Douglas Hansen, Leo Borrell, and Bobby Lawrence were three psychiatrists who recognized the need for an inpatient treatment facility for adolescents and children in their community. They became limited partners in building a for profit psychiatric facility. Each had a 6.25 percent interest in the partnership. Healthcare International, Inc., the general partner with a 75 percent interest, had expertise in hospital construction, management, and operation. Hansen, Borrell, and Lawrence asserted that the managerial control of the partnership was undertaken and operated by the general partner to the exclusion of the limited partners. The doctors claimed that their interest was a security-“an investment contract”-that gave them status to file a securities suit against the general partner under the 1934 act. The general partner disagreed. Decide. [L & B Hospital Ventures, Inc. v. Health-care International, Inc., 894 F.2d 150 (5th Cir.)]
