Such treatment would have afforded warrantholders a windfall of accrued interest not provided common shareholders. No equitable or other grounds exist for excluding the plaintiff from asserting a claim with respect to all plaintiff's 129,880 Warrants, including those acquired by plaintiff after the announcement of the merger. All other claims asserted by the plaintiff are dismissed as being without merit.
Since the defendants breached the Warrant Agreement, the question becomes the extent to which plaintiff was damaged by that breach. Upon payment of the exercise price of $ 36.75 per warrant plaintiff was entitled to receive three components of value. Plaintiff's Warrants entitled him to be offered 2.57 shares of ADVO, a $ 20.75 high yield bond dated on the day of exercise, and $ 1.50 in cash upon exercise. Defendants breached the Warrant Agreement because they did not offer plaintiff the $ 1.50 in cash or its equivalent.
Plaintiff claims that this breach caused his Warrants to be "underwater," or uneconomical to exercise when he attempted to do so near their date of expiration. In other words, plaintiff claims that had defendants offered him the $ 1.50 in cash, the total consideration offered would have exceeded the exercise price and he would have made a profit by exercising the Warrants.
Thus, the maximum amount which plaintiff could be damaged is $ 1.50 for each Warrant. Awarding any more than this amount would not be justified. If the package of consideration offered exceeded the exercise price by over $ 1.50 at any time up until the date of expiration, then plaintiff could have realized a profit immediately upon exercise, even absent the $ 1.50. Under these circumstances, plaintiff's duty to mitigate his damages would have required him to take the profit which was being offered to him at that time and bring suit based on the elements of value which were wrongfully denied him. See Air Et Chaleur v. Janeway, 757 F.2d 489 (2d Cir. 1985). On September 15, 1989, the final date on which plaintiff could have exercised his Warrants, his maximum damages were $ 1.50 for each Warrant he held as of that date. Plaintiff cannot sue based on the value of 2.57 shares of ADVO for the simple reason that ADVO was always part of the package which he was offered.
This Court will award $ 1.50 on each of plaintiff's 129,880 Warrants, the maximum amount to which plaintiff would be entitled. It is not possible to place an exact value on the package to which plaintiff was entitled on September 15, 1989. Although ADVO was trading at 9 5/8, there was no market established for the Warrants themselves or the high yield debentures.
Where a breach of contract has clearly been shown and plaintiff has been damaged by the defendants' breach "doubts should be resolved against the wrongdoer" in calculating the amount of damages. Olympia Equip. Leasing v. Western Union Telegraph, 797 F.2d 370, 383 (7th Cir. 1986). See also, Eureka Ins . Corp. v. Chicago Title Ins. Co., 240 App. D.C. 88, 743 F.2d 932, 942 (D.C. Cir. 1984). The plaintiff cannot be penalized because he cannot prove with precision the exact amount of his damages. The defendants having breached their contract with the plaintiff, must accept responsibility for any failure in proof. Therefore, plaintiff will be awarded $ 1.50 per Warrant for a total of $ 194,820. A judgment will be entered in that amount and defendants will also be ordered to pay costs and interest.
Stanley Sporkin, United States District Court