OPINION & ORDER This case is before the Court on remand. Plaintiffs Dennis Donoghue and Mark Rubenstein, shareholders of Oaktree Specialty Lending Corporation (“OCSL”), bring suit under Section 16(b) of the Securities Exchange Act of 1934, 15 U.S.C. §78p(b), to recover alleged short-swing profits obtained by a company insider, defendant Leonard M. Tannenbaum. In an earlier decision, the Court granted summary judgment to Tannenbaum, holding that no material issue of fact existed as to either prong of the “unorthodox transaction” exception to Section 16(b), as (1) Tannenbaum’s merger-related acquisition of OCSL shares was involuntary, and (2) Tannenbaum did not have access to inside information related to the merger. Dkt. 70 (“2022 Op.”), 600 F. Supp. 3d 463 (S.D.N.Y. 2022). The Second Circuit, however, vacated and remanded, holding that Tannenbaum was entitled to summary judgment as to the first prong of the unorthodox transaction exception, but that he had not carried his burden as to the second. Dkt. 74 (“2d Cir. Op.”), 2023 WL 4631963 (2d Cir. July 20, 2023). Pursuant to the Circuit’s mandate, the Court reopened discovery for the limited purpose of further developing the evidentiary record as to whether Tannenbaum had had access to inside information related to the merger. With discovery now complete, Tannenbaum again moves for summary judgment. For the reasons that follow, the Court denies the motion. I. Background1 A. Factual Background to the Merger Given the limited scope of this decision, the Court offers here only a brief summary of the underlying facts, and incorporates by reference the comprehensive factual background provided in its earlier opinion. 2022 Op. at 2-10. In October 2017, Tannenbaum sold his management interest — while retaining his significant equity interest — in two companies he founded to Oaktree Capital Management, L.P. (“Oaktree”). JSF 1. Upon the sale, the companies were rebranded as Oaktree Specialty Lending Corporation (“OSCL”) and Oaktree Strategic Income Corporation (“OCSI”). Id. As part of the deal, Tannenbaum agreed to vote his OCSL and OCSI shares “at each meeting of the stockholders…in accordance with the written instruction” of Oaktree (the “Voting Agreements”). Id. 4; see also Dkt. 63, Exs. 3-4 (full text of Voting Agreements). Three years later, on October 29, 2020, OCSL and OSCI jointly announced that OCSL would acquire 100 percent of OCSI in a stock-for-stock transaction (the “Merger”). Id. 7. Under the Merger, OCSI shareholders — like Tannenbaum — were to receive a number of shares in OCSL based on the relative net assets per share (the “Net Asset Value” or “NAV”) of each company at the time the deal closed (the “Exchange Ratio”). See id.
8-9. To use a simple example, if OCSI’s net assets per share (say, $8) were double OCSL’s ($4) at the time the deal closed, each OCSI share would be converted into OCSL shares, ensuring that each shareholder retained the same approximate “value” post-Merger. See id.