Legal Memorandum: Actions and Relief under SEC Section 13(d)

Issue: Under federal law, what actions and relief exist under Section 13(d) of the Securities Exchange Act for a purchaser of shares?

Area of Law: Corporate & Securities
Keywords: Monetary damages; Section 13(d) of the Securities Exchange Act; Purchaser of shares
Jurisdiction: Federal
Cited Cases: 734 F.2d 545; 606 F. Supp. 2d 473; 529 F.3d 532; 439 F. Supp. 2d 139; 772 F.2d 1513; 405 F.3d 620; 286 F.3d 613
Cited Statutes: Section 13(d) of the Securities Exchange Act, 15 U.S.C. § 78m(d); 17 C.F.R. § 240.13D-2(a); Section 18(a) of the Exchange Act, 15 U.S.C. § 78r(a); 15 U.S.C. § 77r
Date: 02/01/2010

While the period of acceptable delay in asserting a maritime lien may be shortened somewhat when a good-faith buyer purchases the vessel, without knowledge of a preexisting maritime lien, before the libel is filed, the same general laches principles apply whether or not a bona fide purchase occurs after the lien accrues and before it is asserted.

Phelps v. The Cecelia Ann, 199 F.2d 627 (4th Cir. 1952).  Court affirmed lower court holding that it was “perfectly clear” that laches barred lien claim where claim was not pursued until more than two years after materials and labor were supplied to vessel and seven months after vessel was sold to innocent purchaser.  “[W]here the lien is to be enforced to the detriment of a purchaser for value, without notice of the lien, the defence [of lapse of time] will be held valid under shorter time, and a more rigid scrutiny of the circumstances of the delay, than when the claimant is the owner at the time the lien accrued.”  Id. at 628.  Opinion also cites a number of cases in which enforcement of lien was denied for various periods of delay ranging from six months to two years.

The Everosa v. F. Grauds Kugniecibas, 93 F.2d 732 (1st Cir. 1937).  This case is cited and quoted frequently.  Libelant provided coal to the vessel twice; court determined that laches applied to one shipment but the other:

As to laches, the coal […]


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