Escott v. BarChris Construction Corp.

283 F.Supp. 643 (1968)

Study Aids
Case Briefs Overview
Casebooks
Case Briefs
E
From our private database of 46,200+ case briefs, written and edited by humans—never with AI.

Escott v. BarChris Construction Corp.

United States District Court for the Southern District of New York
283 F.Supp. 643 (1968)

SC
Escott v. BarChris Construction Corp.

Facts

BarChris Construction Corp. (BarChris) (defendant) was in the business of constructing bowling alleys. In order to finance its operations, BarChris sold debentures to the investors (plaintiffs). However, around that time BarChris began to experience financial difficulties and the registration statement of the debentures contained various false statements and omissions. Some of these falsities and omission were minor (e.g. 1960 sales and operating income levels were off by a small amount). However, some of the falsities and omissions were more serious, including a statement on the balance sheet that the ratio of current assets to liabilities was 1.9 to 1, when in actuality it was 1.6 to 1. The plaintiffs brought suit on account of the false statements and omissions in the registration statement against numerous individuals, including BarChris’s founders, CFO, attorney, accountant, and some directors, including those that drafted the registration statement. Each of these individuals either did not question the truthfulness of the balance sheet or if they did, they accepted the answers without verifying their accuracy. The defendants filed motions to dismiss the complaints.

Rule of Law

Issue

Holding and Reasoning (McLean, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 780,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials

  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 780,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,200 briefs, keyed to 988 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 780,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 46,200 briefs - keyed to 988 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership

Casebooks

Business Associations
Securities Regulation

Key Terms