Sullivan & Long, Inc. v. Scattered Corp.
United States Court of Appeals for the Seventh Circuit
47 F.3d 857 (1995)
- Written by Robert Cane, JD
Facts
LTV Corporation was a steel producer. In 1986, LTV entered bankruptcy. Under the proposed plan of reorganization, existing stock in LTV would be replaced by new stock, which was estimated to have a value of three to four cents per share. The old shares of LTV were trading for more than 30 cents per share when the reorganization plan was announced publicly. Scattered Corporation (defendant) was a stock dealer. Scattered engaged in a high volume of short sales of the old LTV stock based on the publicly available information that the new LTV stock was expected to reach a price of three to four cents. Buyers (plaintiffs) of Scattered’s short sales incorrectly thought that the price of the old LTV shares would rise before dropping to the estimated level of three to four cents. The price of the old LTV shares did not rise. Consequently, the buyers lost money. The buyers filed suit against Scattered, alleging that Scattered had engaged in market manipulation with respect to the price of the old LTV stock. The trial court dismissed the complaint for failure to state a claim. The buyers appealed.
Rule of Law
Issue
Holding and Reasoning (Posner, C.J.)
What to do next…
Here's why 832,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 46,400 briefs, keyed to 994 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.
