Gustafson v. Alloyd Company, Incorporated

Gustafson and other shareholders sold Alloyd Company (plaintiff) to Wind Point Partners under a contract valuing the company using the prior year's revenue figures, which later proved incorrect; Wind Point sued under section 12(2) of the Securities Act, arguing the private sales contract was a "prospectus" containing an actionable misstatement. The district court ruled for Gustafson, the court of appeals vacated and remanded, and the Supreme Court granted certiorari.