dismissed their claims and their requests for injunctive relief

More documents

Recommendations

Info

Case 1:04-cv-08825-JFK-HBP Document 118 Filed 06/26/12 Page 16 of 56legislation requiring a dilution of foreign held equity whenevernew capital expenditures are made.” (Id. at UCC04189).Therefore, UCIL “is required by the Government of India (GOI) toraise 25% of the estimated cost of expansion through the issueof new equity to the local shareholders and Indian public,” anissuance that would dilute UCC’s stake in UCIL. (Id. atUCC04189-90). UCC’s Management Committee “endorsed” UCIL’sCapital Budget Proposal for the back-integration of the BhopalPlant on December 10, 1973. (2005 Heck Decl., Ex. D5 atUCC04240). In February 1977, UCIL prepared a review of its 1973Capital Budget proposal, revised to portray “substantial changesin conditions from those assumed in the original CBP.” (HandleyDecl., Ex. I at UCC04684). Importantly, however, the 1977Capital Budget Proposal Review reiterates the fact that UCILproposed the back-integration project and that “UCIL has electedwith the concurrence of UC Eastern to implement an equityreduction to 50.9%.” (Id. at UCC04693, UCC04695).Although Plaintiffs suggest that the idea for backintegrationwas at least partially UCC’s, the documents do notsupport that assertion. In a January 24, 1985 affidavit, EdwardMunoz, a former UCC employee, states that “[i]n 1966 he was sentto India by Union Carbide Corporation to investigate thefeasibility of establishing pesticide manufacturing facilitiesin India.” (Handley Decl., Ex. TT at 2). Mr. Munoz16
Case 1:04-cv-08825-JFK-HBP Document 118 Filed 06/26/12 Page 17 of 56ultimately “determined that a pesticide plant was feasible,” andhe goes on to describe his involvement with the engineering andconstruction of the plant in the 1960s, as well as additionalengineering and construction involving the plant post-1973. (Id.at 5, 7). Given the Bhopal Plant’s known history as aformulations plant back-integrated into to a manufacturingplant, it appears that Mr. Munoz’s language was imprecise inthat he was referring to a 1966 study of the feasibility ofpesticide formulations facilities, not manufacturing facilities.In any event, even if UCC did explore the possibility of apesticide manufacturing plant as early as 1966, there is noevidence that UCC took any steps to erect such a plant; indeed,manufacturing facilities were only constructed after UCILundertook to do so itself.There is no dispute that UCIL, acting under pressure fromthe Government of India, proposed a major capital expenditurethat would transform the nature of operations at the BhopalPlant. It is entirely unsurprising that UCC’s ManagementCompany would review such a significant proposal, nor is itsurprising that some kind of approval by the parent would berequired where the subsidiary planned to reduce the parent’sequity ownership. See Fletcher, 861 F. Supp. at 245 (“[I] t isentirely appropriate for a parent corporation to approve majorexpenditures and policies involving the subsidiary, and for17
Page 1 and 2: Case 1:04-cv-08825-JFK-HBP Document
Page 56: Case 1:04-cv-08825-JFK-HBP Document

dismissed their claims and their requests for injunctive relief

Create successful ePaper yourself

Delete template?

Save as template?