CHICAGO (HedgeWorld.com)–Judge Patrick E. McGann gave the Chicago Board of Trade an important victory last week, deciding against the plaintiffs in a class-action lawsuit involving its demutualization.
The lawsuit was filed by some of the associate members of the exchange, who had alleged a breach of fiduciary responsibility in the allocation of shares in CBOT’s demutualization plan.
Judge McCann’s decision granted what is known as “summary judgment” to the defendant CBOT. This means that he found that the plaintiffs had not made a preliminary showing sufficient to require a full trial or, in other words, that there was no genuine material issue of fact for a trial to resolve.
On Aug. 9, the day after the decision, Nickolas J. Neubauer, chairman of the CBOT, wrote the membership declaring his satisfaction. “Since the outset of this litigation,” he wrote, “we have been confident that the court would ultimately hold that the 1,402 CBOT full members do not owe fiduciary duties to other members. The decision removes one of the last impediments to going forward with our restructuring transactions.”
Counsel for plaintiffs, Barry Rose and Michael D. Richman of Sachnoff & Weaver, Ltd., Chicago, could not be reached for comment on the possibility of plans to appeal.
Donna Welch, of Kirkland & Ellis, one of the attorneys for the defendants, said Tuesday that the plaintiffs have 30 days to appeal. She declined to predict whether they would.