Justin Industries, Inc. v. Choctaw Securities, L.P.

I

Sutherland Lumber-Southwest, Inc. (Sutherland), is seeking to acquire Justin Industries, Inc. (Justin), in a hostile takeover. As part of its takeover defense, Justin adopted a supermajority provision in its bylaws that made it difficult to remove its directors. Justin failed to disclose its amendments in several filings with the Securities & Exchange Commission (SEC), in violation of the securities laws.

Although the bylaw amendments subsequently were rescinded, Sutherland claims that it was injured by the amendments because, while they were in force, Justin’s directors were re-elected. Even…