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February 3, 2004.


The opinion of the court was delivered by: JOAN H. LEFKOW, District Judge


On May 2, 2003, plaintiff, Kimberly Bors ("Bors"), filed suit against defendants, Gary K. Duberstein ("Duberstein"), Alfred D. Kingsley ("Kingsley"), David D. Jones Jr. ("Jones") and Andrew P. Hines ("Hines") (collectively "defendants"), in the Circuit Court of Cook County, Illinois, alleging state law claims of fraudulent misrepresentation (Count I) and tortious interference with contract (Count II). On July 3, 2003, Hines, with the consent of all other defendants, removed the case to this court on diversity of citizenship grounds. The notice of removal represents that Bors is a citizen of Illinois, Hines a citizen of New Jersey or South Carolina, Duberstein and Kingsley citizens of New York and Jones a citizen of Wisconsin. The notice of removal also alleges that the amount in controversy exceeds $75,000 in that Bors seeks damages in the amount of $180,000. Thus, this court's jurisdiction is invoked pursuant to 28 U.S.C. § 1332(a)(1). Before the court is the defendants' motion under Federal Rules of Civil Procedure 12(b)(6) and 9(b) to dismiss Bors' Complaint. For the reasons stated below, the motion is granted. Page 2


  A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) challenges the sufficiency of the complaint for failure to state a claim upon which relief may be granted. Gen. Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1080 (7th Cir. 1997). Dismissal is appropriate only if it appears beyond a doubt that the plaintiff can prove no set of facts in support of its claim that would entitle it to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Kennedy v., Nat'l Juvenile Det. Ass'n, 187 F.3d 690, 695 (7th Cir. 1999). In ruling on the motion, the court accepts as true all well pleaded facts alleged in the complaint, and it draws all reasonable inferences from those facts in favor of the plaintiff. Jackson v. E. J. Brach Corp., 176 F.3d 971, 977 (7th Cir. 1999); Zemke v. City of Chicago, 100 F.3d 511, 513 (7th Cir. 1996).

  In addition to the mandates of Rule 12(b)(6), Federal Rule of Civil Procedure 9(b) requires "all averments of fraud" to be "stated with particularity," although "[m]alice, intent, knowledge, and other condition of mind of a person may be averred generally." "The rule requires the plaintiff to state the identity of the person who made the misrepresentation, the time, place, and content of the misrepresentation, and the method by which the misrepresentation was communicated to the plaintiff." Vicom, Inc. v. Harbridge Merch. Servs., Inc., 20 F.3d 771, 777 (7th Cir. 1994); see also DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990) ("Although states of mind maybe pleaded generally [under Rule 9(b)], the `circumstances' must be pleaded in detail. This means the who, what, when, where, and how: the first paragraph of any newspaper story."). Page 3


  According to Bors' Complaint, which is taken as true for purposes of this motion, Bors served as the vice-president of Human Resources for Outboard Marine Corporation ("OMC") from October 1995 through December 2000. (Compl. ¶ 2.) On January 17, 1996, Bors was granted 10,000 "phantom" shares of OMC stock based on an Executive Retention Incentive Plan ("ERIP") adopted in late 1995. (Compl. ¶¶ 8-9.) The shares were to vest over five years unless there was a change of control in OMC, at which point the shares would vest immediately. (Compl. ¶ 9.) If such a change occurred, OMC was required to purchase Bors' phantom shares, plus any dividend credits, at the price per share paid for the controlling interest in OMC. (Id.)

  On September 12, 1997, Greenmarine Acquisition Corporation ("Greenmarine") gained control through a tender offer of OMC's common stock. (Compl. ¶ 10.) Greenmarine then merged with OMC, leaving OMC as the surviving company. (Id.) On September 30, 1997, all OMC common stock that was outstanding prior to the merger was cancelled and 20.4 million shares of new common stock was issued to Greenmarine Holdings LLC, Greenmarine's parent company. (Id.) Subsequently, OMC's directors and officers resigned. (Compl. ¶ 13.) Duberstein and Kingsley, who had indirect control of OMC through interest in Greenmarine Holdings LLC, replaced OMC's directors and senior officers and hired Jones as President and CEO and Hines as Executive Vice President and Chief Financial Officer. (Id.)

  When this change in control occurred, Bors became fully vested in the 10,000 phantom shares of OMC stock, in addition 314.873 additional phantom shares that constituted dividend credits. (Compl. ¶ 12.) At this time Bors had the right to require OMC to pay her $18 for each of her shares. (Id.) Page 4

  The Complaint alleges that rather than pay Bors for her phantom shares, Jones and Hines, at the direction of Duberstein and Kingsley, induced Bors to execute a Unit Grant Agreement under which Bors forfeited her right to payment for all but 314.873 of the phantom shares. (Compl. ¶ 14.) The Complaint alleges that the remaining phantom shares were transferred into 10,000 restricted shares of new OMC common stock. (Compl. ¶ 14.)

  The Complaint further alleges that certain statements were used to induce Bors to transfer her right to the phantom shares. These statements included that
a. OMC would pay her not less than $180,000, plus six percent interest compounded annually beginning on September 12, 1997, to repurchase her restricted shares upon termination of her employment.
b. OMC's new ownership and management team expected all remaining ERIP phantom share recipient holders to rollover their phantom shares into new, restricted OMC shares to demonstrate commitment to the team. Refusal or reluctance to rollover the phantom shares would be viewed as showing a lack of commitment to the team, which could ultimately result in the loss of employment.
c. OMC's new ownership and management team were providing ample time and resources to achieve a business turnaround at OMC, which was now free of the quarter-to-quarter financial results reporting it had as a publicly-held company.
d. OMC's new ownership and management team was intensively reorganizing OMC's operational and management structure and making new capital investments to achieve long-needed manufacturing efficiencies, new technology for reducing emissions in boat engines, and resulting new boat engine products.
e. OMC's new ownership and management team intended to take the company public again within five years at a target price of $50 per share, which would then make Bors' restricted shares worth $500,000.
(Compl. ¶ 15.)

  Bors alleges that in making the above statements, Jones and Hines omitted facts that were material to Bors' decision to give up her right to payment for the phantom shares. These omissions included that: Page 5

a. OMC was severely strapped for cash because, among other reasons, the individuals controlling it had caused it to assume a $150 million loan which had been used to finance the tender offer and would become due on or about June 16, 1998-well before OMC would have adequate cash reserves to repay or refinance the loan.
b. Additional cash was not readily available due to the restrictiveness of the bank covenants on [] OMC's revolving working capital credit line.
c. OMC would be insolvent unless it could raise several hundred million[] . . . dollars in new financing.
d. OMC's financial statements for fiscal years 1997 and 1998 materially understated OMC's 1997 financial performance and materially overstated 1998 financial performance-giving OMC the false appearance of materially improving financial performance-and, due to SEC pressure, had to be restated, thus negatively affecting OMC's ability to achieve additional financing.
e. OMC was unable to overcome the problems in implementing new emissions reducing technology for its engines, which it needed to develop new boat engine products and regain market share.
f. As a result of the foregoing, defendants had no intentions of performing the obligations imposed under the ERIP for non-terminating employees.
(Compl. ¶ 16.)

  In December 2000, OMC declared bankruptcy. (Compl. ¶ 21.) This rendered Bors' restrictive shares obtained in lieu of payment on ...

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