Doran v. Petroleum Management Corp.
United States Court of Appeals for the Fifth Circuit
545 F.2d 893 (5th Cir. 1977)
Petroleum Management Corp. (PMC) (defendant) offered unregistered limited-partnership interests in an oil-drilling venture privately to eight investors, of whom only Doran (plaintiff) invested; when Wyoming regulators later shut down the wells for overproduction, Doran defaulted on a related note and lost a subsequent state lawsuit, then sued PMC for breach of contract and rescission based on PMC's failure to register the offering. The district court found the offering exempt as private because Doran, deemed a sophisticated investor, did not need federal securities protection.
Whether a sale may constitute an exempt private offering if the offeree was not furnished with and did not have access to the kind of information about the issuer that a registration statement would have disclosed.