Section 13d reporting requirements need updating

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A “going private” transaction generally involves the cash-out of all or a substantial portion of a company’s public shares so that the company becomes eligible to delist and deregister its shares under the Exchange Act.

“Going private” transactions can take many forms and may involve a merger, tender offer or reverse split of the company’s shares.

Public company compliance costs can range from

A “going private” transaction generally involves the cash-out of all or a substantial portion of a company’s public shares so that the company becomes eligible to delist and deregister its shares under the Exchange Act.“Going private” transactions can take many forms and may involve a merger, tender offer or reverse split of the company’s shares.Public company compliance costs can range from $1.0 million to over $3.0 million annually even for such a relatively small company.The more troubled the issuer, the more burdensome public company status can become as a company spends a greater proportion of its diminishing resources dealing with difficult disclosure and accounting questions.For smaller companies, public company compliance costs have increased significantly as a percentage of revenues.In early 2009, more than 200 NASDAQ listed companies and 50 NYSE listed companies were facing delisting for non-compliance with applicable continuing listing requirements.“Going private” transactions require extensive and detailed disclosure filings under Rule 13e-3, the “going private” rule.“Going private” transactions are often undertaken by or at the direction of controlling shareholders or third party acquirors and require extensive board consideration, disclosure, fairness opinions, SEC filings and often a shareholder vote.

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A “going private” transaction generally involves the cash-out of all or a substantial portion of a company’s public shares so that the company becomes eligible to delist and deregister its shares under the Exchange Act.

“Going private” transactions can take many forms and may involve a merger, tender offer or reverse split of the company’s shares.

Public company compliance costs can range from $1.0 million to over $3.0 million annually even for such a relatively small company.

The more troubled the issuer, the more burdensome public company status can become as a company spends a greater proportion of its diminishing resources dealing with difficult disclosure and accounting questions.

.0 million to over .0 million annually even for such a relatively small company.

The more troubled the issuer, the more burdensome public company status can become as a company spends a greater proportion of its diminishing resources dealing with difficult disclosure and accounting questions.

The 90‑day period after filing of Form 15 passes making effective the deregistration of the company’s stock under Exchange Act Section 12(g) and the suspension of reporting obligations under Section 15(d), if applicable.This is because, in counting record holders, in general, the issuer need only count the number of registered holders on its shareholder list and if depositaries are listed, the number of holders for whom the depositary holds securities. Foreign private issuers can also delist and deregister under Exchange Act Rule 12h-6 but that Rule requires the company to have and maintain a foreign listing which is its primary trading market. Deregistration under Section 12(g) and Suspension of Reporting Obligations under Section 15(d) Once delisted, a company may nonetheless be required to continue reporting pursuant to Section 12(g) of the Exchange Act if it has more than 500 holders of record and total assets exceeding million, or pursuant to Section 15(d) of the Exchange Act if it at any time had an effective Registration Statement under the Securities Act of 1933. In either case, the company will need to file a Form 15 certifying that the number of shareholders of record of the class of securities to be deregistered is less than 300 persons to deregister under Section 12(g) and, if applicable, suspend its reporting obligations under Section 15(d).After “going dark,” an issuer’s reporting obligations can be reinstated if the issuer exceeds the limit on the number of record holders on the first day of any fiscal year after it files a Form 15.For example, brokers and other institutions holding shares in street name can elect to cease holding the shares in that capacity, and cause the transfer agent to record the shares directly in the name of the persons for whom they hold the securities.In such a case, each beneficial owner will become a record holder, and the stockholder count may exceed the limits.

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