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The Corporate Counsel, Vol. IV, No. 6
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| Resales of Shares Issued in Mergers and Acquisitions (CC Nov-Dec 79)
The SEC recently confirmed that affiliates of companies acquired in non-Rule 145 mergers and acquisitions exempt under Section 3(a)(9), 3(a)(11) or Reg A, are nevertheless expected to comply with the resale requirements of Rule 145(d) in order to avoid "underwriter" taint and Commission enforcement action. (See Interpretation No. (87) in Release No. 33-6099, the Rule 144 Interpretative Release (August 2, 1979 CCH ¶ 2787.) (It should also be understood that as discussed in past issues, the holding period requirements survive the merger in §3(a)(10) and Rule 147 transactions but tacking of holding periods is permitted.) The interpretive response however, did not expressly cover shares issued pursuant to (non-S-14) registered exchange offers or evergreen shelf registrations. Now, in a recent interpretative letter, the Staff has made it clear that (a) non-affiliates acquiring shares in such registered transactions may resell those shares without restriction and (b)former affiliates may resell such shares in accordance with Rule 145(d)-type requirements without any prospectus delivery requirements (and without having to supplement or amend prospectuses). (See E. H. Crump Companies, avail. October 18 1979, not reported to date in CCH.) [We should note that presumably the two-year cut-off under Rule 145(d) would apply by analogy in all such situations. See Dean Witter Reynolds Organization, Inc., avail. April 21, 1979, not reported to date in CCH, covering shares issued in a 3(a)(10) transaction.] ©1998 Executive Press, Inc. |
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