Tuesday, December 9, 2008
Ordinarily, I would not include a case like Escott v. BarChris in my Business Associations course. First off, it's long. Second, there's not much law in it, or at least not much law for which I like to hold my Business Associations students responsible. If I were teaching Securities Law, that would be another matter. On the other hand, it is a case about bowling alleys and, as I mentioned before here, it is thus indispensable to the course's bowling theme. It also contributes to the course's great sports cases, memorialized here, here and here.
The case involves the question of who can be liable for material misstatements in a registration statement. The short answer is, everybody who signed it, even if they did not read what they signed. A good lesson for students to learn before they attend their first board meeting.
Escott v. BarChris Construction
BarChris failed to disclose
The extent of its financial woes.
Read what you sign
Or the court will incline
To deliver you unto your foes.