Overview
In an opinion today, Judge Stanton appeared inclined to dismiss a suit by billionaire Ron Burkle challenging his being voted off the board of Morgans Hotel Group. Burkle contends that the a press release issued by OTK Associates before the vote falsely suggested that two leading proxy advisory firms supported replacing the entire board, including him. Judge Stanton agreed the press release was incorrect, but observed that news reports corrected the error:
[F]ive news articles expressly disclosed and addressed the actual reports which the OTK press release had misrepresented, and made clear to the public that [the proxy advisory firms] endorsed electing three of OTK's candidates to the Morgans board rather than voting the entire incumbent board out of office. So far, it seems clear that the misleading effect of OTK's press release (which claimed [the proxy advisory firms] "decisively advised" shareholders to vote for OTK's entire slate of seven nominees) was dissipated and counteracted by those reports, which were widely disseminated and supplied the "total mix" of information that their press release omitted.Instead of dismissing the case, however, Judge Stanton converted the defendants’ motion to dismiss into a motion for summary judgment and invited further submissions.
