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Business litigation regarding stock purchases will grind forward

On Behalf of | Jun 18, 2018 | Business Litigation

Litigation among businesses in Oregon and elsewhere ranges over a wide gamut of imaginable issues. Businesses, just like people, will continue to create and find conflicts that need to be resolved by the court system. One general area of business litigation involves disputes over stock purchases and attempted takeovers of publicly-traded businesses by investors.

One example of one form of this kind of dispute is occurring now between investor Gaylon Lawrence and CapStar Financial Holdings. Lawrence, who owns several financial lending institutions, built up a 10 percent stake of stock ownership in the bank holding company. The company objected on the basis that Lawrence violated several laws in the process. It is alleged that he broke securities laws and banking regulations.

CapStar filed a lawsuit against Lawrence in a U.S. District Court, arguing that he must divest himself of some of his shares. Lawrence came into that court and asked the district court judge to stay the lawsuit because of other disputes playing out in other forums, including presumably before the Securities and Exchange Commission and before the Federal Reserve. Lawrence is apparently trying to assert control over the holding company.

The court, however, sided with CapStar recently, holding that a stay would preclude the holding company from getting a full review of its claims due to getting the case mired into an indefinite delay, especially with proceedings occurring in other forums and through various potential appeals in those proceedings. The court also held that the claims in the other proceedings are not the same as those raised by CapStar. The conflict could see some form of business litigation continuing into the distant future, but the claims of CapStar in the present case are apparently capable of being reviewed independently and without inordinate delay, as the district court sees it. The conflict is one that arises among businesses or investors who are located in Oregon as well as in any other location.