David K. Lindemuth Co. v. Shannon Financial Corp.

ORDER

Defendants’ Shannon Financial Corp. (Shannon), SFC Leasing Corp. (SFC), and Michael McCune’s motion to dismiss, or, in the alternative, for a more definite statement, came on for hearing June 19, 1986. The Court has considered the briefs, arguments of counsel and the entire record in this matter.

Plaintiffs, David K. Lindemuth Co., Inc. (Lindemuth), Giroux Tool & Engineering, Inc., and Research Machine Development, Inc., are three unrelated corporations. They join together to sue defendants Shannon, SFC, OTI, Inc. (OTI), Pengo Industries, Inc. (Pengo), NDT Systems, Inc. (NDT), ITT Industrial Credit Co. (ITT) and Michael McCune, an individual who is an officer, director and shareholder in Shannon and SFC.

Plaintiffs allege that they were all similarly defrauded concerning securities sold by defendants and filed a twelve count complaint. Specifically, count 1 charges all defendants with violating § 12(1) of the Securities Act of 1933 (1933 Act). Count 2 alleges violations of § 10(b) of the Securities Exchange Act of 1934 (1934 Act). Count 3 is brought under § 17(a) of the 1933 Act. Count 4 charges McCune with being a controlling person under § 15 of the 1933 Act and § 20 of…