Condec Corporation v. Lunkenheimer Company

United States District Court for the Southern District of New York · 1967 · Corporations

268 F. Supp. 667 (1967)

Updated August 22, 2026

CorporationsAntitrustPreliminary InjunctionsMergers and AcquisitionsClayton Act Section 7Sherman Act Sections 1 and 2preliminary injunctionstatus quo

Facts

Lunkenheimer manufactured and sold industrial valves, including bronze, iron, and steel valves, while Condec's wholly owned subsidiary Hammond sold mostly low-pressure plumbing and heating valves and a smaller but growing line of industrial valves. Lunkenheimer argued that Condec's acquisition would violate Section 7 because the companies competed in either a general bronze valve market or, alternatively, a bronze industrial valve market. The court rejected the broader general bronze valve market and found defendants' evidence more persuasive that, even assuming a bronze industrial valve market, the combined market share probably did not exceed 5 percent. Lunkenheimer waited until just after Condec's tender offer materials were mailed and shortly before a stockholder vote on Lunkenheimer's separate asset-sale agreement with Textron to seek preliminary relief.

Issue

Whether Lunkenheimer was entitled to a preliminary injunction blocking Condec's tender offer on the ground that the proposed acquisition likely violated Section 7 of the Clayton Act and the antitrust laws. More specifically, the court had to decide whether Lunkenheimer had shown sufficient merit and equitable grounds for interim relief where the requested injunction would effectively determine control before trial.

Rule

A preliminary injunction may issue when serious merits questions and the other equitable elements are present, including a balance of hardships tipping decidedly toward the plaintiff, but such relief is inappropriate where the plaintiff has not shown a reasonable probability of success, where the requested injunction would not preserve the status quo but would effectively grant ultimate relief, and where the plaintiff's own delay created the claimed emergency.

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Prairie Forge Systems, based in Cleveland, makes heavy-duty pump components. Ridgeway Holdings launched a tender offer for Prairie Forge after acquiring a smaller rival subsidiary that overlaps with Prairie Forge in one product line; Prairie Forge sued in federal court in Chicago under Section 7, seeking a preliminary injunction three days before the offer expired. Prairie Forge's evidence suggests the firms' combined share in the assumed relevant market is about 4%, and the requested order would cause the offer to lapse permanently before trial.

How should the court most likely rule on Prairie Forge's motion for a preliminary injunction?

Explanation. A preliminary injunction is inappropriate where the plaintiff has not shown a reasonable probability of success and the requested relief would not merely preserve positions pending trial but would effectively grant the plaintiff ultimate victory. The majority rejected the idea that bare horizontal overlap alone suffices, especially where probable combined market share is small and the injunction would cause the bid to fail before the merits can be tried.