Eichenholtz v. Brennan

52 F.3d 478 (3rd Cir. 1995)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

International Thoroughbred Breeders (ITB) is a Delaware corporation in the business of buying, selling, and leasing interests in thoroughbred horses for breeding. ITB proposed a plan to purchase the Garden State grounds, construct a new facility, and operate a thoroughbred and harness racing facility. ITB raised money for this undertaking through the sale of securities. Eichenholtz (Ps) sued over omissions and material misstatements in ITB's offerings of July 26, 1983; April 16, 1984; July 25, 1985; and May 14, 1986. The essence of the complaint is that the four public offerings were elaborate schemes to generate underwriting fees and sell ITB securities at an inflated value. Ps alleged violations of section 10(b) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78j(b); Rule 10b-5, 17 C.F.R. § 240.10b-5; sections 11, 12(2), and 17(a) of the Securities Act of 1933, 15 U.S.C. §§ 77k,77l(2), 77q(a); and of the Racketeer Influenced and Corrupt Organizations Act ('RICO'), 18 U.S.C. §§ 1961-1968. Ps eventually obtained a partial settlement and some of the defendants. First Jersey, First Philadelphia, and Rooney Pace all filed cross-claims for contribution under the federal securities laws and for common law contribution and indemnification. The court entered a bar order, preventing any further judgment against ITB invoking a proportionate judgment. The non-settling defendants Rooney Pace, First Jersey, and First Philadelphia appealed because the bar order prohibited their contractual right to enforce the indemnification part of their agreement with ITB.