According to the docket, on September 25, 1997, the Court entered the Memorandum And Order that Defendants' motioned to dismiss is granted; Counts I and II of the Amended Complaint are dismissed; Count III (The State Law Claim) is dismissed without prejudice; plaintiff's Motion to be Appointed Lead Plaintiff and for Appointment of Lead and Co-Lead counsel, and plaintiff's Motion for Class Certification are denied as moot. Case is closed.
According to the closing Order, dated September 24, 1997, the court held the stockholder failed to state a viable securities fraud claim under § 10(b) and Rule 10b-5, as a matter of law. The stockholder failed to state a claim that the alleged omissions were "material." Moreover, the corporation and its officer were not under a duty to disclose another railroad's preliminary and rejected overtures. Because the stockholder failed to state a claim under § 10(b), it followed the stockholder failed to state a "controlling person" claim against the corporation's officer under § 20(a). The court granted the motion to dismiss the corporation and its officer and dismissed the stockholder's amended complaint. The stockholder's motion to be appointed lead stockholder and for appointment of lead and co-lead counsel and the stockholder's motion for class certification were denied as moot.
On June 13, 1997, plaintiff Barry Berkowitz filed an Amended complaint.
The original complaint alleged that Conrail and Conrail's Chairman, President and Chief Executive Officer violated the federal securities laws by issuing false and misleading statements which omitted material facts regarding communications by Norfolk Southern Corp. concerning Norfolk Southern's interest in entering into a business combination, such as a merger or acquisition, with Conrail. Instead, Conrail announced its agreement to merge with CSX Corp. in a transaction that would pay Conrail shareholders a combination of CSX stock and cash with a blended value of approximately $89.00 per Conrail share. Conrail did not disclose the fact that Norfolk Southern had, over the last two years and as recently as September and October of 1996, expressed its interest in merging with or acquiring Conrail.