PREPARATION OF REGISTRATION STATEMENT ISSUER'S COUNSEL—ADVICE TO MY CLIENT

To follow Louis Loss on a lecture platform is always a difficult task. When his subject is the analysis of a landmark opinion in the field of his greatest expertise the job is even more difficult. We could not have had a better exposition of the legal background of the BarChris case, of what Judge McLean held and of what he said in his decision. I am reminded of my first year course in Contracts at Columbia Law School some forty years ago, when the late Herman Oliphant would always inquire as to what the court had held; and when he got a lengthy answer, reject it with the pungent aphorism: All that the court held was that 'the plaintiff may recover' or 'the plaintiff may not recover.' Our task now is to get down to what effect Judge McLean's decision has had upon the practice of that esoteric art the assembly and presentation of data for purposes of a 1933 Act registration statement. In order to do that I suggest we have to begin at the beginning. The ground to be covered is the somewhat familiar territory the process of going public not necessarily for the first time and our emphasis of course will be on counsel's function. If there be newer territory, it lies in the tones and overtones of BarChris as they affect that process; the lessons to be learned and to be applied in the solution of practical problems. BarChris emphasizes for us the risks of civil liability under the 1933 Act that of the issuer itself under Section 1 1 (a) as an insurer; that of others to whom due diligence defenses are available under Section 11 (b) in greater or lesser degree. As counsel for the issuer, we begin by recognizing that under this statutory scheme our client has an almost schizophrenic character. Indeed I would say there are at least three separate aspects to its personality. First, of course, is its corporate or other entity which is the insurer. Second, comes inside management, including the principal officers who sign the registration statement, and possibly some, but not all, of the directors. Third, are those who assume liability with or without signing, other directors or persons named as chosen to become directors; and from where I sit I would almost include a fourth category general counsel for the company, if other than myself. The function of counsel is extremely broad much broader surely than the mere giving of legal advice and the rendition of formal opinions. First, he becomes an active participant in negotiations, for ex-