Great Lakes (P) purchased NSC from Monsanto (D). NSC was a limited liability company. Six months later, P sued D for violation of 10(b) and Rule 10(b) for failing to disclose material information in conjunction with the sale of NSC. D moved to dismiss pursuant to FRCP 12(b)(6) for failure to state a claim upon which relief may be granted. Ds contend that no securities were sold as defined under 2(a)(1) of the SEC 1933. When P and D were negotiating for the sale a number of events were occurring that would have significant impact for the future of NSC. A Korean firm began discounting the sale of L-phe, and an Italian firm was producing Tic-D by a manufacturing process that allegedly infringed the claims of NSC’s patents. D did provide P’s representatives with revised sales forecasts from $93 million down to $78 million. The next week P made an offer of $130 million and after further discussions over the financial prospects adjusted it to $125 million. The transaction was closed. This was a motion to dismiss the suit.

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