Molly M. Reynolds

Appeal and cross-appeal arising from limited partnership investment litigation involving an offering memorandum for a real estate tax shelter.

The court held that, read as a whole and in light of the financing and refinancing structure, the offering memorandum contemplated repayment of accrued interest and principal on the second secured loans only upon acceptable refinancing of the first loans; because that refinancing never occurred, the investors were not contractually obliged to repay the second loans.

The court also held that the cash flow loans were not expressly made repayable by investors under the offering documents.

On the cross-appeal, the court held that the contractual deemed-reliance clause was included to satisfy securities-law requirements and did not create a broader right to sue for misrepresentation outside the clause's 90-day notice period.

Both the appeal and cross-appeal were dismissed, with no costs.