining shares were then sold to Dodge at $69 per share. P got rid of its holdings in two sales both of them within six months of purchase. The first sale reduced P's holdings to 9.96% and the second disposed of the remainder. P filed a declaratory action to determine its liability. The issue before the court was whether the profits from the second sale were recoverable under Section 16(b). The district court held P liable for the entire profits from both sales. The court of appeals reversed.

The legal issues presented in this case will be displayed here.

Legal analysis from Dean's Law Dictionary will be displayed here.