Corporation, supra, at 232. Nor, as will be discussed infra, is this type of harm irreparable. Thus, plaintiff has not met its burden of showing irreparable harm from a violation of section 14(a).
I am also not convinced that plaintiff has met its burden of showing irreparable harm under either one of its Williams Act claims. "The sole purpose of the Williams Act was the protection of investors who are confronted with a tender offer." Piper v. Chris-Craft Industries, Inc., 430 U.S. 1, 35, 97 S. Ct. 926, 946, 51 L. Ed. 2d 124 (1977). The act is not designed to assist the incumbent management of a target corporation to resist takeover attempts, but rather it is intended to insure that securities holders have adequate information concerning "the qualifications and intentions of the offering party." Rondeau v. Mosinee Paper Corp., supra, 422 U.S. at 58, 95 S. Ct. at 2075. Thus, while the management of a target corporation has been granted standing to seek injunctive relief under the Williams Act, the only purpose of the grant of standing is to allow management, who often is the only party in possession of relevant information, to protect the investor.
See e.g., Electronic Specialty Co. v. International Controls Corporation, 409 F.2d 937, 947 (2d Cir. 1969); Weeks Dredging & Contracting v. American Dredging, supra, at 477. The threatened harm that should be analyzed for the purpose of deciding whether a preliminary injunction should issue under the Williams Act, therefore, is the harm threatened to securities holders and public investors. S-G Securities, Inc. v. Fuqua Inv. Co., supra, 466 F. Supp. 1114 at 1129. Cf. Brascan Limited v. Edper Equities Ltd., 477 F. Supp. 773 (S.D.N.Y.1979).
Plaintiff contends that the harm threatened to the bondholders is that they will lose the benefit of the E.H.I. transaction. This is the type of harm which can be redressed by an action for damages by the bondholders themselves. See General Aircraft Corp. v. Lampert, 556 F.2d 90, 97 (2d Cir. 1977); Klaus v. Hi-Shear Corporation, supra, at 232; Stromfeld v. Great Atlantic & Pacific Tea Co., Inc., 484 F. Supp. 1264, 1273 (S.D.N.Y.1980). While the Lampert case involved a violation of § 13(d) of the Williams Act (15 U.S.C.A. § 78m(d) (West 1971))
what the court stated in that case is persuasive in the situation in the case at bar. The Second Circuit stated that investors "who bought or sold ... at an unfair price or in reliance upon the inaccurate Schedule 13D have an adequate remedy at law by way of an action for damages, thereby negating their entitlement to equitable relief." General Aircraft Corp. v. Lampert, supra, at 97, citing, Rondeau v. Mosinee Paper Corp., 422 U.S. 49 at 59-60, 95 S. Ct. 2069 at 2076-2077, 45 L. Ed. 2d 12.
Accordingly, assuming arguendo that defendants have violated the Williams Act, the only harm which plaintiff alleges that the bondholders will suffer can be redressed through an action for damages and injunctive relief is, therefore, inappropriate under § 14(d) and § 14(e), as well as under § 14(a). Rondeau v. Mosinee Paper Corp., supra, at 60, 95 S. Ct. at 2076.
2. Reasonable Probability of Success on the Merits
As a further ground for denial of preliminary injunctive relief, plaintiff has not satisfied me that it has a reasonable probability of success on the merits of its federal securities law claims.
The 14(a) and 14(d) Claims
Section 14(a) of the Exchange Act of 1934 and § 14(d) of the Williams Act, 15 U.S.C.A. § 78n(a) & n(d) (West 1971) are designed to regulate different types of transactions. Section 14(a) makes it unlawful for any person to solicit proxies or consents in contravention of the regulations promulgated by the SEC.
Section 14(d) makes it unlawful for a person to make a tender offer for certain equity securities without filing a statement disclosing specified information to the Commission.
Although differing in their regulatory purposes, both of these sections explicitly state that they are applicable only when the security with which the transaction is concerned is a security registered pursuant to § 12 of the Act. 15 U.S.C.A. § 78l (g).
It is undisputed that the Horizon Hospital, Inc. bonds are not traded or listed on any national stock exchange. Accordingly, the registration requirements of § 12(g), 15 U.S.C.A. § 78l (g), which concerns unlisted securities are applicable. Section 12(g)(l ), however, requires only equity securities to be registered. Therefore, unless the Horizon Hospital, Inc. bonds are equity securities, the provisions of neither § 14(a) nor § 14(d) are applicable to the transaction in this case. See Henry Heide, Incorporated (1972-73 Transfer Binder)Fed.Sec.L.Rep. (CCH) P 78,838 (1972).
The Exchange Act defines an equity security as
any stock or similar security; or any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any such warrant or right; or any other security which the Commission shall deem to be of similar nature and consider necessary or appropriate, by such rules and regulations as it may prescribe in the public interest or for the protection of investors, to treat as an equity security.
15 U.S.C.A. § 78c(a)(11) (West 1971).