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IRVINE, CA-The issue of whether a fractured-ownership purchase constitutes a security or a real estate transaction has been further settled by a 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, tells GlobeSt.com that the Ninth Circuit “has finally laid down a very clear safe harbor for developing and selling condominium hotels.”

The ruling involved the Circuit upholding a lower-court’s dismissal of plaintiffs’ common-law fraud claims in Salameh, et al. v. Tarsadia Hotels, et al. The Circuit found that the plaintiffs did not allege sufficient facts that would demonstrate that the condominium-hotel units at the Hard Rock Hotel in San Diego constituted a security.

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