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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1/A
Tender Offer Statement
Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
(Amendment No. 3)
and
SCHEDULE 13D/A
Pursuant to Section 13(d)
of the Securities Exchange Act of 1934
(Amendment No. 3)
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International Comfort Products Corporation
(Name of Subject Company)
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Titan Acquisitions, Ltd.
United Technologies Corporation
(Bidders)
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Ordinary Stock, No Par Value Per Share
(Title of Class of Securities)
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458978-10-3
(CUSIP Number of Class of Securities)
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William H. Trachsel, Esq.
Senior Vice President, General Counsel and Secretary
United Technologies Corporation
One Financial Plaza
Hartford, CT 06101
Tel. Number (860) 728-7000
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications on Behalf of Bidders)
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With a copy to:
Christopher E. Austin, Esq.
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
(212) 225-2000
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SCHEDULE 14D-1
CUSIP No. 458978-10-3 Page 2 of 7 Pages
1.
Name of Reporting Persons:
S.S. or I.R.S. Identification Nos. of Above Person
Titan Acquisitions Ltd.
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2.
Check the Appropriate Box if a Member of a Group (a) [_]
(See Instructions) (b) [_]
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3.
SEC Use Only
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4.
Sources of Funds (see Instructions)
AF
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5.
Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f) [_]
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6.
Citizenship or Place of Organization
Province of New Brunswick, Ontario, Canada
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7.
Aggregate Amount Beneficially Owned by Each Reporting
Person
15,809,508
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8.
Check Box if the Aggregate Amount in Row (7) Excludes
Certain Shares [_]
(See Instructions)
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9.
Percent of Class Represented by Amount in Row (7)
38.7%
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10.
Type of Reporting Person (See Instructions)
CO
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SCHEDULE 14D-1
CUSIP No. 458978-10-3 Page 3 of 7 Pages
1.
Name of Reporting Persons:
S.S. or I.R.S. Identification Nos. of Above Person
United Technologies Corporation
060570975
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2.
Check the Appropriate Box if a Member of a Group (a) [_]
(See Instructions) (b) [_]
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3.
SEC Use Only
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4.
Sources of Funds (see Instructions)
WC & OO
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5.
Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f) [_]
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6.
Citizenship or Place of Organization
Delaware
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7.
Aggregate Amount Beneficially Owned by Each Reporting
Person
15,809,508
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8.
Check Box if the Aggregate Amount in Row (7) Excludes
Certain Shares [_]
(See Instructions)
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9.
Percent of Class Represented by Amount in Row (7)
38.7%
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10.
Type of Reporting Person (See Instructions)
CO
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INTRODUCTION
Titan Acquisitions, Ltd., a corporation organized under the laws of the
Province of New Brunswick, Canada ("Purchaser"), and United Technologies
Corporation, a Delaware corporation ("Parent"), hereby amend their joint
Tender Offer Statement on Schedule 14D-1 dated June 30, 1999 relating to an
offer to purchase all outstanding ordinary shares (the "Shares") of
International Comfort Products Corporation, a corporation continued under the
federal laws of Canada (the "Company"), at US$11.75 per Share (such Tender
Offer Statement on Schedule 14D-1, the "Schedule 14D-1"). All terms defined in
the Schedule 14D-1 have the same meanings in this Amendment.
Item 10. Additional Information.
(b), (c) The following paragraph is hereby inserted after the last sentence:
The 15-calendar-day waiting period applicable to the Offer under the HSR
Act expired on July 21, 1999. The prescribed waiting period applicable to
the Offer under the Competition Act (Canada) has also expired; however, the
Minister of the federal Cabinet has not yet made a determination under the
Investment Canada Act in respect of the application submitted by Purchaser
on July 6, 1999. As discussed in Section 15 of the Offer to Purchase, the
Minister has 45 days from the receipt of such application to make his
determination and may extend this period for an additional 30 days.
(e) The following sentence is hereby inserted after the last sentence:
The complaint in the class action that had been filed against the Company
and its directors by two shareholders of the Company in the Chancery Court
for the State of Tennessee, Marshall County, Lewisburg was dismissed on the
grounds set forth in the Memorandum Opinion dated July 20, 1999.
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SIGNATURES
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
United Technologies Corporation
/s/ William Trachsel
By: _________________________________
Name: William Trachsel
Title:Senior Vice President,
General Counsel & Secretary
Titan Acquisitions, Ltd.
/s/ Ari Bousbib
By: _________________________________
Name: Ari Bousbib
Title:President
Dated July 22, 1999
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EXHIBIT INDEX
The following item (a)(10) is hereby added to the Exhibit Index:
<TABLE>
<CAPTION>
Exhibit
No. Description
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<C> <S>
(a)(10) Memorandum Opinion and the corresponding Certificate of Service, dated
July 20, 1999, issued by the Chancery Court for the State of
Tennessee, Marshall County, Lewisburg
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EXHIBIT (A)(10)
IN THE CHANCERY COURT OF MARSHALL COUNTY, TENNESSEE
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STANLEY GINKOWSKI and JEFF GRAU, )
On Behalf of Themselves and All Others )
Similarly Situated, )
)
Plaintiffs, )
Vs. ) CASE NO. 11077
)
INTERNATIONAL COMFORT PRODUCTS )
CORP., RICHARD W. SYNDER, W. MICHAEL )
CLEVY, RICHARD C. BARNETT, STANLEY M. )
BECK, WILLIAM G. DAVIS, JOHN F. FRASER, )
ROY T. GRAYDON, MARVIN G. MARSHALL, )
ERNEST C. MERCIER, DAVID H. MORRIS, )
DAVID A. RATTEE and WILLIAM A. WILSON, )
)
Defendants. )
)
MEMORANDUM OPINION
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This case has been filed by two stockholders ("Plaintiffs"), residents
of the State of Wisconsin, against International Comfort Products Corp. ("ICP")
and twelve individual members of ICP's Board of Directors. The Plaintiffs seek
to sue on behalf of a class of all of the public stockholders of ICP. The Board
of ICP approved acquisition of all of the outstanding shares of ICP by a
corporation not a party to this litigation. The Plaintiffs seek to enjoin the
transaction, have the transaction rescinded, or recover damages in the event
that the transaction is consummated. The Complaint alleges a breach of fiduciary
duties on the part of the individual directors by a failure to obtain a "maximum
price" for ICP's shares.
Procedurally, the case is presently before this trial court on a Rule 12
motion filed by all Defendants following the filing of an Entry of Special
Appearance on behalf of the Defendants for the limited purpose of challenging
jurisdiction and venue. The Defendants argue that the trial
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court does not have subject matter jurisdiction and personal jurisdiction over
the Defendants; that venue does not lie in Marshall County, Tennessee; that even
if this trial court has jurisdiction, the court should decline to exercise it on
the basis of forum non conveniens; and that the Complaint fails to state a cause
of action against the Defendants.
The Plaintiffs filed an Emergency Motion for a Temporary Restraining
Order and a Motion for Limited Expedited Discovery. The Plaintiffs have not yet
argued the former motion, but on July 9, 1999, the Plaintiffs argued the Motion
for Expedited Discovery, and the Defendants argued some of their Rule 12 issues.
It appeared to the court that the Defendants raised some serious issues as to
whether this case is filed in the proper court, and it appeared that the
expedited discovery sought by the Plaintiffs was extremely broad and would
potentially be onerous and expensive for the Plaintiffs to provide. On the other
hand, the court agreed with the Plaintiffs that delay in obtaining discovery
could very well be tantamount to having no relief available to them at all, and
some discovery was needed for the Plaintiffs to be able to respond to the Rule
12 motion.
This court proposed, and the parties accepted, what could be
characterized as a limited progression order dealing with the request for
expedited discovery and providing for piecemeal decisions by this court on the
various motions. First, the Plaintiffs were to propound discovery requests
specific to the jurisdictional and venue issues, the parties were to seek
agreement on a timetable for the responses to be provided, and a date was set
(July 14, 1999) for a conference call among the parties on the scope of and
timetable for response to expedited discovery. The Defendants also sent some
discovery during the time allowed. No intervention by the trial court proved
necessary, and most of the discovery was provided by each side with rather
extraordinary promptness and cooperation. There were, inevitably, a few
objections to the discovery sought.
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On July 16, 1999, the Defendants argued and reargued their Rule 12 issues,
having filed affidavits in support of their positions on the jurisdictional and
venue issues. The Plaintiffs were allowed to file written responses by July 17,
1999, by facsimile transmission. The Plaintiffs have filed affidavits of their
own.
The facts as they relate to the jurisdictional and venue issues appear
to have emerged rather clearly and with little controversy in the parties'
affidavits and in the informal stipulations made by counsel during the two
arguments on the Rule 12 motion. Only in the interpretation of these facts do
the parties disagree. ICP is a Canadian corporation, and the corporation
proposing to buy ICP is a Canadian corporation. The majority of the Board of
Directors of ICP must be Canadian under Canadian law, and in fact the majority
are Canadian. Board meetings of ICP were held in Canada and in New York City. As
previously stated, the individual Plaintiffs are residents of Wisconsin.
ICP owns a subsidiary, International Comfort Products Holdings, Inc.,
which in turn owns ICP (USA), a Delaware corporation. That Delaware corporation
has a manufacturing facility in Marshall County, Tennessee. ICP owns
subsidiaries which have operations in various parts of the world, but the
largest single manufacturing operation under the umbrella of ICP, a holding
company, is in fact the Marshall County operation. In summary, the only actual
connection between this litigation and Marshall County, Tennessee, is that
Defendant ICP owns an asset (a subsidiary) which owns an asset (a subsidiary)
which owns an asset (a plant) in Marshall County.
The Plaintiffs make some broad generalizations about actions occurring
in Marshall County leading up to the transaction, but a careful reading of the
parties' affidavits and interrogatory responses reveals that there is no
specific, sworn evidence to support the
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proposition that any allegedly tortious action actually took place in Marshall
County. The Affidavit of Stanley M. Beck describes in detail the actions leading
up to and accomplishing the challenged transaction by ICP. Ten people were
involved in the negotiations on behalf of ICP, members of the Special Committee
of the Board, ICP's Canadian counsel, and ICP's New York financial advisors. All
meetings were in Toronto, Canada, or New York City, and none in Tennessee. Five
of the people involved were from Canada, four from New York, one from
Pennsylvania, and none from Tennessee.
The Plaintiffs do discuss the presence of a legal staff in Marshall
County and the preparation of some documents there. However, it is unrefuted in
the sworn testimony that these were ICP (USA) employees, not employees of ICP,
and there is no evidence that these ICP (USA) employees accomplished the
allegedly tortious pricing of ICP's shares. The presence of these employees in
Marshall County only establishes that an asset of an asset of ICP had employees
in Marshall County who produced information that employees of ICP later saw.
There is no evidence to support the proposition that the separate existence of
ICP and ICP (USA) was a sham, and these two corporations must be considered
separate legal entities for purposes of deciding the jurisdictional and venue
issues here.
The first Rule 12 challenge to this trial court hearing this case is the
issue of subject matter jurisdiction. The Plaintiffs argue that the chancery
court has, from above, as it were, subject matter jurisdiction to hear cases
involving an alleged breach of fiduciary duties and that this fact should end
the inquiry into subject matter jurisdiction. The Defendants argue that Canadian
law applies; that Canadian common law does not provide a remedy for shareholders
against corporate directors; that, however, the oppression remedy of the
Canadian Business Corporation Act, provides broad relief; that the CBCA requires
that the relief be sought in
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specific Canadian courts; and that therefore this trial court does not have
subject matter jurisdiction. The Plaintiffs argue that Tennessee law can be
applied or that the Tennessee court can apply Canadian law.
The Defendants direct the court's attention to the Delaware case of
Taylor v. LSI Logic Corporation, 715 A.2d 837 (Del. 1998). In that case, a
Delaware corporation sought to buy the shares of the minority stockholders of a
Canadian corporation and to proceed with a reverse stock split as to the shares
of those who did not voluntarily sell. The Delaware Supreme Court held that it
did not have subject matter jurisdiction to hear the claim under Section 241 of
the CBCA. The Delaware Supreme Court applied the provision in the CBCA which
required that suit be brought in Canada. The Plaintiffs seek to distinguish this
case on the grounds that the plaintiff in Taylor conceded that her only claim
was under Section 241 of the CBCA, whereas the Plaintiffs in the case sub judice
claim under Tennessee law.
The Complaint did not allege the place of incorporation of ICP, and the
Plaintiffs have not chosen to amend their Complaint even after the Defendants
have repeatedly pointed out that defect. The Defendants argue that without an
allegation of a place of incorporation, there is no law to govern the
relationship between stockholders and corporate directors, and the Complaint
here therefore fails to state a cause of action. That is probably technically
correct but it is absolutely clear from the sworn evidence and the statements of
counsel that ICP is a Canadian corporation. It is the holding of this trial
court that therefore the laws of Canada, and only the laws of Canada, could
govern the relationship between these parties.
The parties have discussed the Bayberry and Amberjack cases, Tennessee
conflict-of-laws cases, not cases directly involving subject matter
jurisdiction. These cases do, however, support the proposition that the laws of
the state of incorporation, or in this case, Canada, govern
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the internal affairs of corporations, unless another state has a more
significant relationship. It is clear that the relationship between a
corporation and its shareholders and that between directors and shareholders are
internal affairs. It is also clear that there are few connections between this
transaction and Tennessee and certainly not enough to create an exception to the
internal affairs doctrine.
The Plaintiffs argue that the mere fact that Canadian law may apply does
not necessarily mean that a Tennessee court cannot apply it. The Plaintiffs cite
caselaw for the proposition that merely because a state's statute declares that
it can be enforced only in that state does not necessarily preclude another
state from enforcing the statute. These cases deal with personal injury claims,
where there was an underlying common law cause of action, however, and this
trial court holds that where there is a unique statutory cause of action and no
common law cause of action, then the cause of action must be enforced in the
state that created the remedy, or in this case, in Canada. There is no subject
matter jurisdiction in the Chancery Court of Marshall County, Tennessee, to hear
this claim.
The Plaintiffs have submitted additional evidence in the form of an SEC
filing made on July 15, 1999, which revealed an agreement between stockholders
agreeing to the sale and ICP for certain contractual matters between them to be
decided based upon Tennessee law. The Plaintiffs here were not parties to this
agreement, and the claims to which Tennessee law were to be applied were
contractual rather than tort claims. This new information does not change the
fact that the internal affairs doctrine holds that the law of Canada, the place
of incorporation of ICP, must be applied.
It likewise does not appear that venue is proper in Marshall County. No
tort has been committed in Marshall County. No Defendant has actually been
"found" in Marshall County.
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The individual upon whom the Complaint against ICP in Lewisburg was served was
not an agent for service of process or a managing agent, and she was not even an
employee of ICP, but rather was an employee of ICP (USA). Again, these
corporations are separate legal entities. It would be simple enough to secure
proper service on ICP for purposes of establishing personal jurisdiction, but it
would be more difficult to "find" an appropriate individual in Marshall County.
If this trial court had subject matter jurisdiction and venue were
proper, this would still be a case that this court should not accept on the
basis of forum non conveniens. The forum in which this case should be brought is
in Canada. While the shareholders would have to seek permission to sue on behalf
of the corporation, there is a statutory mechanism by which they could do so.
There are numerous reasons, public and private, not to have this litigation in
Marshall County. The most important witnesses concerning the transaction in
dispute would be in Canada and New York, and the expense of their travel and the
difficulty of compelling their appearance at trial argues against having this
trial in Lewisburg. The Chancery Court of Marshall County is not an ideal forum
in which to resolve a class action lawsuit potentially involving claims from
across the country and beyond our national bounds. The mere fact that Canada
does not have a common law remedy does not preclude application of the doctrine
of forum non conveniens where, as here, there is a Canadian statutory remedy
available to the Plaintiffs.
The Complaint will be dismissed on the grounds set forth in this
Memorandum Opinion. In the interest of expediting appellate review of this
ruling, Hon. Matt Sweeney is directed to generate an order incorporating the
Memorandum Opinion and to circulate it immediately by facsimile to the
appropriate counsel to seek their approval of the wording. This court will then
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entertain any request from the Plaintiffs for assistance by the trial court in
procuring the cooperation of everyone involved in securing prompt submission of
the case for appellate review. If this is an adjudication of all issues in the
case as to all parties, then Rule 9 procedures will not be necessary.
Respectfully submitted,
/s/ Lee Russell
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LEE RUSSELL, CIRCUIT JUDGE
Sitting as Chancellor, by interchange
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CERTIFICATE OF SERVICE
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I hereby certify that I have this date provided a true and exact copy by
telephone facsimile transmission and/or by placing in the United States Mail,
postage prepaid, to: Hon. George Barrett and Hon. Doug Johnston, BARRETT,
JOHNSTON & PARSLEY, 217 Second Avenue North, Nashville, Tennessee 37201; Hon.
Randall J. Baron and Hon. Darren J. Robbins, MILBERG, BERSHAD, HYNES & LERACH,
600 West Broadway, Suite 1800, San Diego, California 92101; Hon. Steven E.
Cauley and Hon. Brian J. Robbins, LAW OFFICES OF STEVEN E. CAULEY, P.A., Suite
218, Cypress Plaza, 2200 N. Rodney Parham Road, Little Rock, Arkansas 72212;
Hon. Walter W. Busssart, BUSSART & MEDLEY, 520 North Ellington Parkway, P. O.
Box 2456, Lewisburg, Tennessee 37091-1456; Hon. Matthew J. Sweeney, III and Hon.
Robb S. Harvey, TUKE YOPP & SWEENEY, PLC, NationsBank Plaza, Suite 1100, 414
Union Street, Nashville, Tennessee 37219; and Hon. Tristram Mallett, OSLER,
HOSKIN & HARCOURT, Suite 1900, Toronto Dominion Square 333, 7th Avenue S.W.,
Calgary, Alberta T20 2ZI.
This the 20th day of July, 1999.
/s/ Lee Russell
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LEE RUSSELL, CIRCUIT JUDGE
Sitting as Chancellor, by interchange
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