In re Worlds of Wonder Securities Litigation
United States Court of Appeals for the Ninth Circuit
35 F.3d 1407 (1994)
World of Wonder, Inc. (WOW) (defendant) achieved great financial success with the sale of two of the most popular toys of the 1986 Christmas season, Teddy Ruxpin and Lazer Tag. The board of WOW predicted that the company had the potential to increase its sales, and as a result, it set out to raise capital by issuing bonds in 1987. WOW was unable to repeat its successes from the 1986 Christmas season, and defaulted on the bonds. WOW’s bondholders (plaintiffs) brought suit, alleging that the prospectus regarding the bonds contained several material misrepresentations of WOW’s financial situation. The district court ruled in favor of WOW. The bondholders then appealed to the Ninth Circuit Court of Appeals.
Rule of Law
Holding and Reasoning (Hall, J.)
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