In this аppeal, we are asked to decide whether a highly structured securitization transaction negotiated between Citicorp and an investor in a limited partnership constitutes an “investment contract” as that term is defined by the Supreme Court in SEC v. W.J. Howey Co.,
I.
This case comes before us on review of the district court’s order granting the Citicorp Defendants’ motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6). When reviewing such an order, we are required to acсept as true the factual allegations in the complaint. D.R. v. Middle Bucks Area Vocational Technical School,
A.
The controversy here arises out of alleged violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78j(b), 78t(a), and 78t(b), and Rule 10b5, 17 C.F.R. § 240.10b-5 involving the “securitization” of a pool of delinquent residential mortgage loans (“Mortgage Loans”) and real estate owned by Citicorp as a result of foreclosed loans (“REO”).
The Citicorp Defendants are comprised of Citibank, N.A., a national banking association, Citicorp North America, Inc. (“CNAI”), Citicorp Securities, Inc. (“CSI”), Citicorp Mortgage, Inc. (“CMI”), and Citicorp, which controls either directly or indirectly the other Citicorp Defеndants. With the exception of Citibank, all of the Citicorp Defendants are organized under the laws of the state of Delaware.
Also named as a defendant in this action is BGO, Inc. (“BGO”), a Texas corporation and the general partner of Bristol. BGO is 100% owned by Ontra, Inc. (“Ontra”). Bristol contracted with Ontra to provide loan servicing, loan workouts, REO sales, and oversight of these asset types to the Partnership. The claims against BGO concern its refusal of Steinhardt’s demand that BGO file suit on behalf of the Partnership against the Citicorp Defendants.
Named as nominal defendants are Bristol and BHT Limited, L.P. (“BHT”), a Delaware limited partnership, which is owned 99% by Bristol. Not parties to this lawsuit are OLS, Inc., an Ontra affiliate owning a .21% limited partner interest in Bristol and BHT, Inc., an Ontra affiliate and 1% general partner in BHT Limited, L.P.
The fraudulent conduct alleged in the amended complaint arises out of a severe financial crisis faced by Citicorp during the early 1990’s. With bad loans and illiquid assets threatening the very existence of the nation’s then-largest banking institution, Citicorp was looking for a way to extricate itself from its financial problems. The securitization transaction was thus conceived by Citicorp to remove the nonperforming assets from its financial books and replace them with cash.
In essence, the securitization required Citicorp to create an investment vehicle — a limited partnership ultimately named Bristol Oaks, L.P. — that would issue both debt securities, in the form of nonrecourse bonds, and equity securities, in the form of partnership interests, to investors. Bristol would acquire title to the nonperforming Mortgage Loans and REO properties and would retain Ontra, Inc. to manage and liquidate the assets. Then Bristol would obtain bridge financing from Citibank and CNAI; shortly thereafter, CSI would securitize and underwritе a public offering of bonds and other debt securities to pay off the bridge financing. All of the investors’ money was to be paid to Bristol and become the capital of that investment vehicle. The return on these investments was to come from the same pool of assets.
During late 1993 and the first half of 1994, representatives of CSI made a series of written and oral presentations to the Steinhardt Group in which they described returns of 18% or more annually by investing in Bristol. Throughout these presentations and in other meetings and telephone discussions, Citicorp explained how it had created the proprietary “Citicorp Non-Performing Loan Model” (the “Pricing Model”), based on its own past experience, intimate knowledge of the assets at issue, and the valuation of such assets. Citicorp represented the Pricing Model to be an accurate means of pricing the Mortgage Loans and REO properties in the portfolio and of providing the Steinhardt Group with the promised 18% or greater returns. In particular, Citicorp represented to the Steinhardt Group that no institution in America had more experience in single-family residential mortgages, or more knowledge about the process of collecting on defaulted mortgage loans. ■ Moreover, Citicorp touted not only its longstanding reputation in the banking industry, but also how the assumptions in the Pricing Model were firmly grounded upon Citicorp’s own unparalleled experience and expertise.
A series of factual assumptions lies at the core of the Pricing Model. First, Citicorp assumed that the most accurate “proxy” for the values of the REO and the properties mortgaged for the Mortgage Loans would be
Under the Pricing Model, Citicorp represented the BPOs would be used to calculate a current Loan-to-Value (“LTV”) ratio for each of the properties. The LTV ratio was used to project the probability of possible outcomes with respect to each of the Mortgage Loаns, as well as the ultimate cash proceeds that would flow from each of the possible resolutions.
The Pricing Model also assumed that Onto, as service-provider, would be able to resell the reinstated Mortgage Loans through a pre-existing “conduit” for such loans developed by Citicorp. Citicorp expressly stated in its written presentations to Steinhardt that the Pricing Model’s assumptions were predicated on Citicorp creating a market in these loans to facilitate the stated time frames. Without such a conduit, Bristol could be left without an existing method to dispose of reinstated loans, with little choice but to foreclose on these Mortgage Loans, and holding reinstated loans for up to 30 years, negating the possibility of receiving an attractive resale price within six months as the Pricing Model assumed.
Citicorp further represented that CMI, in the past, had made little or no attempt to collect a substantial number of the delinquent Mortgage Loans and, thus, estimated that 45% of the total portfolio collections could be quickly restructured or worked out through payoffs or settlements.
Finally, based on its own experience, Citicorp included several other assumptions in the Pricing Model: the average cost of repairs and maintenance for each of the properties in its portfolio would be $1,000; the foreclosures would take an average of less than nine months at an average cost of $2,500; the time required for collection on the Mortgage Loans or foreclosure would not be delayed by future bankruptcy filings.
According to the amended complaint, Citicorp knew at the time it made these representations that several of the assumptions underlying the Pricing Model were false. Steinhardt claims that Citicorp obtained inflated valuations by promising the brokers they would later be hired to list the properties for sale if the BPOs were satisfactory to Citicorp. The inflated valuations, in turn, caused the assets to be overpriced, which resulted in the overstatement of future cash flow. Steinhardt further contends that CMI failed to follow its own internal controls for insuring unbiased appraisals, that it employed brokers not on Citicorp’s approved list, and that it required brokers to provide large numbers of valuations within grossly inadequate periods of time, which further undermined their accuracy. Although Citicorp was allegedly warned repeatedly by one of its own officers that the assets were overpriced, these warnings were never revealed to Steinhardt. Rather, Steinhardt contends these warnings were actively concealed in order to induce it to invest in Bristol.
According to the amended complaint, Citicorp concealed other information from Steinhardt, including the true cost of repairs and maintenance, low-end BPOs and other appraisals, recent appraisals which reflected the decline in the real estate market, the true cost and time for foreclosures, the true likelihood of delays caused by bankruptcy proceedings, and Citicorp’s intention not to provide a conduit for the sale of reinstated loans.
Based on Citicorp’s representations, Steinhardt entered into a letter agreement dated May 26,1994, .with CSI, Citibank, CNAI, and Citicorp (the “Letter Agreement”), in which it committed to make an equity contribution of between $40 and $45 million in Bristol. According to the Letter Agreement, a portfolio of approximately $540 million to $660 million in Mortgage Loans and REO properties was to be sold by Citibank and CNAI to a newly formed limited partnership, Bristol. To fund the acquisition of the properties, Citibank and CNAI agreed to lend the newly formed partnership no less than 90% of the total purchase price; the remaining 10% was to be provided by the Partnership in the form of a cash payment representing the Partnership’s total equity. Subsequently, debt securities were to be issued by the Partnership and underwritten by CSI to repay the Citibank and CNAI loans.
The Letter Agreement further provided that “[t]he Partnership will contract with Ontra, Inc ...., an independent third party who is experienced in loan servicing, loan workouts, REO sales, and oversight of these asset types”, to service the properties.
In addition, the Letter Agreement stated that the total purchase price of the assets “will be established to provide the Partners with an internal rate of return ... of. 18% based on the agreed-to assumptions ... and methodology, subject to the satisfaction of Steinhardt’s conditions.... ” One of these conditions was the receipt by Steinhardt of an unqualified “comfort letter,” issued by a nationally recognized, big six, accounting firm, and which verified, without qualification, the validity of Citicorp’s assumptions and methodology.
With regard tо the issuance of debt securities, the Letter Agreement provided that CSI shall either underwrite the securities on a firm commitment basis or place the securities on a best efforts basis. In either event, Citibank and CNAI were to bear all of the costs, expenses and fees incurred in connection with the issuance of the securities. ■ Under the Letter Agreement, the debt securities were the general obligation of the Partnership with recourse solely to the assets. Initially, the proceeds of the securitization were to be used to repay outstanding principal and accrued interest on the notes. Although CSI determined the structure of the securitization, Steinhardt had approval rights, and the economic and other terms of the debt securities were not to be established in any manner which adversely affected Steinhardt’s return on its investments.
The first step of the securitization transaction was completed in the early part of July, 1994, in accordance with two Sale Agreements dated June 30, 1994.
Also contained in the Sale Agreements were numerous express representations and warranties made by Citibank and CNAI relating to the Mortgage Loans and REO properties which Steinhardt claims were breached. In particular, sections 6(a)(1) and 6(b)(1) contained assurances that “[t]he information set forth in the Mortgage Loan and REO Property Schedule is true and correct in all material respects as of the date ... such information is furnished”. The Schedule was required to contain the latest appraised values of each Mortgage Loan and REO property. Instead of providing the latest appraised values as required by the agreements, Citibank and CNAI utilized, on over 2,300 of the assets at issue, appraised values obtained years earlier, at the time of loan origination, which failed to take into consideration declines in the real estate market. Consequently, Steinhardt contends, Citibank’s misrepresentation caused the assets to be overvalued by at least 25%.
According to the amended complaint, Citibank and CNAI breached other specific representations and warranties contained in the Sale Agreements, including “warranties as to their conveyance of good title, the nonexistence of hens, compliance with zoning regulations and other applicable laws, the absence of any environmental violations, and the absence of any valid offset or defense to foreclosure, ... ”, among others.
Section 8 of the Sale Agreement sets forth specific remedies for breach of the representations and warranties. Upon notice of any breach of a representation or warranty, the Seller has thirty days to “use its best efforts promptly to cure such breach in all material respects____” If the Seller fails to do so, then, at the Purchaser’s option, the Seller shall repurchase such Mortgage Loan or REO Property at the repurchase price. In addition to the repurchase remedy, the Seller is also required to indemnify and hold harmless the Purchaser against any losses, damages, penalties, fines, forfeitures, legal fees, judgments, and other costs and expenses arising from any claims resulting from the Sеller’s breach. The parties agreed that the above remedies “constitutefd] the sole remedies of the Purchaser respecting a breach of the foregoing representations and warranties.”
On December 14, 1994, the second step of securitization transaction was completed with the issuance of the debt securities. According to Steinhardt, Citicorp controlled every aspect of the securitization by: structuring all aspects of the securitization; drafting the prospectus; leading all material discussions with the rating agencies; acting as the sole underwriter for the issuance of the debt securities; separately indemnifying Bristol and its affiliates; purchasing an interest rate cap to minimize the risk of any changes in the variable interest rates; arranging for credit enhancement; paying for all of the expenses of securitization; in lieu of customary underwriter’s fees, applying the proceeds of the securitization to pay off the bridge loans; and reimbursing Bristol for additional operating expenses resulting from the securitization.
According to the amended complaint, Steinhardt first learned of Citicorp’s allegedly fraudulent scheme in 1995 through conversations with a former officer of CMI, which ultimately led to an investigation and the discovery of the alleged fraud. On December 1, 1995,
Subsequently, on November 16, 1995, representatives of Steinhardt met with officials of BGO, the general partner of Bristol, to demand that the Partnership commence litigation against the Citicorp Defendants. Despite repeated requests from Steinhardt, BGO has declined to commence legal action on behalf of the Partnership, choosing instead to negotiate, albeit unsuccessfully, with the Citicorp Defendants for over a year and a half. Citicorp has refused to honor the repurchase notice.
B.
On January 17, 1996, Steinhardt instituted the present action on its own behalf.
On December 2, 1996, the district court entered afinal order granting the Citicorp Defendants’ Motion to Dismiss. This timely appeal followed. Our jurisdiction over this appeal arises under 28 U.S.C. § 1291; our review is plenary.
II.
The outcome of this dispute hinges upon whether, under the circumstances, the securitization transaction constitutes an investment contract within the meaning of section 2(1) of the Securities Act of 1933, 15 U.S.C. § 77b(a)(l). In order to invoke the protections of the federal securities laws, an investor must show, as a threshold matter, that the instrument in question is a security. Section 2(1) of the Act sets forth the definition of the term “security.”
The term investment contract has not been defined by Congress, nor does the legis
an investment contract for purposes of the Securities Act means a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party ...
Id. at 298-99,
In enunciating this test, the Supreme Court noted that the statutory purpose of compelling full and fair disclosure was fulfilled. Id. at 299,
The facts in Howey inform our application of the test here. In Howey, the SEC sought to restrain a Florida corporation from offering and selling small tracts of land in a large citrus grove it owned in violation of section 5(a) of the Securities Act of 1933, 15 U.S.C. § 77e(a). The purchasers were offered land sales contracts for small parcels of the grove, along with a service contract for harvesting and marketing the fruit. Although the purchasers were free to contract with other service companies, the superiority of the corporation’s service company was stressed. For the most part, the purchasers lacked the knowledge, skill, and equipment necessary for the care and cultivation of citrus trees. The purchasers had no-desire to occupy the land or develop it themselves; they were attracted solely by the prospects of a return on their investments. The purchasers received an allocable share of the profits based on the amount of shares owned. Forty-one persons bought shares in the Florida citrus grove. Based on these facts, the Supreme Court concluded that all of the elements of an investment contract had been met. Id. at 299,
Clearly Steinhardt has alleged sufficient facts to meet the first prong of Howey. The Steinhardt Group, through its affiliate, C.B. Mtge., has invested $42 milliоn dollars in Bristol with the expectation of receiving a return on its investment of approximately 18%. Thus, the facts alleged show that Steinhardt has undertaken some degree of economic risk. Monaghan, supra, at 2147 (citing Reves v. Ernst & Young,
Regarding the second prong, commonality, we have previously applied a horizontal commonality approach in determining whether a particular investment constitutes a security. See, Salcer v. Merrill Lynch, Pierce, Fenner and Smith,
The district court found that only vertical commonality, and not horizontal commonality, was successfully pleaded in this case. Stating that the court of appeals has not adopted vertical commonality, the district court held that the common enterprise prong of the Howey test had not been adequately pleaded in the complaint. We have addressed horizontal commonality only once previously in Salcer, supra, where we summarily hеld the investment was not part of a pooled group of funds. We do not need to consider whether vertical commonality should be adopted here, or whether horizontal community was adequately pleaded, because we believe the third element of Howey is dispositive.
The third prong of the Supreme Court’s test in Howey test requires that the purchaser be attracted to the investment by the prospect of a profit on the investment rather than a desire to use or consume the item purchased. United Housing Foundation, Inc. v. Forman,
In SEC v. Glenn W. Turner Enterprises, Inc.,
It must be emphasized that the assignment of nominal or limited responsibilities to the participant does not negative the existence of an investment contract; where the duties assigned are so narrowly circumscribed as to involve little real choice of action or where the duties assigned would in any event have little direct effect upon receipt by the participant of the benеfits promised by the promoters, a security may be found to exist. As the Supreme Court has held, emphasis must be placed upon economic reality. See Securities and Exchange Commission v. W.J. Howey Co.,328 U.S. 293 ,66 S.Ct. 1100 ,90 L.Ed. 1244 (1946)....
SEC v. Koscot Interplanetary, Inc.,
We cited with approval the test set forth in Glenn W. Turner Enterprises, supra, for determining whether the third prong of Howey had been met in Lino v. City Investing Co.,
In Goodwin v. Elkins & Co.,
Although the panel in Goodwin unanimously held that the plaintiffs partnership interest did not qualify as a security under federal securities laws, they disagreed as to whether their examination of the issue should be limited to the partnership agreement.
To resolve the issue of whether Steinhardt’s involvement in the Bristol Oaks Limited Partnership was limited to that of a passive investor, we must look at the transaction as a whole, considering the arrangements the parties made for the operation of the investment vehicle
Section 3.1(f) of the LPA, as amended, requires that “the Managing Partner shall not have the right to take any of the following actions (“Material Actions”) without the consent of ... a Majority of the Partners (or pursuant to an approved Business Plan)----” The “Material Actions”, set forth in section 3.1(f) of the LPA, include most tasks that are crucial to turning the mortgages and REO into profit, which is the basic purpose of Bristol Oaks, e.g., entering into any written
Steinhardt approved the interim business plan
The LPA further provides that where a Majority of the Partners proposes a Material Action, the general partner “shall use best efforts to implement such Material Action at the Partnership’s expense on the terms proposed by such Majority of the Partners,” i.e., Steinhardt. If the general partner refuses to act with such best efforts in pursuit of Steinhardt’s proposals, Steinhardt can remove and replace the general partner without notice.
As the above provisions demonstrate, the LPA gives Steinhardt pervasive control - over the management of the Partnership. Indeed, these quite significant powers are far afield of the typical limited partnership agreement whereby a limited partnеr leaves the control of the business to the general partners. We find the agreement altogether consistent with the arrangement before us: Steinhardt, a sophisticated investor, made a $42 million capital contribution in Bristol Oaks, thereby becoming a 98.79% partner through a highly negotiated transaction.
Moreover, it appears the parties have carefully constructed the LPA to give Steinhardt significant control without possibly running afoul of the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. § 17-101, et seq. Indeed, Steinhardt has proposal and approval rights rather than more affirmative responsibilities. We also find unpersuasive Steinhardt’s contention that its powers were limited under the LPA. First, Steinhardt points out language in the LPA that:
[ejxcept for specific rights to propose and approve or disapprove certain Partnership matters as set forth in the Agreеment, the Limited Partners shall not take any part whatsoever in, or have any control over, the business or affairs of the Partnership, nor shall the Limited Partners have any right or authority to act for or bind the Partnership.
Section 3.1(g) of the LPA. Given the extensive proposal and approval rights retained by Steinhardt under the LPA, the “except” clause swallows the general rule of nonparticipation. Second, Steinhardt points out that if a business plan was in place, as it was as soon as Steinhardt approved the interim agreement, Steinhardt’s approval was not required for the general partner to take Material Actions. Steinhardt’s argument lacks substance, however, since Steinhardt could amend the business plan at any time, and the general partner needed Steinhardt’s approval to take any Material Action not provided for under the business рlan.
At oral argument, counsel for Steinhardt made a corollary argument that since the interim agreement was in place, the general partner could operate the partnership without Steinhardt exercising the authority given to it under the LPA. Accordingly, counsel argued, Steinhardt’s amended complaint
Steinhardt further argues that the Delaware Revised Uniform Limited Partnership Act supports its position that it was a passive investor. The Act enumerates those actions of the limited partners that do not equate to controlling the management of the partnership and includes many of the approval rights given to Steinhardt. Steinhardt submits that since under the Act it would not be deemed to have exercised control, it must be a passive investor for Howey purposes.
We find that the Act is not controlling here. The LPA states “[ejxcept as otherwise expressly provided in this Agreement, the rights and duties of the Partners and the administration and termination of the Partnership shall be governed by the Act.” The Act defines control, however, solely for the purpose of limiting the liability of the limited partners to third parties — a situation not present here. 6 Del. C. § 17-303(b). This does not necessarily equate to the threshold for finding a passive investor under federal securities laws. The Delaware Act puts third parties on notice that just because limited partners undertake certain responsibilities with regard to thе management of the partnership, that does not make them liable for the obligations of the partnership. Here, Steinhardt is not trying to shield itself from liability, but rather, is seeking relief for alleged violations of federal securities laws. Federal law therefore determines whether the investor’s involvement is significant enough to place it outside the role of a passive investor.
Thus, accepting, as we must, the facts as alleged in the amended complaint, we do not find Steinhardt is entitled to relief under Howey and its progeny.
III.
We find that the rights and powers assigned to Steinhardt under the LPA were not nominal, but rather, were significant and, thus, directly affected the profits it received from the Partnership. Accordingly, we hold Steinhardt’s investment in the Bristol Oaks Limited Partnership does not constitute an investment contract.
Because we find that Steinhardt was not a passive investor, we need not consider whether the securitization here constituted a common enterprise. We will, therefore, affirm the judgment of the district court.
Notes
. In support of its Motion to Dismiss, the defendants attached copies of the May 26, 1994 Letter Agreement between Citicorp and Steinhardt; the June 30, 1994 Mortgage Loan and REO Property Sale Agreement between Bristol Oaks, L.P., BHT, and Citibank; the Bristol Oaks Limited Partnership Agreement dated June 30, 1994 between BGO, C.B. Mtge., and OLS; and the June 30, 1994 Service Agreement between Bristol Oaks, BHT, and Ontra, Inc.
. In addition to violations of federal securities laws, the amended complaint alleges common law fraud and breach of express and implied contractual obligations. The plaintiffs also assert derivative claims under Delaware law against the Citicorp Defendants on behalf of Bristol Oaks, L.P. and BHT Limited, L.P., the limited partnerships in which Steinhardt had invested. The plaintiffs sought to invoke the district court’s supplemental jurisdiction under 28 U.S.C. § 1367(a) over these state law claims. Inasmuch as the plaintiffs have failed to state a federal claim under rule 12(b)(6), we find that no basis exists for retaining supplemental jurisdiction over the state law claims. Accordingly, the district court properly declined to exercise supplemental jurisdiction over the state law claims.
. Possible outcomes with respect to the Mortgage Loans include the probability that the loan would be reinstated, worked out with a discounted payment, or foreclosed.
. In the amended complaint, Steinhardt claims that at the time the Letter Agreement was executed, Citicorp was already negotiating a "lock up” agreement with Ontra, whereby Citicorp was to have a right of first refusal on all of Ontra’s assets and stock as well as "the power to limit Ontra’s servicing solely to Citicorp's portfolios and the portfоlio at issue....” Thus, Steinhardt contends, Ontra was never the independent third party the Citicorp Defendants represented it to be.
. The Limited Partnership Agreement was also executed on June 30, 1994.
. In the Sale Agreement, Bristol and BHT, collectively the Purchaser, represented and warranted to the Seller that it: is a sophisticated investor and its bid and decision to purchase the Mortgage Loans and REO properties is based upon its own independent expert evaluations of the Mortgage File, the REO File and other materials made available by the Seller and deemed relevant by the Purchaser ... The Purchaser has not relied in entering into this Agreement upon any oral or written information from the Seller, or any of its respective employees, affiliates, agents or representatives, other than the representations and warranties of the Seller cоntained herein.... [T]he Seller has made no representations or warranties as to the Mortgage Loans and REO Properties (including without limitation, the value, marketability, condition or future performance thereof, ... )
. The amended complaint references a letter agreement dated July 6, 1994 in which Citibank and CNAI agreed that Bristol could assign the representations and warranties made under the Sale Agreement to "investors who will invest in the Securities.” This letter, however, was not part of the record below.
. Although paragraph 57 of the amended complaint avers that the notice was sent on December 1, 1995, paragraph 69 alleges that the same notice was sent on November 30, 1995. Since a copy of the notice is not part of the record, we do not know on which date the notice was actually sent. It is of no moment, however, to the issue before us.
. The amended complaint upon which our decision rests was filed on January 30, 1996.
. 15 U.S.C. § 77b(a)(l) states:
The term "security" means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a "security,” or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.
. In Howey, the Supreme Court interpreted "security” as defined in section 2(1) of the Securities Act of 1933, 15 U.S.C. § 77b(l). This definition is, in essence, the equivalent of that contained in the Securities Exchange Act of 1934, 15 U.S.C. § 78c, the statute which is at issue here. Tcherepnin v. Knight,
.See Howey, supra, at 299,
. See SEC v. Glenn W. Turner Enterprises, Inc.,
. See Securities Act Release No. 5211 (Nov. 30, 1971), reported in 1971-72 Transfer Binder CCH Fed.Sec.L.Rep. # 98446.
. See State v. Hawaii Market Center, Inc., 52 Haw. 642,
. 59 Pa. Cons.Stat. Ann. §§ 301-365 (Purdon Supp.1983).
. The term "investment vehicle” refers to the Bristol Oaks Limited Partnership.
. The Partners, simultaneously with the execution of the LPA, approved an interim business plan which set forth the policies and parameters of the real estate servicing operation during the period of time between the closing date and the date of the Master Business Plan.