Landreth Timber Co. v. Landreth et al. (471 U.S. 681)
U.S. Supreme Court · decided May 28, 1985 · Supreme Court Database (Spaeth)
- Citation
- 471 U.S. 681 · 105 S. Ct. 2297
- Decided
- May 28, 1985
- Term
- October Term 1984
- Vote
- 8–1
- Majority author
- Justice Powell
- Issue area
- Economic Activity
- Disposition
- Reversed
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
Opinion excerpt
Justice Powell delivered the opinion of the Court. This case presents the question whether the sale of all of the stock of a company is a securities transaction subject to the antifraud provisions of the federal securities laws (the Acts). I Respondents Ivan K. Landreth and his sons owned all of the outstanding stock of a lumber business they operated in Tonasket, Washington. The Landreth family offered their stock for sale through both Washington and out-of-state brokers. Before a purchaser was found, the company’s sawmill was heavily damaged by fire. Despite the fire, the brokers continued to offer the stock for sale. Potential purchasers were advised of the damage, but were told that the mill would be completely rebuilt and modernized. Samuel Dennis, a Massachusetts tax attorney, received a letter offering the stock for sale. On the basis of the letter’s representations concerning the rebuilding plans, the predicted productivity of the mill, existing contracts, and expected profits, Dennis became interested in acquiring the stock. He talked to John Bolten, a former client who had retired to Florida, about joining him in investigating the offer. After having an audit and an inspection of the mill conducted, a stock purchase agreement was negotiated, with Dennis the purchaser of all of the common stock in the lumber company. Ivan Landreth agreed to stay on as a consultant…
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