The Second Circuit issued a summary order today affirming Judge Kaplan's refusal to enjoin the voting of the CSX shares acquired by TCI during the period of time it was not in compliance with the reporting requirements of Exchange Act Section 13(d). So that means four of the five insurgents, including TCI managing director Chistopher Hohn, will be seated on the CSX board (subject, I believe, to an ongoing challenge by CSX to certain proxies).
As I commented in my post of July 17, 2008:
"Judge Kaplan rejected all of CSX's claims that the 13D and proxy statement [filed by TCI and 3G] contained misstatements and omissions. So unless the Second Circuit panel gets inflamed by the defendants' allegedly 'egregious' conduct, I would think CSX has an uphill battle in convincing the Second Circuit to issue an injunction disenfranchising TCI/3G and 'kicking' the insurgents' nominees off the CSX board."
The brief order concludes with a statement that the panel is deciding the injunction issue alone for now, with an "opinion of the court [to] follow."
Apparently the panel deciding the case is composed of Judges Newman, Winter, and Calabresi. If that is true, then TCI/3G was fortunate in that draw, since the members (certainly Winter and Calabresi) have the background and knowledge in securities regulation and law and economics to plunge into this case without fear of the complexities of swaps.
I look forward to reading the panel's opinion. (For my previous commentary on this case, see my posts of August 23, 13, 1; July 30, 26, 17; and June 24 and 23.)
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