Steinhardt Group Inc. v. Citicorp
United States Court of Appeals for the Third Circuit
126 F.3d 144 (1997)
Citicorp (defendant) entered into a series of financially dubious transactions in the early 1990s, such that it began to conjure up ways in which to hide its debt. One such way was to create an investment vehicle that would hide debt by creating a series of bonds in an effort to pool defaulted mortgages. The investment vehicle in question is Bristol Oaks, L.P. Citicorp was able to convince Steinhardt Group Inc. (plaintiff) to invest in Bristol Oaks, with Steinhardt purchasing a majority interest in the partnership. As such, Steinhardt was entitled to approve Bristol Oaks’ business plans. When Bristol Oaks failed, Steinhardt brought suit against Citicorp, alleging that it had been misled by Citicorp as to the character of its investment, in violation of federal securities laws. The district court ruled in favor of Citicorp. Steinhardt then appealed to the Third Circuit Court of Appeals.
Rule of Law
Holding and Reasoning (Mansmann, Circuit Judge)
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