49:5-15. Rights and remedies

a. Any offeror who purchases an equity security in connection with a takeover offer not in compliance with this act or by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, shall be liable to the person selling the security to him. That person may sue either at law or in equity.

As used in this section, "damages" means an amount equal to the market value of the shares acquired by the offeror plus any dividends or interest paid thereon to the offeror or any person holding under him and minus the consideration received for the shares from the offeror. For the purpose of paragraph (2) of subsection b. of this section, market value is the greater of the market value on the date the action is commenced or on the date of tender. For the purpose of subsection e. of this section, market value is measured on the date when the offer to pay damages is made.

b. An offeree who is entitled to recover pursuant to subsection a. may bring a civil action:

(1) To recover such shares, if the offeror still owns them, together with all dividends or interest received thereon, costs and reasonable attorneys' fees, upon the tender of the consideration received from the offeror; or

(2) For the substantial equivalent in damages.

c. Every person who directly or indirectly controls a person liable under subsection b., every partner, principal executive officer or director of such person, every person occupying a similar status or performing similar functions, every employee of such person who materially aids in the act or transaction constituting the violation, and every broker-dealer or agent who materially aids in the act or transaction constituting the violation, is also liable jointly and severally with and to the same extent as such person, unless the person liable hereunder proves that he did not know, and in the exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist. There shall be contribution as in cases of contract among the several persons so liable.

d. Any tender specified in this section may be made at any time before entry of judgment.

e. If any person liable by reason of subsection a. or c. makes a written offer, before suit is brought, to return the shares taken up pursuant to the takeover bid, together with all dividends or interest received thereon, upon the tender of the consideration received from the offeror, or to pay damages if the offeror no longer owns such shares, an offeree is not entitled to maintain a suit under this section if he has refused or failed to accept such offer within 30 days of its receipt.

L.1977, c. 76, s. 15, eff. April 27, 1977.