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SEA CONTAINERS LTD. v. STENA AB

May 8, 1989

SEA CONTAINERS LTD., Plaintiff,
v.
STENA AB, ET AL, Defendants. STENA FINANCE B.V., Counterclaimant, v. SEA CONTAINERS LTD., ET AL., Counterclaim Defendants


John Garrett Penn, United States District Judge.


The opinion of the court was delivered by: PENN

JOHN GARRETT PENN, UNITED STATES DISTRICT JUDGE

 This matter is before the Court on counter-claimant Stena Finance B.V.'s ("Stena Finance") motion for a preliminary injunction. The Court heard arguments on the motion on May 3, 1989.

 The case initially came before the Court on Stena Finance's motion for a temporary restraining order. The Court denied that motion. See, Order and Memorandum, filed April 11, 1989. The Court granted Stena Finance's request for expedited discovery and briefing schedule for a preliminary injunction. See, Order filed April 13, 1989. The parties introduced numerous documents, affidavits and depositions in support of their respective positions.

 I.

 As set forth in the Sea Containers' complaint, the principal parties in this case are as follows: Sea Containers is a company organized and existing under the Companies (Incorporation by Registration) Act, 1970 of Bermuda. Its principal executive offices are located at Forty-one Cedar Avenue, P.O. Box HM 1179, Hamilton 5, Bermuda. Sea Containers is principally engaged in two main activities, both allied to ocean transportation: (i) marine container, containership, container crane and container chassis leasing and sales and (ii) ferry and port operations, primarily in the United Kingdom. As of October 31, 1988, Sea Containers had 11,780,330 shares of common stock outstanding including the shares owned by subsidiaries of Sea Containers (the "Outstanding Shares"). Those Outstanding Shares are listed on the New York, Pacific and London Stock Exchanges and are traded there and on other exchanges on an unlisted basis including the Amsterdam Stock Exchange, and are registered pursuant to Section 12 of the Exchange Act, 15 U.S.C. ยง 78l.

 Stena Finance B.V. is a corporation organized and existing under the laws of the Netherlands. Its principal offices are located at World Trade Center, Tower B, Floor 3, Strawomslyaan 321, 1077 XX, Amsterdam. Stena Finance is principally engaged in international financial and investment management. All of the outstanding capital stock of Stena Finance is held by Finance Parent.

 On March 22, 1989, Sea Containers filed this action against Stena Finance *fn1" alleging that Stena Finance's Schedule 13D was false and misleading and omitted material facts with respect to Stena Finance's intentions and plans. On March 29, Stena Finance filed its answer to the complaint and asserted counterclaims against Sea Containers, Mr. Sherwood and certain of Sea Containers' subsidiaries, alleging various violations of Bermuda law and U.S. securities law. *fn2" Stena Finance moved to amend and supplement its counterclaim, adding, among other things, a claim that two of Sea Containers' subsidiaries, Sea House and Marine Container, were engaged in an illegal tender offer.

 Stena Finance seeks a preliminary injunction requiring Sea Containers to amend their Schedule 13D, and enjoining them from acquiring or attempting to acquire or otherwise effecting any transaction in any shares of Sea Containers stock until 30 days after Sea Containers' amended filing. With respect to the relief it seeks, Stena Finance states:

 
Stena's initial Temporary Restraining Order application was premised on a claim that Sea Containers was conducting an illegal tender offer which was facilitated by the coercive impact of defendants' false Schedule 13D filing.
 
The discovery thus far does not warrant Stena to seek now a preliminary injunction premised on the tender offer claim. The harm which Stena sought to avert arising from the coercive nature of the Schedule 13D, can be alleviated now by awarding relief requiring that a truthful Schedule 13D be filed.

 Stena Finance B.V.'s Memorandum In Support of its Motion for a Preliminary Injunction ("Stena Finance's Memorandum) at 3-4, fn.

 II.

 In order to be entitled to injunctive relief, a movant must demonstrate (1) that it has a strong likelihood of success on the merits, (2) that it will suffer irreparable injury if injunctive relief is denied, (3) that other interested parties will not suffer substantial harm if injunctive relief is granted, and (4) that the public interest favors the granting of injunctive relief or, at least, that the granting of injunctive relief is not adverse to the public interest. See Washington Metropolitan Area Transit Commission v. Holiday Tours, Inc., 182 U.S. App. D.C. 220, 559 F.2d 841, 843 (D.C. Cir. 1977). In addition, "the necessary 'level' or 'degree' of possibility of success will vary according to the court's assessment of the other factors." Id. In suits alleging violations of the disclosure requirements of section 13(d), an injunction may not issue in the absence of a ...


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