postpone the annual meeting ten days in order to give PTC shareholders adequate time to review and consider the corrected proxy materials. A hearing on the preliminary injunction was set for June 13.
Meanwhile, the Executive Committee of the PTC Board met on June 12. At that meeting, the Committee, consisting of three of the eleven-member Board, rescheduled the annual meeting of the shareholders from June 17 to June 27, 1986. Because the Committee chose to retain the April 21 record date which was sixty-seven days prior to the rescheduled meeting date, it voted to amend Article II, Section 13 of the Company's by-laws to permit the Board to fix a record date of up to seventy-five days (instead of sixty) prior to the date of any meeting of shareholders.
After the Executive Committee meeting, during the course of the day on June 12, all of the other PTC directors were advised by separate telephone calls from John M. Kriak ("Kriak"), Secretary of PTC, of the action taken that day by the Executive Committee, and all of those board members indicated assent to that action.
Also on June 12, supplemental proxy materials were disseminated by the Board to shareholders of record as of April 21, 1986. The supplemental materials gave notice of the postponement of the annual meeting and advised the shareholders in all particulars regarding the MTH overtures and the pending litigation in New York.
Because PTC had complied with MTH's demands to disseminate corrected proxy materials and to reschedule the annual meeting date, MTH withdrew its motion for a preliminary injunction in the New York Action.
Subsequently, at a regular meeting of the Board on June 17, 1986, all eleven members of the Board unanimously ratified the Executive Committee action of June 12.
At the rescheduled annual meeting of PTC shareholders on June 27, 1986, the shareholders elected management candidates to the Board and approved both of the anti-takeover amendments to the Company's Articles.
Plaintiffs seek to invalidate that meeting and the action therein taken.
A threshold issue which we must dispose of is the defendant's contention that plaintiffs should be judicially estopped in the instant action because the relief which they seek here is inconsistent with that which they sought and received, by defendant's concession, in the New York Action.
In the New York Action, the plaintiffs demanded that the defendant send corrected proxy materials to its shareholders and postpone the annual shareholders' meeting for ten days. As stated, supra, the defendant conceded this, and plaintiffs then withdrew a pending motion for such preliminary injunction relief.
We do not agree with the defendant, however, that the relief which plaintiffs' seek here is so inconsistent with that which they demanded and received in the New York Action that plaintiffs should be judicially estopped in the instant suit under the principles set forth in Scarano v. Central R. Co., 203 F.2d 510, 513 (3d Cir. 1953), and the other authorities cited by the defendant in its main brief.
In this suit, plaintiffs challenge the validity of the Company's record date by-law. Plaintiffs did not expressly or impliedly concede the validity of that by-law in the New York Action -- that simply was not an issue.
Plaintiffs sought and received a postponement of the PTC annual shareholders' meeting in the New York Action. But they certainly did not seek the retention of the April 21 record date, which is at the heart of the controversy in the instant suit.
The validity of the purported amendment on June 12 of the record date by-law is one of the principal issues in the case sub judice, yet it had not even occurred when the New York action was filed, and, of course, was not an issue there.
The ratification of the purported amendment of the record date by-law, which plaintiffs so hotly contest here, was not an issue in the New York Action. Indeed, plaintiffs were not even aware of the first of the defendant's three attempts at ratification until after plaintiffs withdrew their application for a preliminary injunction in the New York suit. And, of course, the proxy materials at issue in New York were never an issue in this suit.
Accordingly, we hold that the defense of judicial estoppel has not been established.
Validity of Article II, Section 13 of PTC By-Laws
Plaintiffs challenge the legality of the PTC by-law and the purported amendment thereof, which authorizes the Board to fix a record date for the determination of those shareholders who are entitled to notice of, and to vote at, the annual shareholders' meeting.
The existing by-law, found in Article II, Section 13 of the Company's by-laws, provides in its pertinent part as follows:
Section 13. Determination of Shareholders of Record.