SECURITIES LEGISLATION - SECURITIES ACT OF 1933 - REGISTRATION STATEMENT - "MATERIAL CONTRACT''

A registrant under the Securities Act of 1933 had borrowed from the Reconstruction Finance Corporation $200,000, payment of which was secured by mortgage of most of the debtor's assets. Registrant still owed $136,000 overdue when it filed its amended registration statement. It said therein that it had applied to the RFC for an eighteen-months extension of the debt and that the application had not then been acted upon. After the statement was filed but before it became effective, the RFC denied registrant extension of the debt and made a counter proposal for payment in part and extension in part.

In a stop-order proceeding suspending effectiveness of the statement, the Securities and Exchange Commission held that item 46 of the registration statement (requiring the statement of "the general effect . . . of every material contract") was deficient because of its failure to show that the extension had been refused. In the Matter of Kinner Airplane & Motor Corporation, Ltd., Securities Act of 1933 Release No. 1644, CCH SECURITIES ACT SERVICE, ¶ 30,014 (1937).