The Medfield Corporation (Medfield) was a publicly held corporation engaged in operating hospitals and other health care facilities. Medfield established a date for its annual shareholders’ meeting, at which time the board of directors would be elected. In its proxy statement, management proposed the incumbent slate of directors. A group known as the Medfield Shareholders Committee nominated a rival slate of candidates and also solicited proxies. Medfield sent to shareholders proxy solicitation material that:
1. Failed to disclose that Medfield had been overpaid more than $1.8 million by Blue Cross and this amount was due and owing Blue Cross.
2. Failed to disclose that Medicare funds were being withheld because of Medfield’s nonpayment.
3. Failed to adequately disclose self-dealing with Medfield by one of the directors who owned part of a laboratory used by Medfield.
4. Failed to disclose that Medfield was attempting to sell two nursing homes.
5. Impugned the character, integrity, and personal reputation of one of the rival candidates by stating that he had previously been found liable for patent infringement when, in fact, the case had been reversed on appeal. 

At the annual meeting, the incumbent slate of directors received 50 percent of the votes cast, against 44 percent of the insurgent slate of directors. The Gladwins, who owned voting stock, sued to have the election overturned. Who wins? Gladwin v. Medfield Corporation, 540 F.2d 1266, Web 1976 U.S. ApLexis 6548 (United States Court of Appeals for the Fifth Circuit)