The opinion of the court was delivered by: NEWCOMER
AND NOW, to wit, this 15th day of February, 1978, upon consideration of the Plaintiff's Motion for a Preliminary Injunction and after hearing the testimony of witnesses in open court, this Court makes the following findings of facts and conclusions of law, and will supplement this decision with a memorandum opinion:
1. This Court has jurisdiction over the parties and subject matter in this lawsuit under 15 U.S.C. § 78aa, 28 U.S.C. § 1331(a).
2. Venue is proper in this district under 15 U.S.C. § 78aa.
3. On January 9, 1978, Weeks Dredging & Contracting, Inc. filed a Registration Statement with the Pennsylvania Securities Commission, respecting a proposed tender offer for shares of American Dredging Company, which Registration Statement contained the Proposed Offer to Purchase by which the tender offer is to be made.
4. In January 1978, Defendant Maylin Greaser, President of American Dredging Company, made statements to the Financial Editor of the Philadelphia Evening Bulletin concerning Weeks Dredging's proposed tender offer. His statements were incorporated into an article which appeared in the Philadelphia Evening Bulletin on January 13, 1978.
5. The Plaintiff has shown a reasonable likelihood of establishing at trial that Defendant Greaser omitted material facts when he made the above-mentioned statements which rendered the statements made, in light of the circumstances under which they were made, misleading and in violation of Section 14(e) of the Securities Exchange Act of 1934, in that:
6. The Plaintiff has established that unless this preliminary injunction is issued the Plaintiff will suffer irreparable harm in that American Dredging's shareholders will be prevented from fairly evaluating the Plaintiff's offer to purchase their shares.
NOW, Therefore, the Following Preliminary Injunction is issued against the Defendants American Dredging Company and Maylin Greaser and the Defendants are ORDERED to transmit to all the shareholders of American Dredging by United States first class mail the following letter, prior to the close of business on the day following the receipt of this Order by personal service or otherwise.
I am writing to you with reference to an article that you may have seen or heard about that appeared in the Philadelphia Evening Bulletin on January 13, 1978. In that article, I was quoted as saying that the value of American Dredging stock was conservatively worth $150 per share. This valuation was based on my estimation of the value of the assets of the company on a per share basis and not on what I believed you could receive on the market today for your shares. In order for the shareholders to realize significantly more than the current market price of the shares at this time, it would be necessary for the company's earnings position to improve.
Furthermore, in the Bulletin article, I was quoted as saying that the Company was "shaping up all right." By that statement, I meant that the Company was realizing a profit this year and that that profit was the result of a settlement award in a condemnation proceeding. However, it was not meant and should not mean to you that the operating revenues from the Company's dredging business had increased; in fact, the Company has suffered an operating loss in 1977 in its dredging business.
With regard to the proposed tender offer submitted by Weeks Dredging & Contracting, Inc., you should not construe this letter as an attempt to influence you in any ...