The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
In 1973 Michael Susman ("Susman") brought this class and
derivative action on behalf of Consumers National Corporation
("Consumers") and its minority stockholders. Susman asserts
various violations of the Securities and Exchange Act of 1934
in connection with the "going private" merger of Consumers
into Lincoln American Life Insurance Company ("Lincoln Life"),
a wholly-owned subsidiary of Lincoln American Corporation
("Lincoln American"). In the latest chapter of this seemingly
interminable litigation, defendants have moved for:
(1) summary judgment on Susman's individual
(2) summary judgment on the derivative claims;
(3) an order (or other appropriate relief)
barring Susman from serving as class
(4) summary judgment against three class
members (not named plaintiffs).
For the reasons stated in this memorandum opinion and order,
defendants' first and second motions are granted, while the
third and fourth motions are denied.
Three earlier opinions of this Court*fn1 have provided a
more detailed account of the source of this litigation than is
needed here. More appropriate for current purposes is a brief
account of the complicated procedural history underlying just
one fragment of this case — the class certification issue.
At a relatively early date Judge Flaum (to whom the case was
then assigned) denied Susman's motion for class certification
because his family relationship with class counsel threatened
Susman's ability to protect the interests of absent class
members. 72 F.R.D. 187. That decision was affirmed at
561 F.2d 86 (7th Cir. 1977) (Susman I).
After retaining new counsel, Susman renewed his motion. In
response, defendants tendered the full amount of Susman's
individual claim to him. When he rejected the offer,
defendants filed a motion to dismiss. Judge Flaum granted
defendants' motion on the ground the tender had mooted the
controversy between the named parties. This time, however, our
Court of Appeals reversed, 587 F.2d 866 (7th Cir. 1978),
cert.denied, 445 U.S. 942, 100 S.Ct. 1336, 63 L.Ed.2d 775
(1980) (Susman II).
Inspired by this victory, Susman persevered with his quest
for certification. This Court's February 12, 1981 memorandum
opinion and order rejected the class designation he had
tendered but provided a road map for redefinition of the
proposed class. Susman accepted the invitation, and this Court
certified the redefined class March 10, 1981.
Summary Judgment Against Susman on His Individual
Defendants advance two reasons for summary judgment against
1. Susman could not possibly have relied on
alleged misrepresentations and omissions in the
proxy materials at issue — even if there is a
rebuttable presumption of reliance ...