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Securities Regulation Keyed to Coffee
Escott v. BarChris Construction Corp
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*Case Brief Anatomy includes: Brief Prologue, Complete Case Brief, Brief Epilogue
- The Brief Prologue provides necessary case brief introductory information and includes:
- Topic: Identifies the topic of law and where this case fits within your course outline.
- Parties: Identifies the cast of characters involved in the case.
- Procedural Posture & History: Shares the case history with how lower courts have ruled on the matter.
- Case Key Terms, Acts, Doctrines, etc.: A case specific Legal Term Dictionary.
- Case Doctrines, Acts, Statutes, Amendments and Treatises: Identifies and Defines Legal Authority used in this case.
- The Case Brief is the complete case summarized and authored in the traditional Law School I.R.A.C. format. The Pro case brief includes:
- Brief Facts: A Synopsis of the Facts of the case.
- Rule of Law: Identifies the Legal Principle the Court used in deciding the case.
- Facts: What are the factual circumstances that gave rise to the civil or criminal case? What is the relationship of the Parties that are involved in the case. Review the Facts of this case here:
Bowling alley construction business, BarChris Construction Corp., had multiple financing agreements that they used in the sale of alleys to purchasers. Triangular sales and sale-leaseback agreements were regularly used. Continuous replacement of working capital became a need for BarChris due to the nature of the sales. In 1961, BarChris issued 15 year debentures to increase capital. Following the law, a registration statement was created, containingBarChris’ assets for 1960 and the first quarter of 1961, this statement, however, includingabundant mistakes. It utterlyexaggeratedsales, net income, and earnings per share while not revealing particular unpaid debts, customers’ misbehaviors, and specific operative facets of BarChris. BarChris ultimately filed for bankruptcy after going broke. A class of the debentures buyers filed a suit seeking recessionary damages under § 11 of the Securities Act, with several defendants moving to dismiss. [The Court looked into every defendant very thoroughly, with a summation as follows: Kircher was the treasurer and CFO for BarChris, he was aware that a part of the 1960 auditing numbers were wrong; that there was a customer misbehavior problem, among many other items of note, he was cognizant of the pertinent facts. Birnbaum was house counsel and assistant secretary, whom signed amendments to the statement. He depended on Kircher for the nonaudited segments of the statement but with no privateunderstanding of the books or monetary transactions. Auslander was a nonofficer-director who signed amendments to the statement without first reading them, depending on theaffirmations of Kircher that they were accurate. The director and outside attorney for BarChris, Grant, drafted the registration statement, relying on numbers from an audit by Peat, Marwick. In regards to nonaudited numbers, he depended on the word of multiple BarChris officers as to the authenticity. He never began an investigation of the books or contracts. Drexel & Co was the main underwriter; Coleman was director of BarChris and partner of Drexel & Co; and Ballard, a Drexel attorney, all were dependent on Kircher’s affirmations as to the truth of the nonaudited portions of the statement, without making an independent inquiry. Peat, Marwick was the auditor of the 1960s figures. It failed to observe its own internal standards or even regularly recognized auditing standards. It did not realize that one venture had not been purchased, and thus that sales had been exaggerated and liabilities minimized.]
- Issue(s): Lists the Questions of Law that are raised by the Facts of the case.
- Holding: Shares the Court's answer to the legal questions raised in the issue.
- Concurring / Dissenting Opinions: Includes valuable concurring or dissenting opinions and their key points.
- Reasoning and Analysis: Identifies the chain of argument(s) which led the judges to rule as they did.
- The Brief Prologue closes the case brief with important forward-looking discussion and includes:
- Policy: Identifies the Policy if any that has been established by the case.
- Court Direction: Shares where the Court went from here for this case.