Facebook Fairness Hearing Back In The News
Last August, the Department of Corporations approved the acquisition of Instagram, Inc. by Facebook, Inc. following a fairness hearing. See DOC Calls It Fair. According to this Los Angeles Times story by Salvador Rodriguez, Facebook officially closed the acquisition a few days later. Although I would have expected that to have been the end of the matter, the Facebook fairness hearing leaped into Read more...
DOC Calls It Fair
Notes on the Facebook fairness hearing At the conclusion of a hearing held yesterday morning, the Department of Corporations approved the acquisition of Instagram, Inc. by Facebook, Inc. Technically, the Department approved the issuance of a permit to offer and sell the securities. The hearing was was held pursuant to Corporations Code Section 25142. See A Program Guide To The Facebook Read more...
A Program Guide To The Facebook Fairness Hearing
As discussed in this earlier post, Facebook, Inc. has requested a fairness hearing before the California Department of Corporations. Technically, the hearing is being held pursuant to Corporations Code Section 25142 in connection with Facebook’s application for a permit authorizing the issuance of securities to effect its proposed acquisition of Instagram, Inc. Since a permit may be issued without a hearing, Read more...
Facebook “Likes” California’s Fairness Hearing Process!
In this video from January 2011, I spoke about California’s fairness hearing procedure. California is one of only a handful of states that offer the opportunity to take advantage of the Section 3(a)(10) exemption from registration under the Securities Act of 1933. This exemption is most typically used by public issuers who wish to acquire a closely held companies in exchange Read more...
DOC Finds A Reorganization Can Include A Rehabilitation
Until last year, Ambac Assurance, a Wisconsin domiciled insurer, was one of the largest monoline insurers in the world. Originally it insured low-risk, public finance bonds. However, in the 1990s it started to offer financial guarantee insurance on residential mortgage backed securities and collateralized debt obligations of asset-backed securities. Not surprisingly, Ambac was a casualty of the 2008 financial crisis. In response, Read more...
California’s 50/90 Rule – When Being In Control May Mean That You’re Not
Many out-of-state practitioners are surprised to learn that California has special statutory provisions governing a merger when a constituent corporation (Section 161) or its parent (Section 175) owns, directly or indirectly, more than 50% of the voting power (Section 194.5) of the other constituent corporation prior to the merger. This is the so-called “50/90 Rule”. It can be found in the last sentence of Section 1101. Under Read more...
Fairness Hearings – Shell Companies Need Not Apply
In recent weeks, a number of stories have appeared in the press regarding “reverse mergers” involving shell corporations and Chinese companies. For example, Joshua Gallu wrote this story for Bloomberg last December. After the Securities and Exchange Commission adopted rule amendments in 2005 governing the use of Forms S-8, 8-K and 20-F by shell companies, the California Commissioner of Corporations Read more...
Video: Fairness Hearings: A Faster, Cheaper Alternative To Federal Registration
Watch the video A California fairness hearing can be a faster, cheaper alternative to federal registration under the Securities Act of 1933. Although fairness hearings can be used in a variety of situations, they are most often used by publicly traded companies using their own securities to acquire another company. According to the Department of Corporations, the approximate market value of the securities Read more...
Want A Fairness Hearing But Paying In Cash – No Problem?
In yesterday’s post, I mentioned California Corporations Code Section 1001(d). That statute imposes a super-majority shareholder approval requirement for sale of assets transactions covered by Section 1001(a) when the acquiring entity is in “control” of or under common control with the corporation disposing of the assets. The vote required is 90% of the voting power of the disposing corporation. “Control” means the ownership directly or Read more...
