Court Closes Book on Securities Case

IRVINE, CA—The US Supreme Court has denied a certiorari request by plaintiffs Salameh, et al. regarding the Ninth Circuit court’s landmark decision that the sale of condominium/hotel units at the Hard Rock Hotel in San Diego is not the sale of a security. Effectively, the High Court has upheld the Ninth Circuit court’s ruling, which also lays out a fairly tight set of rules for safe harbor when selling fractionalized interests in a real estate asset.

As GlobeSt.com reported in August 2013, the issue of whether a fractured-ownership purchase constitutes a security or a real estate transaction was further settled by the recent Ninth Circuit landmark decision, according to Frederick “Rick” Kranz, the prevailing litigator in the case at hand. Kranz, an attorney with locally based Cox Castle & Nicholson, told GlobeSt.com that the Ninth Circuit “has finally laid down a very clear safe harbor for developing and selling condominium hotels.”