Close X
Attorney Spotlight

How does Jessie Zeigler anticipate the intersection of privacy and smart technology will impact the future of litigation? Find out more>


Close X


Search our Experience

Experience Spotlight

Primary Care Providers Win Challenge of CMS Interpretation of Enhanced Payment Law

With the help and support of the Tennessee Medical Association, 21 Tennessee physicians of underserved communities joined together and retained Bass, Berry & Sims to file suit against the Centers for Medicare & Medicaid Services to stop improper collection efforts. Our team, led by David King, was successful in halting efforts to recoup TennCare payments that were used legitimately to expand services in communities that needed them. Read more

Tennessee Medical Association & Bass, Berry & Sims

Close X

Thought Leadership

Enter your search terms in the relevant box(es) below to search for specific Thought Leadership.
To see a recent listing of Thought Leadership, click the blue Search button below.

Thought Leadership Spotlight

Healthcare Private Equity Compliance Checklist

The complex and ever-changing healthcare regulatory and enforcement environment, including increased focus on the role of private equity firms in their portfolio companies, make compliance a top priority for private equity firms investing in healthcare companies. The best way to limit your exposure as a private equity firm is to avoid a compliance misstep in the first place. Additionally, an effective and robust compliance program for your portfolio healthcare company makes it much more attractive to potential buyers and helps you avoid an unexpected and costly investigation or valuation hit down the road. Download the Healthcare Private Equity Compliance Checklist to assess whether your portfolio company's compliance program is up-to-date.

Click here to download the checklist.

Chris Lazarini Discusses Burden of Materiality under Section 11 and 12 of Securities Act

Securities Litigation Commentator


April 18, 2017

Bass, Berry & Sims attorney Chris Lazarini discussed the class action suit brought against Party City alleging the company failed to disclose material facts in SEC documents when it did not discuss the impact the decline in sales of merchandise related to the Disney movie, Frozen had on its overall performance. Plaintiffs sought relief under Sections 11, 12(a)(2), and 15 of the Securities Act. The court disagreed, ruling that the omission would not have misled reasonable investors. 

Chris provided the analysis for Securities Litigation Commentator (SLC). The full text of the analysis is below and used with permission from the publication. If you would like to receive additional content from the SLC, please visit the SLC website to sign up for the newsletter.

Jones vs. Party City Holdco, Inc., No. 15-cv-9080 (S.D. N.Y., 2/1/17) 

To state a claim under Section 11 or 12(a)(2) of the Securities Act of 1933, plaintiffs must allege that the registration statement or prospectus contained an untrue statement of material fact. 

This putative stock drop class action against Party City, two beneficial owners of its stock and four securities underwriters, was brought on behalf of all persons who purchased shares in or traceable to Party City's April 2015 initial public offering. Plaintiffs alleged violations of Sections 11, 12(a)(2), and 15 of the Securities Act, focusing on the Company's statement that "none" of its third-party intellectual property licenses were "individually material to our aggregate business." Plaintiffs argued that the company's Registration Statement and Prospectus failed to disclose that the company's 2014 sales were driven in large part by sales of Disney's Frozen merchandise, sales that cooled in 2015. The omission was material, Plaintiffs argued, because the Company later disclosed that sales of its other licensed products could not offset the Frozen "phenomenon." Defendants moved to dismiss, arguing that the statement related to possible risks if the Company lost one of its product licenses and said nothing about future demand or sales.

Both the Section 11 and Section 12 claims require a showing of materiality. Even drawing all reasonable inferences in Plaintiffs' favor, the Court finds that they have not adequately alleged that the alleged misstatement was false or material. Just because the Company later described Frozen's performance as "phenomenal" and "extraordinary," the Court concludes, does not mean that it had a material impact on the Company's aggregate business. When the Registration Statement and Prospectus are viewed as a whole, the Court finds, no reasonable investor could have been misled by the challenged statement, as Plaintiffs alleged no connection between the statement and the Company's business as a whole. Having dismissed the claims related to the primary allegations, the Court also dismisses the Section 15 claims. 

Perhaps the Duke of Weselton was wrong when he said, "I knew there was something dubious going on here."

Related Professionals

Related Services


Visiting, or interacting with, this website does not constitute an attorney-client relationship. Although we are always interested in hearing from visitors to our website, we cannot accept representation on a new matter from either existing clients or new clients until we know that we do not have a conflict of interest that would prevent us from doing so. Therefore, please do not send us any information about any new matter that may involve a potential legal representation until we have confirmed that a conflict of interest does not exist and we have expressly agreed in writing to the representation. Until there is such an agreement, we will not be deemed to have given you any advice, any information you send may not be deemed privileged and confidential, and we may be able to represent adverse parties.